UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-K



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



For the fiscal year ended March 31, 2023



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



For the transition period from___________ to___________



Commission file number 000-27251



QDM International
Inc.

(Exact name of registrant as specified in its charter)





|Florida                                                                               |  | 59-3564984         
|------------------------------------------------------------------------------------- |  | -------------------
|(State or other jurisdiction of                                                       |  | (I.R.S. Employer   
|incorporation or organization)                                                        |  | Identification No.)
|                                                                                      |  |                    
|Room 1030B, 10/F, Ocean Centre, Harbour City,
5 Canton Road, Tsim Sha Tsui, Hong Kong |  | -                  
|(Address of principal executive offices)                                              |  | (Zip Code)         
|                                                                                      |  |                    
|+ 852 34886893                                                                       
|(Registrant’s telephone number, including area code)                                 



Securities registered pursuant to Section 12(b)
of the Act: None



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



Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒



Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☒



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. Yes ☒ No ☐



Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files)
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.



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



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



Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐



If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐



Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐



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



The aggregate market value of the voting and non-voting
common stock held by non-affiliates computed by reference to the price at which the common stock was last sold on the OTCQB Marketplace
operated by the OTC Markets as of September 30, 2022  ($0.81) was approximately $ 41,038.65.



As of June 29, 2023, 29,156,393 shares of common
stock, $0.0001 par value per share, of the registrant were issued and outstanding.



|Auditor Name: |  | Auditor Location: |  | Auditor Firm ID:
|------------- |  | ----------------- |  | ----------------
|ZH CPA, LLC   |  | Denver, Colorado  |  | 6413            




















TABLE OF CONTENTS



|PART I   |                                                                                                              |    
|-------- | ------------------------------------------------------------------------------------------------------------ | ---
|         |                                                                                                              |    
|Item 1.  | Business                                                                                                     | 1  
|Item 1A. | Risk Factors                                                                                                 | 23 
|Item 1B. | Unresolved Staff Comments                                                                                    | 41 
|Item 2.  | Properties                                                                                                   | 41 
|Item 3.  | Legal Proceedings                                                                                            | 41 
|Item 4.  | Mine Safety Disclosures                                                                                      | 41 
|         |                                                                                                              |    
|PART II  |                                                                                                              |    
|         |                                                                                                              |    
|Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 42 
|Item 6.  | [Reserved]                                                                                                   | 44 
|Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 44 
|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                                   | 48 
|Item 8.  | Financial Statements and Supplemental Data                                                                   | F-1
|Item 9.  | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure                         | 49 
|Item 9A. | Controls and Procedures                                                                                      | 49 
|Item 9B. | Other Information                                                                                            | 49 
|Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections                                          | 49 
|         |                                                                                                              |    
|PART III |                                                                                                              |    
|         |                                                                                                              |    
|Item 10. | Directors, Executive Officers and Corporate Governance                                                       | 50 
|Item 11. | Executive Compensation                                                                                       | 52 
|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 53 
|Item 13. | Certain Relationships and Related Transactions, and Director Independence                                    | 54 
|Item 14. | Principal Accountant Fees and Services                                                                       | 55 
|         |                                                                                                              |    
|PART IV  |                                                                                                              |    
|         |                                                                                                              |    
|Item 15. | Exhibits, Financial Statement Schedules                                                                      | 56 
|Item 16. | Form 10-K Summary                                                                                            | 56 



i







CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS



This Annual Report on Form 10-K (the “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, as
amended (the “Securities Act”) 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 impact of public health
epidemics, including the COVID-19 pandemic in Mainland 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
and political conditions in Hong Kong and Mainland 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 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
| | - | ------------------------------------------------------------------------------------





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



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.





ii







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 of 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.



Unless otherwise indicated or the context otherwise
requires, references in this Report to:



| | ● | “24/7 Kid” are to 24/7 Kid Doc, Inc., a Florida corporation and wholly-owned subsidiary of the Company;
| | - | -------------------------------------------------------------------------------------------------------



| | ● | “BVI” are to the British Virgin Islands;
| | - | ----------------------------------------



| | ● | “Common stock” are to the common stock of the Company, par value $0.0001 per share;
| | - | -----------------------------------------------------------------------------------



| | ● | “EUR,” “€” and “Euro” are to the legal currency of those member states of the European Union that have adopted the single currency;
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| | ● | “HKD,” “HK$” and “Hong Kong dollars” are to the legal currency of Hong Kong;
| | - | ----------------------------------------------------------------------------



| | ● | “QDM BVI” are to QDM Holdings Limited, a BVI company and a wholly-owned subsidiary of the Company;
| | - | --------------------------------------------------------------------------------------------------



| | ● | “QDM HK” are to QDM Group Limited, a Hong Kong corporation and a wholly-owned subsidiary of the QDM BVI;
| | - | --------------------------------------------------------------------------------------------------------



| | ● | “QDM” and the “Company” refer to QDM International Inc., a Florida corporation; and
| | - | -----------------------------------------------------------------------------------



| | ● | “Series C Preferred Stock” are to the Series C Convertible Preferred Stock, par value $0.0001 per share, each convertible into eleven shares of common stock initially;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the “Group” are to QDM BVI, QDM HK and YeeTah, collectively;
| | - | ------------------------------------------------------------



| | ● | “Technical representatives” are to licensed individuals who provide advice to an insurance policy holder or potential policy holder on insurance matters on behalf of an insurance agent or broker, or arrange contracts of insurance in or from Hong Kong on behalf of that insurance agent or broker;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | “US$,” “U.S. dollars,” “$,” and “USD” are to the legal currency of the United States;
| | - | -------------------------------------------------------------------------------------



| | ● | “We,” “us,” and “our” refer to QDM International Inc. and/or its consolidated subsidiaries, unless the context suggests otherwise; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | ● | “YeeTah” are to Hong Kong YeeTah Insurance Broker Limited,
formerly known as YeeTah Insurance Consultant Limited, a Hong Kong corporation and wholly-owned subsidiary of QDM HK.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company, 24/7 Kid, and QDM BVI maintain their
books and records in U.S. dollars and in accordance with generally accepted accounting principles of the United States. QDM HK and YeeTah
maintain their books and records either in U.S. dollars or Hong Kong dollars. This Report also contains translations of Hong Kong dollars
into U.S. dollars for the convenience of the reader. The Hong Kong dollar is freely convertible into other currencies (including the U.S.
dollar). Since 1983, the Hong Kong dollar has effectively been officially linked to the U.S. dollar at the rate of approximately HK$7.80
= US$1.00. However, the market exchange rate of the Hong Kong dollar against the U.S. dollar continues to be influenced by the forces
of supply and demand in the foreign exchange market.



Unless otherwise stated, all translations of Hong Kong dollars into
U.S. dollars were made at HK$7.80 = US$1.00, which is the prevailing exchange rate as of March 31, 2023. We make no representation
that the Hong Kong dollar or U.S. dollar amounts referred to in this Report could have been or could be converted into U.S. dollars or
Hong Kong dollars, as the case may be, at any particular rate or at all.





iii







PART I



Item 1. Business.



Overview



QDM is a holding company incorporated in Florida
with no material operations, and we conduct our insurance brokerage business through our indirectly wholly-owned subsidiary, YeeTah, primarily
in Hong Kong.



YeeTah sells a wide range of insurance products
consisting of two major categories: (1) life and medical insurance, such as individual life insurance; and (2) general insurance, such
as automobile insurance, commercial property insurance, liability insurance and homeowner insurance. In addition, as a Mandatory Provident
Fund (“MPF”) intermediary, YeeTah also provides its customers with assistance on account opening and related services under
the MPF and the Occupational Retirement Schemes Ordinance schemes (“ORSO”) in Hong Kong, both of which are mandatory retirement
protection schemes set up for employees who are Hong Kong residents.



YeeTah sells insurance
products underwritten by insurance companies operating in Hong Kong to individual customers who are either Hong Kong residents or visitors
from Mainland China and are compensated for its services by commissions paid by insurance companies, typically based on a percentage of
the premium paid by the insured. Commissions generally depend on the type, term of insurance products and the particular insurance company
and they are usually paid by the insurance companies the next month after the cooling off period of the policies sold, which is generally
21 days after the earlier of the delivery of the policy or a cooling off notice to the policy holder.



As of the date of this
Report, YeeTah has been a party to agreements with 19 insurance companies in Hong Kong, and offers approximately 431 insurance products to
our customers. For the fiscal year ended March 31, 2023, an aggregate of 98.92% of YeeTah’s total commissions was attributable to
its top two insurance companies, each accounted for more than 10% of its total commissions. For the fiscal year ended March 31, 2022,
an aggregate of 81.45 % of YeeTah’s total commissions was attributable to its top two insurance companies, each accounted for
more than 10% of our total commissions.



As of March 31, 2023,
YeeTah had serviced an aggregate of 679 customers in connection with the purchase of an aggregate of 735 insurance products as well as
a total of 44 customers for MPF related services.



As an independent insurance
agency, YeeTah offers not only a broad range of insurance products underwritten by multiple insurance companies to address the needs of
increasingly sophisticated customers with diverse needs and preferences but also quality services covering the policy application, customer
information collection, analysis of policy selection, and after-sale services.



We focus on offering
long-term life insurance products including endowment life and annuity life insurance and distribute general insurance products including
automobile insurance, individual accident insurance, homeowner insurance, liability insurance and travel insurance. All of YeeTah’s
sales of life and medical insurance products and general insurance products are conducted through its licensed sales persons (known in
Hong Kong as technical representatives).



Hong Kong’s independent
insurance intermediary market is experiencing rapid growth due to increasing demands for insurance products by the Chinese population,
especially visitors from mainland China. We intend to grow our business by offering premium services and recruiting talent to join our
professional team and sales force, expanding our distribution network through building more connections with business partners in Hong
Kong and mainland China, such as wealth management companies, funds, trust companies, and overseas immigration agencies.



Public Offering



In March, 2023, the Company consummated a closing
of a public offering of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued and
sold an aggregate of 28,910,400 shares of its common stock at a price of $0.081 per share to certain investors, generating gross proceeds
to the Company of $2,339,937. The material terms of the 2023 Offering are described in the prospectus, dated January 27, 2023, filed by
the Company with the SEC on February 01, 2023, pursuant to Rule 424(b) under the Securities Act. The Offering is registered pursuant to
the Company’s Registration Statement on Form S-1 (Registration No. 333-267263), originally filed with the SEC on September 2, 2022
(as amended, the “Registration Statement”), which was declared effective by the SEC on January 27, 2023.





1







Holding Company Structure



QDM is not an operating company but a Florida
holding company with operations primarily conducted through its indirectly wholly-owned subsidiary based in Hong Kong. Our investors hold
shares of common stock in QDM, the Florida holding company.



We do not have or intend to set up any subsidiary
or enter into any contractual arrangements to establish a variable interest entity (“VIE”) structure with any entity in China.
24/7 Kid, Lutter Global Limited (“LGL”), and QDM Software Group Limited (“QDMS”) currently have no operations.
Our corporate organizational structure is as follows as of the date of this Report:







Our holding company structure presents unique
risks as our investors may never directly hold equity interests in our Hong Kong operating subsidiary and will be dependent upon dividends
and other distributions from our subsidiaries to finance our cash flow needs. Our ability to receive dividends and other contributions
from our subsidiaries are significantly affected by regulations promulgated by Hong Kong and PRC authorities. Any change in the interpretation
of existing rules and regulations or the promulgation of new rules and regulations may materially affect our operations and or the value
of our securities, including causing the value of our securities to significantly decline or become worthless. For a detailed description
of the risks facing the Company associated with our structure, please refer to “Item 1A. Risk Factors – Risks Related to
Doing Business in Hong Kong.”



Currently, PRC laws and regulations do not prohibit
direct foreign investment in our Hong Kong operating subsidiary. Nonetheless, in light of the recent statements and regulatory actions
by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign
ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we may be subject
to the risks of the uncertainty of any future actions of the PRC government in this regard, which would likely result in a material change
in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign
investments, and offer or continue to offer securities to our investors, and the resulting adverse change in value to our common stock.
We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the China Securities Regulatory Commission,
or CSRC, if we fail to comply with such rules and regulations, which would likely adversely affect the ability of the Company’s
securities to continue to trade on the OTCQB, which would likely cause the value of our securities to significantly decline or become
worthless.



The Holding Foreign Companies Accountable Act (the “HFCAA”)



As more stringent criteria applying to emerging market companies upon
assessing the qualification of their auditors have been imposed by the United States Securities and Exchange Commission (the “SEC”)
and the Public Company Accounting Oversight Board (the “PCAOB”) recently, and under the HFCAA, our securities may be prohibited
from being traded on the over-the-counter (the “OTC”) markets if our auditor is not inspected by the PCAOB for three consecutive
years, and this ultimately could result in trading in our securities being prohibited.





2









The Holding Foreign Companies Accountable Act,
or the HFCAA, was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by
a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in
2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market
in the United States.



On March 24, 2021, the SEC adopted interim
final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. A company will be required
to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established
by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition
requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act (the “AHFCAA”), which was signed into law on December 29, 2022, amending the HFCAA and requiring the
SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections
for two consecutive years instead of three consecutive years. On September 22, 2021, the PCAOB adopted a final rule implementing
the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable
to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken
by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the
submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual
report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is
unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16,
2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public
accounting firms headquartered in: (i) China, and (ii) Hong Kong.



On August 26, 2022, the PCAOB announced and
signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance
of the People’s Republic of China. The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements
and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors
and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed;
(3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.



On December 15, 2022, the PCAOB issued a
new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB
has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report
cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect
or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely
because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.



As of the date of this Report,
our auditor, ZH CPA, LLC is not subject to the determinations as to inability to inspect or investigate completely as announced by the
PCAOB on December 16, 2021 as they are not on the list published by the PCAOB. As a firm registered with the PCAOB, ZH CPA, LLC is headquartered
in Denver, Colorado, and is subject to laws in the United States which provide that the PCAOB shall conduct regular inspections to assess
the auditor’s compliance with the applicable professional standards. We have no intention of dismissing ZH CPA, LLC in the future
or engaging any auditor not based in the U.S. and not subject to regular inspection by the PCAOB. There is no guarantee, however, that
any future auditor engaged by the Company would remain subject to full PCAOB inspection during the entire term of our engagement. If it
is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investor may be deprived of the benefits
of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections
of audit work undertaken in China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’ audits and their
quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.See “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong — Under the HFCAA, our securities
may be prohibited from being traded on any U.S. securities exchange, including the New York Stock Exchange and Nasdaq, or through any
other trading method within the SEC’s regulatory jurisdiction, including the OTC markets if our auditor is not inspected by the
PCAOB for three consecutive years, and this ultimately could result in trading in our securities being prohibited. Furthermore, on June
22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA
and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor
is not subject to PCAOB inspections for two consecutive years instead of three” on page 34.



3







Transfers of Cash to and from Our Subsidiaries



QDM is a holding company incorporated in Florida
with no material operations of its own, and we conduct our insurance brokerage business through our indirectly wholly-owned subsidiary,
YeeTah, primarily in Hong Kong. We may rely on dividends and other distributions on equity to be paid by our Hong Kong subsidiary to fund
our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our stockholders,
to service any debt we may incur and to pay our operating expenses. Currently, substantially all of our operations are in Hong Kong. We
do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure with any entity
in 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 of the Hong Kong Special Administrative Region of the People’s Republic of China (the “Basic Law”),
providing 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.” The laws and regulations of the PRC do not currently have
any material impact on transfer of cash from us to YeeTah or from YeeTah to us and the investors in the U.S. In addition, there are no
restrictions or limitations under the laws of Hong Kong imposed on the conversion of Hong Kong dollar into foreign currencies and the
remittance of currencies out of Hong Kong or across borders and to U.S investors.



We are permitted under the Florida law to provide
funding to our subsidiaries, including YeeTah, through loans or capital contributions without restrictions on the amount of the funds.
There are no restrictions or limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the
U.S. investors. YeeTah is permitted under the laws of Hong Kong to provide funding to QDM HK and QDM BVI, the holding company incorporated
in Hong Kong and the British Virgin Islands, respectively, through dividend or other distribution without restrictions on the amount of
the funds. As of the date of this Report, there has been no dividends or distributions between our holding company and our subsidiaries
nor do we expect such dividends or distributions to occur in the foreseeable future among our holding company and its subsidiaries.



YeeTah currently intends to retain all available
funds and future earnings, if any, for the operation and expansion of its business and does not anticipate declaring or paying any dividends
in the foreseeable future. There are no significant restrictions and limitations on our ability
to distribute earnings from our businesses, including our subsidiaries, to the parent company and U.S. investors or our ability to settle
amounts owed. There are no significant restrictions on foreign exchange or our ability to transfer cash between entities within our group,
across borders, or to U.S. investors. However, the PRC government has significant authority to intervene or influence the China operations
of an offshore holding company at any time, and such oversight may also extend to our Hong Kong operating company. We cannot assure you
that the PRC government will not prevent us from transferring the cash we maintain in Hong Kong outside of Hong Kong, or restrict our
ability to deploy our cash into business or to pay dividends. We could also be subject to limitations on the transfer or the use of our
cash if we expand our business operations into China or conduct our operations in some other ways such that we become subject to PRC laws
that regulate these activities.In addition, if YeeTah incurs debt on its own behalf in the future, the instruments governing the
debt may restrict its ability to pay dividends or make other distributions to us. Any limitation
on our ability to transfer or use our cash could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.



We have never paid or declared any cash dividends
on our common stock and do not anticipate paying cash dividends in the foreseeable future. The declaration of dividends on any class of
shares is within the discretion of our board of directors, subject to the Florida law, out of legally available funds, and will depend
on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. If we determine to
pay dividends on any of our capital stock in the future, we will be dependent on receipt of funds from our Hong Kong subsidiary, YeeTah.
None of our subsidiaries has made any dividends or distributions to us. Under the current practice of the Inland Revenue Department of
Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. See “Item 1A. Risk Factors – Risks Related
to Our Business and Industry – We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash
and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material
adverse effect on our ability to conduct our business” on page 30 and “Item 1A. Risk Factors – Risks Related
to Doing Business in Hong Kong - Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments
to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.
Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject
to tax by the PRC” on page 32.



Regulatory Permissions and Developments



Our counsel as to PRC law has advised us that
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 a significant change to current political arrangements between mainland China and Hong Kong, companies operating in
Hong Kong such as us may face similar regulatory risks as those operated in PRC, including their ability to offer securities to investors,
list their securities on a U.S. or other foreign exchange, conduct their 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.”





4







We are aware that 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 June 10, 2021, the Standing Committee
of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data
collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing
activities must be conducted based on data classification and hierarchical protection system for data security.



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 certain activities
in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over
Chinese-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities
laws.



On August 20, 2021, the 30th meeting of the Standing
Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s
Republic of China,” or “PRC Personal Information Protection Law,” which became effective on November 1, 2021. The PRC
Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China
that is carried out outside of China where (i) such processing is for the purpose of providing products or services for natural persons
within China, (ii) such processing is to analyze or evaluate the behavior of natural persons within China, or (iii) there are any other
circumstances stipulated by related laws and administrative regulations.



On December 24, 2021, the CSRC, together with
other relevant government authorities in China issued the Provisions of the State Council on the Administration of Overseas Securities
Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the Filing of Overseas Securities Offering and Listing
by Domestic Companies (Draft for Comments) (“Draft Overseas Listing Regulations”). The Draft Overseas Listing Regulations
require that a PRC domestic enterprise seeking to issue and list its shares overseas (“Overseas Issuance and Listing”) shall
complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance and Listing includes direct and indirect
issuance and listing. Where an enterprise whose principal business activities are conducted in PRC seeks to issue and list its shares
in the name of an overseas enterprise (“Overseas Issuer”) on the basis of the equity, assets, income or other similar rights
and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect overseas issuance and listing (“Indirect
Overseas Issuance and Listing”) under the Draft Overseas Listing Regulations.



On December 28, 2021, the Cyberspace Administration
of China (the “CAC”) jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which
took effect on February 15, 2022, replacing the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for
Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services,
and online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying
out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform
operator who controls more than one million users’ personal information must undergo a cybersecurity.



On February 17, 2023, with the approval of the
State Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, (i) domestic
companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC
pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or
listing applications. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies
any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify,
warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons
may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria,
the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic
company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its
audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies; and (B) the majority
of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland
China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their
usual place(s) of residence located in mainland China. In such circumstances, where a PRC domestic company is seeking an indirect overseas
offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures
with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall
submit filings with the CSRC within three business days after such application is submitted.





5







On February 24, 2023, the CSRC, together with
the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions issued
by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised
Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas
Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as
is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to,
either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including
securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or
working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy
administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas
listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers,
and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest,
shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this Report, the revised Provisions
have come into effect. Any failure or perceived failure by our Company or our subsidiaries to comply with the above confidentiality and
archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities
being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected
of committing a crime.



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 anti-monopoly have not been listed in Annex III and do not apply directly to Hong Kong and, as such,
we are advised by our counsel as to PRC law that that the CAC and CSRC do not currently have jurisdiction over companies operating in
Hong Kong.



Our counsel as to PRC law has advised us that
that we are not currently required to obtain any permission or approval from the CSRC, the CAC or any other regulatory authority in the
PRC for our operations, the trading of our securities on the OTCQB and the offering of our securities to foreign investors.  The
business of our subsidiary is not subject to cybersecurity review with the CAC, given that PRC laws on data protection and cybersecurity
do not currently apply to Hong Kong. To the extent that if we become subject to such PRC laws in the future, we do not believe we are
required to conduct a cybersecurity review because (i) we do not possess a large amount of personal information in our business operations;
and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important
data by the authorities. In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency as
such PRC enforcement agency does not currently have jurisdiction over our Hong Kong operating subsidiary. However, our operations could
be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, if we
inadvertently conclude that such approvals are not required when they are, or applicable laws, regulations, or interpretations change
and we are required to obtain approval in the future. We may be subject to penalties and sanctions imposed by the PRC regulatory agencies,
including the CSRC, if we fail to comply with such rules and regulations, which could adversely affect the ability of the Company’s
securities to continue to trade on the OTCQB, which may cause the value of our securities to significantly decline or become worthless.



In addition, in light of the recent statements
and regulatory actions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations
prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns,
we may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that the PRC
government could disallow our holding company structure, which may result in a material change in our operations, including our ability
to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to
offer securities to our investors. These adverse actions could cause the value of our securities to significantly decline or become worthless.



There may be prominent risks associated with our
operations being in Hong Kong. For example, as a U.S.-listed public company operating primarily in Hong Kong, we may face heightened scrutiny,
criticism and negative publicity, which could result in a material change in our operations and the value of our common stock. Additionally,
we are subject to certain legal and operational risks associated with our business operations in Hong Kong, which is subject to political
and economic influence from China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain,
and we may face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be
able to conduct in Hong Kong and the profitability of such business. Therefore, these risks associated with being based in or having the
majority of our operations in Hong Kong could likely cause the value of our securities to significantly decline or be worthless. Furthermore,
these risks would likely result in a material change in our business operations or a complete hinderance of our ability to offer or continue
to offer our securities to investors. Furthermore, changes in Chinese internal regulatory mandates, such as the Regulations on Mergers
and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), the Anti-Monopoly Law, the Cybersecurity
Law and the Data Security Law, may target the Company’s corporate structure and impact our ability to conduct business in Hong Kong, accept
foreign investments, or list on an U.S. or other foreign exchange.



The U.S. government,
including the SEC, has recently made statements and taken certain actions that may lead to significant changes to U.S. and international
relations, and will impact companies with connections to the United States or China (including Hong Kong). The SEC has issued statements
primarily focused on companies with significant China-based operations. For example, on July 30, 2021, Gary Gensler, Chairman of the SEC,
issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has
asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations.



For a detailed description of the risks facing
the Company and the risks associated with having our operations in Hong Kong, please refer to “Item 1A. Risk Factors –
Risks Related to Doing Business in Hong Kong.”





6







Corporate History



QDM was incorporated in Florida in March 2020
as the successor to 24/7 Kid, which was incorporated in Florida in November 1998. 24/7 Kid was a telemedicine company that provided Connect-a-Doc
telemedicine kits to schools and its services aimed at providing an alternative 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.



On March 3, 2020, a stock purchase agreement (the “Purchase
Agreement”) was entered into by and between Huihe Zheng, our Chief Executive Officer and Chairman and Tim Shannon, our then controlling
stockholder as well as Chief Executive Officer, Chief Financial Officer, President and director. Pursuant to the Purchase Agreement,
Mr. Shannon sold to Mr. Zheng (i) 710,000 shares of common stock of 24/7 Kid, representing 42.6% of the total issued and outstanding
shares of common stock of 24/7 Kid as of March 9, 2020 and (ii) 13,500 shares of Series B Preferred Stock, each entitling the holder
to 100 votes on all corporate matters submitted for stockholder approval, in consideration of $500,000 in cash from Mr. Zheng’s
personal funds. The shares of common stock and Series B Preferred Stock acquired by Mr. Zheng, in the aggregate, represented 68.3% of
the outstanding voting securities of 24/7 Kid as of March 9, 2020, and the acquisition of such shares resulted in a change in control
of 24/7 Kid.



On March 11, 2020, we were incorporated in Florida
as a wholly owned subsidiary of 24/7 Kid and QDM Merger Sub, Inc. (“Merger Sub”) was incorporated in Florida as our wholly
owned subsidiary, for the purposes of effectuating a name change by implementing a reorganization of the corporate structure of 24/7 Kid
through a merger (the “Merger”). On March 13, 2020, an Agreement and Plan of Merger (the “Merger Agreement”) was
entered into by and among 24/7 Kid, the Company, and the Merger Sub. On April 8, 2020, the Articles of Merger were filed with the State
of Florida to effect the Merger as stipulated by the Merger Agreement.



Pursuant to the Merger Agreement, Merger Sub merged
with and into 24/7 Kid, with 24/7 Kid being the surviving entity. As a result, the separate corporate existence of Merger Sub ceased and
24/7 Kid became a direct, wholly-owned subsidiary of the Company. Pursuant to the Merger Agreement and as a result of the Merger, all
issued and outstanding shares of common stock and Series B Preferred Stock of 24/7 Kid were converted into shares of the Company’s
common stock and Series B Preferred Stock, respectively, on a one-for-one basis, with the Company securities having the same designations,
rights, powers and preferences and the qualifications, limitations and restrictions as the corresponding share of the securities of 24/7
Kid being converted. As a result, upon consummation of the Merger, all of the stockholders of 24/7 Kid immediately prior to the Merger
became stockholders of the Company and all the directors and officers of 24/7 Kid became the directors and officers of the Company. Upon
consummation of the Merger, we became the successor issuer to 24/7 Kid pursuant to 12g-3(a) and as a result shares of our common stock
were deemed to be registered under Section 12(g) of the Exchange Act.



On October 21, 2020, we entered into a share exchange
agreement (the “Share Exchange Agreement”) with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI (the “QDM
BVI Shareholder”), 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 the QDM BVI Shareholder 900,000 shares of a newly
designated Series C Preferred Stock, with each share of Series C Preferred Stock initially being convertible into 11 shares of our common
stock, subject to certain adjustments and limitations (the transaction, the “Share Exchange”). The Share Exchange closed on
October 21, 2020. As a result of the consummation of the Share Exchange, we acquired QDM BVI, QDM HK and YeeTah, which is an insurance
brokerage company primarily engaged in the sales and distribution of insurance products in Hong Kong. Since the consummation of the Share
Exchange, we have assumed the business operations of the Group as our own.



As described above, on October 21, 2020, we acquired
all the issued and outstanding capital stock of QDM BVI pursuant to the Share Exchange Agreement and QDM BVI became our wholly owned subsidiary.
The acquisition was accounted for as a recapitalization effected by a share exchange, wherein QDM BVI is considered the acquirer for accounting
and financial reporting purposes. The assets and liabilities of QDM BVI have been brought forward at their book value and no goodwill
has been recognized.



Consequently, the assets and liabilities and the
historical operations that will be reflected in the financial statements prior to the Share Exchange will be those of the Group and will
be recorded at the historical cost basis of the Group, and the consolidated financial statements after completion of the Share Exchange
will include the assets and liabilities of the Group, historical operations of the Group, and operations of the Company and its subsidiaries
from the closing date of the Share Exchange.





7







As a result of the acquisition of all the issued
and outstanding capital stock of QDM BVI, we assumed the business operations of the Group as our own.



On November 3, 2021, we acquired 100% of the issued
and outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. We acquired QDMS through an intermediary holding
company, LGL , which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole shareholder of QDMS.
As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000 in November 2021 and at the same
time the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to us for a consideration of USD$1.00. As a result, we
acquired a 100% ownership of LGL, which, in turn, owns 100% of QDMS. Although QDMS has no operation as of the date of this Report, QDMS
plans to engage in the research and development of CRM SaaS, with a business model derived from “customer-centered” CRM concept
to improve enterprise-customers relationship. We plan to market QDMS’ SaaS services to our network of banks, securities companies,
insurance companies and other financial services providers in Hong Kong and China.



Our
current principal offices are located at Room 1030B, 10/F, Ocean Centre, Harbour City,5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong.
Our phone number is +852 34886893



QDM is organized under the laws of the State of
Florida as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions
such as Hong Kong and the BVI. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S.
Courts against these entities, or to effect service of process on the officers and directors managing the foreign subsidiaries.





Competitive Advantages



We believe that the following competitive strengths
contribute to our growth and differentiate us from our competitors:



| | ● | Premium Customer Service Experience.We believe providing superior customer service to our existing and potential customers is the most important aspect of our business in terms of brand building and product differentiation. We have designed our services to provide personalized customer service throughout the whole insurance purchase process, including in-depth customer needs analysis, product and plan customization, product evaluation and selection, and claim settlement related assistance.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Concentrated Insurance Product Offerings.Hong
    Kong’s independent insurance intermediary companies generally focus on both life insurance and property insurance, but our
    strategy has been to focus on life insurance because of generally higher commissions. As of March 31, 2023, YeeTah had distributed
    an aggregate of 735 life and medical insurance policies from 19 insurance companies in Hong Kong. We believe our ability to
    offer concentrated products and services makes us an attractive distributor for our insurance company partners, and enables us to
    provide quality service to our customers.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Good Relationships with Insurance Companies.We maintain good relationships with the leading insurance companies in Hong Kong, including but not limited to, Prudential and AIA International Limited which have very stringent requirements on selection of brokers. YeeTah has been working with them for a few years and is able to pass their annual evaluations and receive favorable commission rates.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Experienced Management Team in the Insurance Industry.YeeTah’s responsible officer has more than ten years of experience serving as a senior executive in the insurance industry and is familiar with the insurance intermediary industry and the regulatory environment in Hong Kong. In addition, YeeTah’s administrative manager has more than 20 years of experience in the insurance industry and ten years of management experience.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Strong Commitment to Rigorous Training and Development.Given the rapid development of new insurance products and the heavy reliance on face-to-face sales efforts in Hong Kong’s insurance industry, we believe that YeeTah’s strong in-house training program, which covers both product knowledge and sales skills, gives it a competitive edge over the other professional insurance intermediaries and helps YeeTah retain its sales force and improve our sales. The training also emphasizes inculcating in YeeTah’s technical representatives our corporate culture of customer service and commitment to high ethical standards.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





8







Growth Strategy



Our goal is to further expand our distribution
network. To achieve this goal, we intend to capitalize on the growth potential of mainland China and Hong Kong’s insurance industry
and the insurance intermediary sector, leverage our competitive strengths and pursue the following strategy:



| | ● | Pursue Acquisitions of Other Insurance Intermediaries. We intend to acquire suitable insurance intermediaries in mainland China in order to achieve the objective of growth and provide an area of expansion that will add to insurance product/service lines in a market that is currently not served by us.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Further Participation in the Growing Life-Insurance Sector in Hong Kong.Life insurance products that require periodic premium payments have the potential to generate sustained revenue over an extended period of time. In order to take advantage of the significant growth potential of Hong Kong’s life issuance market and generate recurring income, we intend to continue to devote significant resources to growing this business line. We intend to actively recruit sales and marketing professionals to help increase sales of life insurance products in Hong Kong. We also intend to improve the productivity of individual technical representatives through rigorous training. In addition, we plan on leveraging our existing customer base to cross-sell life insurance products to our non-life insurance customers.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Further Expand Our Distribution Network Through Building Relationships with Strategic Partners.The insurance intermediary sector in Hong Kong is highly competitive. We plan to grow our distribution network by building relationships with partners in mainland China that have the potential of generating large premium in sales such as financial institutes, real estate companies and other public entities and with wealth management companies, high net-worth clients and strategic partners in the Hong Kong market through recruiting and hiring more sales professionals to cover strategic partners. We believe that expanding our distribution network will help us generate more business and grow our sales.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Continue to Strengthen Our Relationships with Leading Insurance Companies. We currently establish and maintain most of our business relationships with insurance companies in Hong Kong. As we plan to expand our distribution network through partners in China in an effort to increase our sales volumes in the future, we hope to obtain favorable commission rates and exclusive rights to distribute high-margin products or collaborate with our insurance company partners to custom-develop products to suit the needs of our prospective customers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Recent Developments



Impact of COVID-19



In 2019, 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.



Due to the COVID-19 pandemic, insurance brokers
in Hong Kong have been greatly affected by the implementation of travel restrictions and social distancing measures. These restrictions
and measures have resulted in a significant decrease in new business for insurance brokers, such as YeeTah, that rely on in-person consultations
and storefronts for customer acquisition.



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 dropped sharply. As
a result, YeeTah’s revenue from commissions on new business decreased significantly during the pandemic. YeeTah’s commissions
from renewal premiums were materially affected since the mainland Chinese customers were 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.



In early 2023, Hong Kong has fully reopened its
borders with mainland China. With the lifting of travel restriction, customers from mainland China can travel to Hong Kong again to meet
with insurance brokers. As a result, the Company’s revenue has significantly increased for the years ended March 31, 2023 compared
to fiscal 2022. Refer to “Results of Operations” below for details.



In May 2023, the World Health Organization declared
an end to the Covid-19 emergency.





9







Public Offering



In March, 2023, the Company consummated a closing
of a public offering of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued and
sold an aggregate of 28,910,400 shares of its common stock at a price of $0.081 per share to certain investors, generating gross proceeds
to the Company of $2,339,937. The material terms of the 2023 Offering are described in the prospectus, dated January 27, 2023, filed by
the Company with the SEC on February 01, 2023, pursuant to Rule 424(b) under the Securities Act. The Offering is registered pursuant to
the Company’s Registration Statement on Form S-1 (Registration No. 333-267263), originally filed with the SEC on September 2, 2022
(as amended, the “Registration Statement”), which was declared effective by the SEC on January 27, 2023.



Change of Principal Office



Our principal executive office changed from Room
715, 7F, The Place Tower C, No. 150 Zunyi Road, Changning District, Shanghai, China to our current principal office, which are located
at Room 1030B, 10/F, Ocean Centre, Harbour City,5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong. Our current phone number is + 85234886893.



The Hong Kong Insurance Market



Hong Kong has one of the most developed insurance
markets in Asia, with the per capita insurance premium standing at high levels and has attracted many of the world’s top insurance
companies. According to the Statistical Highlights issued by Research Office of the Legislative Council Secretariat on May 10, 2019, the
Hong Kong insurance industry has shown a considerable growth in recent years. In 2018, the total gross premiums of the industry were about
HK$531.7 billion (approximately $68.17 billion), representing an increase of 78% over 2013, primarily as a result of an increase of 86%
in long term business (e.g., life and annuity), which we believe might be indicative of the increasing demand for long term insurance
products due to aging population.



As of March 31, 2023,
there were 164 authorized insurers in Hong Kong, of which 89 were pure general insurers, 53 were pure long term insurers, 19 were composite
insurers and 3 were special purpose insurers; furthermore, there were 1,733 licensed insurance agencies, 79,323 licensed individual insurance
agents and 24,060 licensed technical representatives (agent).  In addition, there were 817 licensed insurance broker companies and
10,624 licensed technical representatives (broker) on the same date. In 2021, the total gross premiums of the Hong Kong insurance industry
increased by 0.06% to $581.7 billion.





10







Market Potential and Recent Trends



Life insurance industry in Hong Kong is forecasted
by Global data to reach US $96.5 billion in 2026. Hong Kong life insurance industry is projected to grow at a compound annual growth rate
(CAGR) of 6.6% from HKD543.5b billion (approximately US$70.0 billion) in 2021 to HKD748.6 billion (approximately $US 96.5 billion) in
2026, in terms of direct written premiums (“DWP”), according to GlobalData.









Whole life insurance was the largest segment
with a DWP share of 64.8% in 2020. It declined by 1.1% in 2020 due to the COVID-19 pandemic-led travel restrictions. Prior to the pandemic,
a large proportion of whole life insurance premiums were attributed to Chinese visitors, who purchased their policies from Hong Kong due
to favorable terms and greater flexibility offered to them as compared to policies sold in China. Endowment insurance was the second-largest
line with a 13.4% share in 2020. It grew by 17.5% in 2020, driven by strong demand for high return insurance policies. The introduction
of investment-linked insurance with high mortality coverage is expected to support the demand for endowment products. Endowment insurance
is expected to grow at a CAGR of 9.9% during 2021-2026.



General annuity, which is the third-largest line with a DWP share of
9.3%, was declined by 16.2% in 2020. It is expected to grow at a CAGR of 6.3% during 2021-2026, driven by the demographic factors such
as higher life expectancy. In addition, the introduction of tax benefits on Qualified Deferred Annuity Policies in September 2021 will
further support the demand for annuity products. Term life, pension, and other life insurance lines accounted for the remaining 12.5%
share. Hong Kong’s life insurance market is expected to be the third-highest in the Asia-Pacific region, after India and China,
with a projected CAGR of 6.6% during 2021 to 2026. Gradual resumption in economic activities and increase in the sale of life insurance
policies to mainland Chinese visitors are expected to support the growth of Hong Kong life insurance market over the next five years.





11







Products and Services



We market and sell two broad categories of insurance
products: (1) life and medical insurance products, and (2) general insurance products. As of the date of this Report, insurance products
we sell are underwritten by 19 insurance companies in Hong Kong. In addition, as an MPF Intermediary, we also assist our customers with
their investment through the MPF and the ORSO schemes in Hong Kong. Such services primarily include collection and provision of information
on investment products and exclude investment advisory services.



Life and Medical Insurance Products



Our life and medical
insurance products collectively accounted for approximately 99.49% and 92.7% of our net revenues for the fiscal years ended March 31,
2023 and 2022, respectively. For life and medical insurance products purchased by our customers, we generally receive commissions in the
range of 2.72% to 168% of the first year premiums and in the range of 0% to 49.5% of renewal premiums.



The sale of life and medical insurance products
is, and we currently expect it to continue to be, the major source of our revenue in the next several years. We began offering life insurance
products in 2015 with a focus on individual life products with periodic payment schedules. The major life and medical insurance products
we sell can be broadly classified into the categories set forth below. Due to constant product innovation by insurance companies, some
of the insurance products we sell combine features of one or more of the categories listed below:



| | ● | Individual Health Insurance. The individual health insurance products we sell primarily consist of critical illness insurance products, which provide guaranteed benefits when the insured is diagnosed with specified serious illnesses, and medical insurance products, which provide conditional reimbursement for medical expenses during the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Individual Annuity. The individual annuity products we sell generally provide annual benefit payments after the insured attains a certain age, or for a fixed time period, and provide a lump sum payment at the end of the coverage period. In addition, the beneficiary designated in the annuity contract will receive guaranteed benefits upon the death of the insured during the coverage period. In return, the purchaser of the annuity products makes periodic payments of premiums during a pre-determined accumulation period.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Individual Endowment Life Insurance. The individual endowment products we sell generally provide insurance coverage for the insured for a specified time period and maturity benefits if the insured reaches a specified age. The individual endowment products we sell also provide to a beneficiary designated by the insured guaranteed benefits upon the death of the insured within the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We believe due to mainland
China and Hong Kong’s rapidly aging population, high national savings rate, sustained economic development, rising household income,
strong support from government policies and regulations, and enhanced risk protection awareness, Hong Kong’s life and medical insurance
sector will experience faster growth than the other insurance sectors, and currently we plan to allocate greater resources to develop
our life and medical insurance business.



General Insurance Products



Our general insurance
products, also known as property and casualty insurance products, accounted for approximately 0.51% and 7.3% of our net revenues for
the fiscal years ended March 31, 2023 and 2022, respectively. For general insurance products purchased by our customers, we generally
receive commissions from the insurance companies in the range of 5.0% - 55.0% of the premiums. The major general insurance products we
offer or facilitate to individual customers can be further classified into the following categories:



| | ● | Individual Accident Insurance. The individual accident insurance products we sell generally provide a guaranteed benefit during the coverage period in the event of death or disability of the insured as a result of an accident, or a reimbursement of medical expenses to the insured in connection with an accident. These products typically require only a single premium payment for each coverage period. Because most of the individual accident insurance products we sell are underwritten by general insurance companies, we classify individual accident insurance products as general insurance products.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Travel Insurance.The travel insurance products we sell are short-term insurance providing guaranteed benefit in the event of death or disability and covering travel-related emergencies and losses, either within one’s own country, or internationally. These products typically require only a single premium payment for each coverage period.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





12







| | ● | Homeowner Insurance. The homeowner insurance products we sell primarily cover damages to the insured house, along with furniture and household electrical appliance in the house caused by a number of incidents such as fire, flood and explosion.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Auto Insurance. We facilitate both standard auto insurance policies and supplemental policies, which we refer to as riders. The standard auto insurance policies we facilitate generally have a term of one year and cover damages caused to the insured vehicle by collision and other traffic accidents, falling or flying objects, fire, explosion and natural disasters. We also facilitate standard third-party liability insurance policies, which cover bodily injury and property damage caused by an accident involving an insured vehicle to a person not in the insured vehicle. The riders we facilitate cover additional losses, such as liability to passengers, losses arising from vehicle theft and robbery, broken glass and vehicle body scratches.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



MPF and ORSO Services



The MPF is a compulsory saving scheme (pension fund) for the retirement
of residents in Hong Kong. Most employees and their employers are required to contribute monthly to the MPF schemes provided by approved
private organizations based on the salary and period of employment of the employee. ORSO schemes are retirement schemes set up voluntarily
by employers to provide retirement benefits for their employees. MPF is the mainstream retire plan in Hong Kong. We introduce customers
to the service providers of the MPF and ORSO schemes approved by MPF as trustees to administer the MPF and ORSO schemes. As of March 31,
2023, there were a total 12 approved trustees in Hong Kong, of which, four have signed agreements with us in connection with its provision
of MPF and ORSO related services. We assist employees who are Hong Kong residents to open personal accounts with a new approved trustee
and employers in Hong Kong to set up corporate accounts. We receive service fees in the range of 1.0% - 5.0% of the total investment transferred
by an employee/employer to the new trustee and are paid by the trustee once the transaction is completed. We assisted an aggregate of
44 customers with account opening and transfer of funds through the MPF scheme since inception.



Distribution Network and Marketing



We rely on our technical representatives to market
and sell insurance products in Hong Kong. As of March 31, 2023, we had six technical representatives in Hong Kong. YeeTah was a party
to an agreement with YeeTah Financial Group Co., Ltd. (“YeeTah Financial”), a company controlled by its former officer and
director, which referred customers, most of whom were mainland visitors, to YeeTah for the purchase of insurance products in Hong Kong
in exchange for certain fees paid by YeeTah out of its commissions earned through the insurance policies purchased by the referred customers.



Customers



From March 2017 to March 31, 2023, the total number
of our individual customers grew from 329 to 679. By providing premium customer services to our customers, we also strive to build
a loyal customer base that generates referral and cross-selling opportunities, and that becomes returning customers, i.e., a customer
who purchases more than one product from us. During each of the fiscal years ended March 31, 2023 and 2022, we had 8 customers from Hong
Kong and 55 customers from Mainland China.



Collaboration with Insurance Companies



As of March 31, 2023, YeeTah had entered into
long-term agreements with 19 insurance companies in Hong Kong, pursuant to which we are authorized to market and distribute certain
insurance products of those companies to our customers. These agreements establish, among other things, the scope of our authority, the
pricing of the insurance products YeeTah sells and its commission rates.





13







For the fiscal years ended March 31, 2023 and 2022, our top three insurance
company partners by commissions are as follows:



|             |  | Fiscal Year Ended March 31, 2023 |             |  | Fiscal Year Ended March 31, 2022 | 
|------------ |  | -------------------------------- | ----------- |  | -------------------------------- | 
|Company Name |  | Commissions  (In US$)            |             |  | Percentage  of Revenue           | 
|AIA          |  |                                  | 90,446.17   |  |                                  | 
|PRUDENTIAL   |  |                                  | 1,030,716.7 |  |                                  | 
|FTLIFE       |  |                                  | 2,950.94    |  |                                  | 



Collaboration with Business Partners



On February 5, 2021, the Company entered into
a cooperation agreement (the “Agreement”) with Beijing HeWuHuiYing Equity Investment Co., Ltd., a limited liability company
in China (“HeWuHuiYing”). Pursuant to the Agreement with HeWuHuiYing, HeWuHuiYing will promote the Company’s brand,
products and services in mainland China, including business development, market research, referral and selection of business partners
and clients, customer services and other related services. In consideration for such services, the Company agreed to issue to HeWuHuiYing
an aggregate of 50,000 shares (1,500,000 shares before the Reverse Stock Split) of its common stock (the “Compensation Shares”)
subject to equitable adjustment for stock splits, stock dividends, combinations, recapitalizations and the like, including to account
for any equity securities into which such shares are exchanged or converted; provided, however, HeWuHuiYing shall only be entitled to
(i) 50% of the Compensation Shares if the Company achieves a revenue of at least US$4 million for the fiscal year ended March 31, 2022;
and (ii) the remaining 50% of the Compensation Shares if the Company achieves a revenue of at least US$6 million for the fiscal year ended
March 31, 2023. The determination of whether or not the performance targets are achieved shall be based on the Company’s audited
financial statements for the applicable period. The foregoing performance targets shall be met on an all-or-nothing basis, and there shall
be no partial issuance. Upon satisfaction of the performance targets, the applicable portion of the Compensation Shares shall be issued
to HeWuHuiYing in four equal installments on a quarterly basis beginning on the date of determination that the applicable target is met.



Competition



A number of industry players are involved in the
distribution of insurance products in Hong Kong. We compete for customers on the basis of product offerings, customer services and reputation.
Our principal competitors include:



| | ● | Professional insurance intermediaries.As of March 31, 2023,
    there were a total of 2,356 and 828 insurance agencies and insurance broker companies in Hong Kong, respectively. The insurance
    agencies represent insurance companies, and the insurance broker companies represent customers who purchase insurance products. The
    rest of the insurance intermediaries are other businesses which sell insurance products, such as commercial banks. With an
    increasing consolidation expected in the insurance intermediary sector in the coming years, we expect competition within this sector
    to intensify.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Insurance companies.We compete against insurance companies that rely on their own sales force to distribute their products. All large insurance companies use both in-house sales force and exclusive sales agents to distribute their own products. We believe that we can compete effectively with insurance companies because we focus only on distribution and are able to offer our customers a broader range of insurance products underwritten by multiple insurance companies as well as better insurance premium.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Other business entities.In Hong Kong, some business entities may distribute insurance products as an ancillary business, primarily commercial banks. However, the insurance products distributed by these entities are usually confined to those related to their main lines of business. We believe that we can compete effectively with these business entities because we offer our customers a broader variety of products and professional services.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





14







Although some of our competitors have operated
for a longer period of time than us, with more market shares and greater brand influence, we believe that our entrepreneurial attitude
and smaller size, as well as our customer service, enable us to better respond and adapt to fast changing insurance market conditions
compared to the larger competitors.



Seasonality



Our income is subject to both quarterly and annual
fluctuations as a result of the seasonality of our business, the timing of policy renewals and the net effect of new and lost business.
For life insurance, the insurance companies, under pressure to meet their annual sales targets, would increase their sales efforts during
the fourth quarter of a year by, for example, offering more incentives for insurance intermediaries to increase sales. As a result, income
derived from life insurance products for the fourth quarter of a year is generally the highest among all four quarters. Business activities,
including buying and selling insurance, usually slow down during the Chinese New Year festivities, which occur during the first quarter
of each year. As a result, income derived from our insurance products for the first quarter of a year has generally been the lowest among
all four quarters.



Intellectual Property



As of March 31, 2023, we had no registered or registration-pending
intellectual property.



Employees and Technical Representatives



YeeTah had two full-time employees and we had
two executive officers as of both March 31, 2023 and 2022. YeeTah also had six and ten licensed technical representatives as of March
31, 2023 and 2022, respectively. Technical representatives are licensed individuals who provide regulated advice to a policy holder or
potential policy holder on insurance matters for an insurance agent or broker, or arrange contracts of insurance in or from Hong Kong
on behalf of that insurance agent or broker. YeeTah’s affiliated technical representatives are not our employees and are only compensated
via commissions on sales of insurance policies. The commissions YeeTah pays its technical representatives vary from 100% to 170% of
basic commission rate provided by each insurance company.



Government Regulation



As a business operating in Hong Kong, we are subject
to various regulations and rules promulgated by the Hong Kong government. The following is a brief summary of the Hong Kong laws and regulations
that currently materially affect our business. This section does not purport to be a comprehensive summary of all present and proposed
regulations and legislation relating to the industry in which we operate our business.



Regulations Related to Insurance Intermediaries



Effective September 23, 2019, the Insurance Authority
of Hong Kong (“IA”) took over the regulation of insurance agents and brokers (collectively, “Insurance Intermediaries”)
from the three self-regulatory organizations (i.e., the Insurance Agents Registration Board established under The Hong Kong Federation
of Insurers, The Hong Kong Confederation of Insurance Brokers and The Professional Insurance Brokers Association) and becomes the sole
regulator to license and supervise all Insurance Intermediaries in Hong Kong. The IA is responsible for supervising Insurance Intermediaries’
compliance with the provisions of Insurance Ordinance (Cap. 41) (“IO”), and the relevant regulations, rules, codes and guidelines
issued by the IA. The IA is also responsible for promoting and encouraging proper standards of conduct of Insurance Intermediaries, and
has regulatory powers in relation to licensing, inspection, investigation and disciplinary sanctions.



The regulatory regime for Insurance Intermediaries
is activity-based. Under section 64G of the IO, a person must not carry on a regulated activity, or must not hold out that the person
is carrying on a regulated activity, in the course of business or employment, or for reward unless the person holds an appropriate type
of Insurance Intermediary license or is exempt under the IO.





15







Regulated Activity



Under section 3A(a) of the IO and Schedule 1A
to the IO, a person carries on a regulated activity if the person does any of the following:



| | ● | negotiating or arranging a contract of insurance;
| | - | -------------------------------------------------



| | ● | inviting or inducing, or attempting to invite or induce, a person to enter into a contract of insurance;
| | - | --------------------------------------------------------------------------------------------------------



| | ● | inviting or inducing, or attempting to invite or induce, a person to make a decision in relation to (a) the making of an application or proposal for a contract of insurance; (b) the issuance, continuance or renewal of a contract of insurance; (c) the cancellation, termination, surrender or assignment of a contract of insurance; (d) the exercise of a right under a contract of insurance; (e) the change in any term or condition of a contract of insurance; or (f) the making or settlement of an insurance claim; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | giving advice in relation to (a) the making of an application or proposal for a contract of insurance; (b) the issuance, continuance or renewal of a contract of insurance; (c) the cancellation, termination, surrender or assignment of a contract of insurance; (d) the exercise of a right under a contract of insurance; (e) the change in any term or condition of a contract of insurance; or (f) the making or settlement of an insurance claim (such advice is referred to as “Regulated Advice”).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Types of Licensed Insurance Brokers



The licensing regime under the IO prescribes two
types of licensed insurance brokers: licensed insurance broker companies and licensed technical representatives (broker).



| | ● | A licensed insurance broker company is a company which is granted an insurance broker company license under section 64ZA of the IO to carry on regulated activities in one or more lines of business, and to perform the act of negotiating or arranging an insurance contract as an agent of any policy holder or potential policy holder.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | A licensed technical representative (broker) is an individual who is granted a technical representative (broker) license under section 64ZC of the IO to carry on regulated activities in one or more lines of business, as an agent of any licensed insurance broker company.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A license granted under section 64ZA or 64ZC of
the IO is valid for 3 years or, if the IA considers it appropriate in a particular case, another period determined by the IA, beginning
on the date on which it is granted.



Responsible Officer



Under section 64ZF of the IO, a licensed insurance
broker company should appoint a fit and proper person to discharge his or her responsibilities as a responsible officer of the insurance
broker company, and should provide sufficient resources and support to that person for discharging his or her responsibilities. Prior
approval of the IA is required for appointment of the responsible officer.



Transitional Arrangements for Insurance Brokers



To facilitate a smooth transition, all insurance
brokers who were validly registered with The Hong Kong Confederation of Insurance Brokers or Professional Insurance Brokers Association
immediately before September 23, 2019 are deemed as licensed insurance brokers under the IO for a period of three years. The incumbent
chief executives of the insurance broker companies are also eligible for the transitional arrangements. The IA will, staggered over the
three-year transitional period, invite deemed licensees to submit applications to the IA for granting of formal licenses and approvals.





16







“Fit and Proper” Requirements



Under the IO, a person who is, is applying to
be, or is applying for a renewal of a license to be, a licensed insurance broker is required to satisfy the IA that he/she/it is a fit
and proper person. In addition, the responsible officer(s), controller(s), and director(s) (where applicable) of a licensed insurance
broker company are also required to be fit and proper persons. These “fit and proper” requirements aim at ensuring that the
licensed insurance brokers are competent, reliable and financially sound, and have integrity. Pursuant to the IO, in determining whether
a person is a fit and proper person, the IA must consider, among others, the following factors:



| | ● | the person’s education or other qualifications or experience;
| | - | -------------------------------------------------------------



| | ● | the person’s ability to carry on a regulated activity competently, honestly and fairly;
| | - | ---------------------------------------------------------------------------------------



| | ● | the persons’ reputation, character, reliability and integrity;
| | - | --------------------------------------------------------------



| | ● | the person’s financial status or solvency;
| | - | ------------------------------------------



| | ● | whether any disciplinary action has been taken against the person by the Monetary Authority, the Securities and Futures Commission, the Mandatory Provident Fund Schemes Authority; or any other authority or regulatory organization (in Hong Kong or elsewhere) with functions similar to those of the IA;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | if the person is a company in a group of companies, any information in the possession of the IA relating to any other company in the group of companies or any controller or director of the person or of such company;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the state of affairs of any other business which the person carries on or proposes to carry on; and
| | - | ---------------------------------------------------------------------------------------------------



| | ● | in respect of an application to be licensed as a licensed insurance broker company or renewal of such license, any information in the possession of the IA relating to (i) any current or prospective employees or affiliates of the person, or any other person acting for or on behalf of the person, in each case, for the purposes of carrying on regulated activities and (ii) the question as to whether the person has established effective internal control procedures and risk management systems to ensure its compliance with the IA.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The IA also issued the Guideline on “Fit
and Proper” Criteria for Licensed Insurance Intermediaries under the Insurance Ordinance (Cap. 41) to further explain the criteria
that the IA would adopt in determining whether a person is a fit and proper person. In addition, continuing professional development is
part of the fit and proper requirement and the IA issued the Guideline on Continuing Professional Development for Licensed Insurance Intermediaries
to provide guidance for complying with the continuing professional development requirements.



Financial and Other Requirements for Licensed
Insurance Broker Companies



A licensed insurance broker company is required
to comply with the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (“Broker Rules”),
which set out, inter alia, some of the key requirements in relation to:



| | ● | Share Capital and Net Assets
| | - | ----------------------------



A licensed insurance broker company
must at all times maintain a paid-up share capital of not less than $500,000 and net assets of not less than $500,000, subject to the
transitional arrangements mentioned above, pursuant which, the insurance broker company is required to maintain the amount of paid-up
share capital and net assets of (i) not less than $100,000 for the period from September 23, 2019 to December 31, 2021 and (ii) not less
than $300,000 for the period from January 1, 2022 to December 31, 2023.



| | ● | Professional Indemnity Insurance
| | - | --------------------------------



A licensed insurance broker company
must maintain a professional indemnity insurance policy that provides coverage for claims made against the company for liabilities arising
from breaches of duty in the course of carrying on its regulated activities.





17







| | ● | Client Accounts
| | - | ---------------



A licensed insurance broker company
that receives or holds client monies must maintain at least one client account with an authorized institution in the name of the licensed
insurance broker company in the title of which the word “client” appears.



| | ● | Record Keeping
| | - | --------------



A licensed insurance broker company
must keep, in relation to its business which constitutes the carrying on of regulated activities, where applicable, sufficient accounting
and other records (including records relating to the assets or affairs of the company’s clients).



Licensed insurance broker companies are required
to file their audited financial statements and auditor’s compliance reports to the IA annually, which statements and reports are
reviewed by the IA annually. Any issue noted or qualified opinion expressed by the auditor will be followed up and where applicable, further
actions will be taken as the IA considers necessary.



The Broker Rules also provide certain exemptions
for the broker insurance companies subject to the transitional requirements referenced above during the specified transitional period
in complying with the requirements in relation to professional indemnity insurance, client monies reconciliation and audited financial
statements.



Conduct Requirements



Licensed insurance brokers are required to comply
with the statutory conduct requirements set out in sections 90 and 92 of the IO. The IA also issued the Code of Conduct for Licensed Insurance
Brokers (“Code of Conduct”) to set out the general principles, together with the standards and practices relating to each
general principle, serving as the minimum standards of professionalism to be met by licensed insurance brokers when carrying on regulated
activities.



The general principles that a licensed insurance
broker should comply with include:



| | ● | acting honestly, ethically, with integrity and in good faith;
| | - | -------------------------------------------------------------



| | ● | acting in the best interests of its clients and treating its clients fairly;
| | - | ----------------------------------------------------------------------------



| | ● | acting with due care, skill and diligence;
| | - | ------------------------------------------



| | ● | possessing appropriate levels of professional knowledge and experience and only carrying on regulated activities in respect of which the broker has the required competence;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | providing clients with accurate and adequate information to enable them to make informed decisions;
| | - | ---------------------------------------------------------------------------------------------------



| | ● | providing Regulated Advice suitable for the client taking into account the client’s circumstances;
| | - | --------------------------------------------------------------------------------------------------



| | ● | using best endeavors to avoid conflicts of interests and when such conflicts cannot be avoided, and managing them with appropriate disclosure to ensure clients are treated fairly at all times; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | having sufficient safeguards in place to protect client assets received by the broker or which are in the broker’s possession.
| | - | ------------------------------------------------------------------------------------------------------------------------------



A licensed insurance broker company is required
to have proper controls and procedures in place to ensure that the broker company and its licensed technical representatives (broker)
meet the general principles, standards and practices set out in the Code of Conduct.





18







The Code of Conduct does not have the force of
law, in that it is not subsidiary legislation, and should not be interpreted in a way that would override the provision of any law. A
failure by a licensed insurance broker to comply with the Code of Conduct shall not by itself render the broker liable to any judicial
or other proceedings. However, in any proceedings under the IO before a court, the Code of Conduct is admissible in evidence, and if a
provision in the Code of Conduct appears to the court to be relevant to a question arising in the proceedings, the court must, in determining
the question, take into account any compliance or non-compliance with the Code of Conduct.



Regulation of Mandatory Provident Fund Intermediaries



With the implementation of the Mandatory Provident
Fund Schemes (Amendment) Ordinance 2012, a new statutory regulatory regime for MPF intermediaries came into operation as of November 1,
2012. Under this statutory regime, only registered MPF intermediaries (such as our operating subsidiary) are allowed to engage in conducting
sales and marketing activities and giving advice in relation to MPF schemes.



Under the statutory regime, the Mandatory Provident
Fund Schemes Authority (“MPFA”) is the authority to administer MPF intermediaries, issue guidelines on compliance with statutory
requirements applicable to registered MPF intermediaries, and impose disciplinary sanctions. On the other hand, the IA is given the statutory
role for monitoring the compliance of the registered MPF intermediaries. As a frontline regulator, the IA supervises the conduct requirements
stipulated in the Mandatory Provident Fund Schemes Ordinance (Cap.485) (“MPFSO”). If the IA has reasonable cause to believe
that the registered MPF intermediaries may have failed to comply with the statutory conduct requirements, it may exercise the investigation
powers under the MPFSO for investigating the suspected non-compliance.



Registered MPF intermediaries must comply with
a set of statutory conduct requirements when they engage in conducting sales and marketing activities and giving advice in relation to
MPF schemes. The MPFA has issued the Guidelines on Conduct Requirements for Registered Intermediaries to assist the registered MPF intermediaries
in understanding how to comply with the conduct requirements.



The minimum standards of conduct that a registered
MPF intermediary should adopt include:



| | ● | acting honestly, fairly, in the best interests of the client and with integrity;
| | - | --------------------------------------------------------------------------------



| | ● | acting with care, skill and diligence;
| | - | --------------------------------------



| | ● | advising on matters within competence;
| | - | --------------------------------------



| | ● | having regard to client’s particulars as is necessary;
| | - | ------------------------------------------------------



| | ● | disclosing necessary information to the client;
| | - | -----------------------------------------------



| | ● | disclosing conflict of interest;
| | - | --------------------------------



| | ● | prompt and proper accounting for client assets;
| | - | -----------------------------------------------



| | ● | keeping records of regulated activities;
| | - | ----------------------------------------



| | ● | establishing, maintaining and observing proper controls and procedures for securing compliance by the principal intermediary; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| | ● | appointing a responsible officer to use his or her best endeavors to carry out specified responsibilities in relation to the principal intermediary.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------





19







Regulation Related to Business Registration



The Business Registration Ordinance (Chapter 310
of the Laws of Hong Kong) requires every person carrying on any business in Hong Kong to make an application to the Commissioner of Inland
Revenue in the prescribed manner for the registration of that business, unless it is exempt under the Business Registration Ordinance.
The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable
after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration
certificate for the relevant business or the relevant branch, as the case may be.



Regulation Related to Employment and Labor
Protection



Employment Ordinance (Chapter 57 of the Laws
of Hong Kong)



The Employment Ordinance (Chapter 57 of the Laws
of Hong Kong), or the EO, is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation
of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things,
notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee;
not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays
or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment.



Employees’ Compensation Ordinance (Chapter
282 of the Laws of Hong Kong)



The Employees’ Compensation Ordinance (Chapter
282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees
injured in the course of employment. As stipulated by the ECO, no employer shall employ any employee in any employment unless there is
in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified
in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured
amount shall be not less than HK$100,000,000 (approximately $12,900,000) per event if a company has no more than 200 employees. Any employer
who contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$100,000 (approximately $12,900)
and imprisonment for two years. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice
of insurance in a conspicuous place on each of its premises where any employee is employed. Any employer who, without reasonable cause,
contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$10,000 (approximately $1,290). We
believe that we have taken sufficient employee compensation insurance for our employees required under the ECO.



Mandatory Provident Fund Schemes Ordinance
(Chapter 485 of the Laws of Hong Kong)



The MPFSO is an ordinance enacted for the purposes
of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every
employer of an employee (other than exempt persons) of 18 years of age or above but under 65 years of age to take all practical steps
to ensure the employee becomes a member of a registered MPF Scheme. Subject to the minimum and maximum relevant income levels, it is mandatory
for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. For a monthly-paid
employee, the maximum relevant income level is HK$30,000 (approximately $3,870) per month and the maximum amount of contribution payable
by the employer to the MPF Scheme is HK$1,500 (approximately $193). Any employer who, without reasonable cause, contravenes this requirement
commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $45,200) and imprisonment for three years,
and to a daily penalty of HK$500 (approximately $65) for each day on which the offence is continued. As of the date of this Report, the
Company believe it has made all contributions required of PAM under the MPFSO. We believe that we have made all contributions required
under the MPFSO.





20







Regulations Related to Hong Kong Taxation



Inland Revenue Ordinance (Chapter 112 of the
Laws of Hong Kong)



Under the Inland Revenue Ordinance (Chapter 112
of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax,
or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after
the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is
or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue
not later than one month before such individual ceases to be employed in Hong Kong.



Tax on Dividends



Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by the Company.



Capital Gains and Profit Tax



No tax is imposed in Hong Kong in respect of capital
gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in
Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates
of 8.25% on assessable profits up to HK$2,000,000 (approximately US$258,000) and 16.5% on any part of assessable profits over HK$2,000,000
(approximately US$258,000) on corporations from the year of assessment of 2018/2019 onwards. Certain categories of taxpayers (for example,
financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital
gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes.



Stamp Duty



Hong Kong stamp duty, currently charged at the
ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on
every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical
sale and purchase transaction of Hong Kong shares). In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer
of Hong Kong shares. Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty
not paid will be assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or
before the due date, a penalty of up to ten times the duty payable may be imposed.



Regulations Related to Anti-Money Laundering
and Counter-Terrorist Financing



Anti-Money Laundering and Counter-Terrorist
Financing Ordinance (Chapter 615 of the Laws of Hong Kong)



The AMLO imposes requirements relating to client
due diligence and record-keeping and provides regulatory authorities with the powers to supervise compliance with the requirements under
the AMLO. In addition, the regulatory authorities are empowered to (i) ensure that proper safeguards exist to prevent contravention of
specified provisions in the AMLO; and (ii) mitigate money laundering and terrorist financing risks.



Drug Trafficking (Recovery of Proceeds) Ordinance
(Chapter 405 of the Laws of Hong Kong)



The Drug Trafficking (Recovery of Proceeds) Ordinance
(Chapter 405 of the Laws of Hong Kong), or the DTROP, contains provisions for the investigation of assets suspected to be derived from
drug trafficking activities, the freezing of assets on arrest and the confiscation of the proceeds from drug trafficking activities. It
is an offence under the DTROP if a person deals with any property knowing, or having reasonable grounds to believe, it to be the proceeds
from drug trafficking. The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly
or indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure
to make such disclosure constitutes an offence under the DTROP.





21







Organized and Serious Crimes Ordinance (Chapter
455 of the Laws of Hong Kong)



The Organized and Serious Crimes Ordinance (Chapter
455 of the Laws of Hong Kong), or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise Department
to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the proceeds from organized
and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of specified offences. The
OSCO extends the money laundering offence to cover the proceeds of all indictable offences in addition to drug trafficking.



United Nations (Anti-Terrorism Measures) Ordinance
(Chapter 575 of the Laws of Hong Kong)



The United Nations (Anti-Terrorism Measures) Ordinance
(Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offence to: (i) provide or collect funds (by any
means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole or in part, one or more
terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly, to or for the benefit of
a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate. The UNATMO also requires a
person to report his knowledge or suspicion of terrorist property to an authorized officer, and failure to make such disclosure constitutes
an offence under the UNATMO.



GL3: Guideline on Anti-Money Laundering and
Counter-Terrorist Financing



The Guideline on Anti-Money Laundering and Counter-Terrorist
Financing is issued by the IA, and it sets out the relevant anti-money laundering and counter-financing of terrorism (AML/CFT) statutory
and regulatory requirements. It also prescribes the AML/CFT standards which authorized insurers and reinsurers carrying on long term business,
and licensed individual insurance agents, licensed insurance agencies and licensed insurance broker companies carrying on regulated activities
in respect of long term business (hereinafter referred to as “insurance institutions” (“IIs”)), should meet in
order to comply with the statutory requirements under the AMLO and the IO. Compliance with this Guideline is enforced through the AMLO
and the IO. IIs which fail to comply with this Guideline may be subject to disciplinary or other actions under the AMLO and/or the IO
for non-compliance with the relevant requirements.



PRC Regulations



Enforceability of Civil Liabilities



Half of our officers and directors are residents
of China and a substantial portion of their assets are located outside the United States. As a result, it may be difficult or impossible
for a stockholder to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United
States or any state in the United States. It may also be difficult for a stockholder to enforce judgments obtained in U.S. courts based
on the civil liability provisions of the U.S. federal securities laws against us and our executive officers and directors.



Our counsel as to PRC law has advised us that
there is uncertainty as to whether PRC courts would (i) recognize or enforce judgments of United States courts obtained against us or
our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the
United States, or (ii) entertain original actions brought in each respective jurisdiction against us or our directors or officers
predicated upon the securities laws of the United States or any state in the United States.



Our counsel as to PRC law has further advised
us that the PRC Civil Procedures Law governs the recognition and enforcement of foreign judgments. PRC courts may recognize and enforce
foreign judgments in accordance with the PRC Civil Procedures Law based either on treaties between China and the country where the judgment
is made or on principles of reciprocity between jurisdictions.





22







The PRC does not have any treaties or other agreements
with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the
PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they determine
that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain
whether a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures Law, foreign stockholders
may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have
jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case,
and there must be a concrete claim, a factual basis and a cause for the suit.



Item 1A. Risk Factors



Our business is subject to many significant risks, as more fully described
in this section entitled “Risk Factors.” If any of the risks discussed in this Report actually occur, our business, financial
condition or operating results could be materially and adversely affected. In particular, our risks include, but are not limited to, the
following:



Summary of Risk Factors



Risks Related to Our Business and Industry



| | ● | Our operating subsidiary derives a significant portion of revenues from selling insurance products supplied by our major insurance company partners and our business is subject to concentration risks arising from dependence on a single or limited number of insurance company partners.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | We incurred net losses in the past and there can be no assurance that we will be able to become profitable in the future.
| | - | -------------------------------------------------------------------------------------------------------------------------



| | ● | Our business, financial condition and results of operations have been and may continue to be materially adversely affected by the COVID-19 epidemic in mainland China and Hong Kong.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | All of our sales of life and medical insurance products and general insurance products are conducted through our licensed technical representatives. If we are unable to attract and retain highly productive technical representatives, our business could be materially and adversely affected. Misconduct of the technical representatives may also have a material adverse effect on our business, results of operations or financial condition.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | We are subject to extensive regulations for our insurance brokerage business and operations in Hong Kong. Failure to obtain, renew, or retain licenses, permits or approvals may affect our ability to conduct or expand our business.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





23







| | ● | We face intense competition in the insurance intermediary industry in Hong Kong. If we are unable to compete effectively with both existing and new market participants, we may lose customers and our financial results may be negatively affected.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Our commission revenue is subject to both quarterly and annual fluctuations as a result of the seasonality of our business, the timing of policy renewals and the net effect of new and lost business. The factors that cause the quarterly and annual variations are not within our control.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Our disclosure controls and procedures are not effective and we have identified material weaknesses in our internal control over financial reporting.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



Risks Related to Doing Business in Hong
Kong



| | ● | Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in mainland China and Hong Kong, which could materially and adversely affect our business. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong- Potential political and economic instability in Hong Kong may adversely impact our results of operations. We may also face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business” on page 30, and “- Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may conduct in Hong Kong and accordingly on the results of our operations and financial condition.” on page 31;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | In light of China’s extension of its authority into Hong Kong,
    the Chinese government can change Hong Kong’s rules and regulations at any time with little to no advance notice, and can
    intervene and influence our operations and business activities in Hong Kong. We are currently not required to obtain approval from
    Chinese authorities (including the CSRC and the CAC) to operate or to list on U.S. exchanges. However, to the extent that the
    Chinese government exerts more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers over
    time and if our subsidiary or the holding company were required to obtain approvals in the future, or we inadvertently conclude that
    that approvals were not required, or were denied permission from Chinese authorities to list on U.S. exchanges, our operations may
    materially change, our ability to offer or continue to offer securities to our investors or to continue listing on a U.S. exchange
    may be adversely affected, and the value of our common stock may significantly decline or become worthless, which would materially
    affect the interest of the investors. There is a risk that the Chinese government may intervene or influence our operations at any
    time, or may exert more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers, which could
    result in a material change in our operations and/or the value of our securities. Further, any actions by the Chinese government to
    exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers would
    likely significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the
    value of such securities to significantly decline or be worthless. Please see “Item 1A. Risk Factors – Risks Related
    to Doing Business in Hong Kong - Potential political and economic instability in Hong Kong may adversely impact our results
    of operations. We may also face the risk that changes in the policies of the PRC government could have a significant impact upon the
    business we conduct in the Hong Kong and the profitability of such business,” on page 30,” - Substantial
    uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and
    regulations could have a significant impact upon the business that we may be able to conduct in Hong Kong and accordingly on the
    results of our operations and financial condition.” on page 31, and “- The PRC government exerts substantial
    influence and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business
    activities. We are a Hong Kong-based company with no substantive operations in mainland China. However, if we were to become subject
    to such direct influence or discretion, it may result in a material change in our operations and/or the value of our common stock,
    which would materially affect the interest of the investors.” on page 33;





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| | ● | We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong - The PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. We are a Hong Kong-based company with no substantive operations in mainland China. However, if we were to become subject to such direct influence or discretion, it may result in a material change in our operations and/or the value of our common stock, which would materially affect the interest of the investors” on page 33;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ● | The recent joint statement by the SEC and PCAOB, and the HFCAA all
call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors,
especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering. Trading
in our securities may be prohibited under the HFCAA if the PCAOB determines that it cannot inspect or investigate completely our auditor,
and that as a result an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding
Foreign Companies Accountable Act which would reduce the number of consecutive non-inspection years required for triggering the prohibitions
under the HFCAA from three years to two thus reducing the time before our securities may be prohibited from trading or being delisted.
On December 2, 2021, the SEC adopted rules to implement the HFCAA. Pursuant to the HFCAA, the PCAOB issued its report notifying the Commission
that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong due to positions
taken by authorities in mainland China and Hong Kong. Our auditor is not subject to the determinations announced by the PCAOB on December
16, 2021. However, in the event it is later determined that the PCAOB is unable to inspect or investigate completely the auditor because
of a position taken by an authority in a foreign jurisdiction, such as the PRC or Hong Kong authorities, then such lack of inspection
could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately result in the delisting of the
Company’s securities. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong - Under
the HFCAA, our securities may be prohibited from being traded on any U.S. securities exchange, including the New York Stock Exchange and
Nasdaq, or through any other trading method within the SEC’s regulatory jurisdiction, including the OTC markets if our auditor is
not inspected by the PCAOB for three consecutive years, and this ultimately could result in trading in our securities being prohibited.
Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would
amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets
if its auditor is not subject to PCAOB inspections for two consecutive years instead of three”on page 34;
| | ● | QDM is a holding company with operations conducted through its wholly-owned subsidiary based in Hong Kong. This structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong subsidiary and will be dependent upon contributions from our subsidiary to finance our cash flow needs. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct business. We do not anticipate paying dividends in the foreseeable future; you should not buy our stock if you expect dividends. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong - Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock. Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC” on page 32, and “Item 1A. Risk Factors – Risks Related to Our Business and Industry – We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.” on page 30;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ● | You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of shares of our common stock. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock. Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC.” on page 32;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





25







| | ● | QDM is organized under the laws of the State of Florida as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions such as Hong Kong and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S. Courts against these entities, bring actions in Hong Kong against us or our management or to effect service of process on the officers and directors managing the foreign subsidiaries. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – It may be difficult for stockholders to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders” on page 37;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections if our operations are based in China. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections if our operations are based in China.”on page 37;                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | The market price for our securities could be adversely affected by increased tensions between the United States and China. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – The market price for our securities could be adversely affected by increased tensions between the United States and China.”on page 32;                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | Our business, financial condition and results of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – Our business, financial condition and results of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.”on page 32; and                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ● | The future development of national security laws and regulations in Hong Kong could materially impact our business by possibly triggering sanctions and other measures which can cause economic harm to our business. Please see “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong – The future development of national security laws and regulations in Hong Kong could materially impact our business by possibly triggering sanctions and other measures which can cause economic harm to our business.”on page 32.                                                                                                                                                                                                                                                                              



Risks Related to Our Common Stock



| | ● | The limited public trading market may cause volatility in our stock price.                                                                                                                                                                                                                                                                                             
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | We may not maintain qualification for OTCQB inclusion, and therefore you may be unable to sell your shares.                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Even if a market for our common stock develops, the market price of our common stock may be significantly volatile, which could result in substantial losses for purchasers.                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Our controlling stockholder may exercise significant influence over us and may be subject to conflicts of interest.                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | The Series B and Series C Preferred Stock, which are controlled by Mr. Huihe Zheng, our Chairman of the Board, Chief Executive Officer, have super voting rights that may adversely affect our holders of common stock; in addition, Mr. Zheng, as our controlling stockholder, may exercise significant influence over us and may be subject to conflicts of interest.
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Our management has determined that our disclosure controls and procedures are not effective and we have identified material weaknesses in our internal control over financial reporting.                                                                                                                                                                               



An investment in our securities is highly speculative
and involves substantial risks, including the risks described below. You should carefully consider all of the risks described below, together
with the other information contained in this Report, before making a decision to invest in our securities. The risks highlighted here
are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial
or unlikely to occur could also impair our operations. If any of the risks or uncertainties described below or any such additional risks
and uncertainties actually occur, our business, prospects, financial condition or results of operations could be negatively affected,
and you might lose all or part of your investment.





26







Risks Related to Our Business and Industry



Our business is subject to concentration
risks arising from dependence on a single or limited number of insurance company partners.



We derive a significant portion of revenues from
selling insurance products supplied by our major insurance company partners. For the fiscal year ended March 31, 2023, an aggregate of
98.92% of our total commissions were attributed to our top two insurance companies, each accounted for more than 10% of our total revenue.
For the fiscal year ended March 31, 2022, an aggregate of 81.45% of our total commissions were attributable to our top two insurance
company partners, each accounted for more than 10% of our total revenue.





Because of this concentration in the supply of
the insurance products we sell, our business and operations would be negatively affected if we experience a partial or complete loss of
any of these insurance partners. In addition, any significant adverse change in our relationship with any of these insurance company partners
could result in loss of revenue, increased costs and distribution delays that could harm our business and customer relationships.



If we fail to attract and retain productive
technical representatives to sell the insurance products, our business and operating results could be materially and adversely affected.



All of our sales of life and medical insurance
products and general insurance products are conducted through our licensed technical representatives. We have been actively recruiting
and will continue to recruit technical representatives to join our distribution and service network. Technical representatives have been
instrumental to the development of our life insurance business.



As of March 31, 2023, we had six  technical
representatives. Competition for technical representatives is intense and there can be no assurance that we will be able to attract and
retain such personnel. If we are unable to attract and retain highly productive technical representatives, our business could be materially
and adversely affected.





Misconduct of the technical representatives
may have a material adverse effect on our business, results of operations or financial condition.



Misconduct of the technical representatives could
result in regulatory sanctions, litigation or serious reputational or financial harm to us.



Misconduct may include:



| | ● | the use of methods of solicitation and advertising that are not compatible with the integrity and dignity of the profession of insurance broking;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the use of any illustration, circular or memorandum that misrepresents or is incomplete as regards the terms, benefits or advantages of any contract of insurance issued or to be issued to a prospective purchaser of insurance;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





27







| | ● | the use of any incomplete comparison of any policy or contract of insurance for the purpose of inducing an insured to forfeit or replace a policy or contract of insurance;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | the offer of any payment, allowance or gift as an inducement to any prospective insured to insure through the offeror; and
| | - | --------------------------------------------------------------------------------------------------------------------------



| | ● | holding out to the public or advertising by means of advertisements, cards, circulars, letters, signs or other methods in an irresponsible or untruthful manner.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



Failure to prevent and detect misconduct may have
a material adverse effect on our business, results of operations or financial condition.



We are subject to extensive regulations
for our insurance brokerage business and operations.



We conduct our business primarily in Hong Kong
and our business operations are subject to vigorous regulations in Hong Kong applicable to licensed insurance brokers. Any failure to
comply with applicable laws or regulations could result in fines, censure, suspensions of personnel or other sanctions, including revocation
of our license as insurance broker. Even if a sanction imposed against us or our personnel is small in monetary amount, the adverse publicity
arising from the imposition of sanctions against us by regulators could harm our reputation and impede our ability to retain customers
and develop new customer relationships, which may reduce our revenues.



From time to time, the regulatory landscape in
the insurance industry in Hong Kong involves and changes. We face the risk of significant intervention by regulatory authorities, including
increased registered capital requirements, extended training of the insurance agencies’ personnel, and adoption of costly or restrictive
new regulations and judicial or administrative proceedings. If any restrictive or costly new regulations and rules become effective and
applicable to our business, these regulations may materially limit our activities and operational profitability.



Compliance with changing regulation of corporate
governance and public disclosure, and our management’s inexperience with such regulations, will result in additional expenses and
creates a risk of non-compliance.



Changing laws, regulations and standards relating
to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty
for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.
Our management team will need to invest significant management time and financial resources to comply with both existing and evolving
standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and
attention from revenue generating activities to compliance activities. In addition, our management members who are located in the PRC
has little experience with compliance with U.S. laws (including securities laws). This inexperience may cause us to fall out of compliance
with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.



Failure to obtain, renew, or retain licenses,
permits or approvals may affect our ability to conduct or expand our business.



We are required to obtain applicable licenses,
permits and approvals from different Hong Kong regulatory authorities in order to conduct or expand our business. The IA has promulgated
various regulations on the insurance business, including regulations requiring an insurance broker license. We obtained, renewed and maintained
our insurance broker license as required by the IA. However, there is no assurance that the IA will not issue new regulations governing
the insurance product and service industry that might require us to obtain additional licenses, permits or approvals for our current or
future business operations. Our failure to obtain any such additional licenses, permits or approvals may adversely our business operations
and financial condition.



Competition in our industry is intense and,
if we are unable to compete effectively with both existing and new market participants, we may lose customers and our financial results
may be negatively affected.



The insurance intermediary industry in Hong Kong
is intensely competitive, and we expect competition to persist and further intensify as more insurance broker companies enter the market.
In insurance product distribution, we face competition from insurance companies that use their in-house sales force and exclusive sales
agents to distribute their products, from business entities that distribute insurance products on an ancillary basis, such as commercial
banks, as well as from other traditional insurance intermediaries. Many of our competitors, both existing and newly emerging, have greater
financial and marketing resources than we do and may be able to offer products and services that we do not currently offer and may not
offer in the future. If we are unable to compete effectively against those competitors, we may lose customers and our financial results
may be negatively affected.





28







Because the commission we earn on the sale
of insurance products is based on premiums and commission rates set by insurance companies, any decrease in these premiums or commission
rates may have an adverse effect on our results of operations.



We are an insurance broker and derive revenues
primarily from commissions paid by the insurance companies whose policies our customers purchase. Our commission rates are set by insurance
companies and are based on the types and terms of the insurance products. Commission rates and premiums can change based on the prevailing
economic, regulatory, taxation-related and competitive factors that affect insurance companies. These factors, which are not within our
control, include the ability of insurance companies to place new business, underwriting and non-underwriting profits of insurance companies,
consumer demand for insurance products, the availability of comparable products from other insurance companies at a lower cost, as well
as the tax deductibility of commissions and the consumers themselves.



Because we do not determine, and cannot predict,
the timing or extent of premium or commission rate changes, we cannot predict the effect any of these changes may have on our operations.
Any decrease in premiums or commission rates may significantly affect our profitability.



Quarterly and annual variations in our commission
revenue may unexpectedly impact our results of operations.



Our commission revenue is subject to both quarterly
and annual fluctuations as a result of the seasonality of our business, the timing of policy renewals and the net effect of new and lost
business. During any given year, our commission revenue derived from distribution of life and medical insurance products is highest during
the fourth quarter and is lowest during the first quarter. This general seasonality trend was further affected by the ongoing COVID-19
pandemic, which reduced our first year life insurance commission revenue during 2021 and 2022.  The factors that cause the quarterly
and annual variations are not within our control. Specifically, regulatory changes to product design may result in cessation of products
from time to time and cause quarterly fluctuation in the results of our operations. In addition, consumer demand for insurance products
can influence the timing of renewals, new business and lost business, which generally includes policies that are not renewed, and cancellations.
As a result, quarterly or annual comparisons of our operating results may not be used as an indication of our future performance.



Our future success depends on the continuing
efforts of our senior management team and other key personnel, and our business may be harmed if we lose their services.



Our future success depends heavily upon the continuing
services of the members of our senior management team and other key personnel, in particular, Mr. Huihe Zheng, our President and Chief
Executive Officer. If our senior executives or other key personnel are unable or unwilling to continue in their present positions, we
may not be able to replace them easily, or at all. As such, our business may be disrupted and our financial condition and results of operations
may be materially and adversely affected. Competition for senior management and key personnel in the insurance industry is intense because
of a number of factors including the limited pool of qualified candidates. We may not be able to retain the services of our senior executives
or key personnel, or attract and retain high-quality senior executives or key personnel in the future. In addition, if any member of our
senior management team or any of our other key personnel joins a competitor or forms a competing company, we may lose customers, sensitive
trade information, key professionals and staff members.



We may not be able to ensure the accuracy
and completeness of product information and the effectiveness of our recommendation of insurance products.



Our customers rely on the insurance product information
we provide through our technical representatives. While we believe that such information is generally accurate, complete and reliable,
there can be no assurance that the accuracy, completeness or reliability of the information can be maintained in the future. If our technical
representatives provide any inaccurate or incomplete information due to either their own fault or that of our insurance partners, or we
fail to present accurate or complete information of any insurance products which could lead to our customers’ failure to get the
protection or we being warned or punished by regulatory authorities, our reputation could be harmed and we could experience reduced businesses,
which may adversely affect our business and financial performance.



We may not be able to recommend suitable insurance
products to our customers. Our technical representatives may not fully understand the customers’ needs and recommend suitable products
to them. In addition, because the technical representatives are compensated based on premiums and commission rates, they may be tempted
to sell insurance products with higher commissions rather than those required by or suitable to the customers or prospective customers.
If our customers are recommended insurance products that do not suit their protection needs, they may lose trust in the company. Meanwhile,
our insurance company partners may find our recommendation ineffective. Our customers may consequently be reluctant to continue to use
our services, and our insurance company partners may be hesitant to continue to partner with us. As a result, our business, reputation,
financial performance and prospects will be materially and adversely affected.





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We may face potential liability, loss of
customers and damage to our reputation for any failure to protect the confidential information of our customers.



Our customer database holds confidential information
concerning our customers. We may be unable to prevent third parties, such as hackers or criminal organizations, from stealing information
provided by our customers. Confidential information of our customers may also be misappropriated or inadvertently disclosed through insurance
agents’ misconduct or mistake. We may also in the future be required to disclose certain confidential information concerning our
customers to government authorities. Any compromise of our security could have a material adverse effect on our reputation, business,
prospects, financial condition and results of operations.



Though we have not experienced any material cybersecurity
incidents in the past, if our database was compromised by outside sources or if we were accused of failing to protect the confidential
information of our customers, we may be forced to expend significant financial and managerial resources in remedying the situation, defending
against these accusations and we may face potential liability. Any negative publicity, especially concerning breaches in our cybersecurity
systems, may adversely affect our public image and reputation. Though we take proactive measures to protect against these risks and believe
that our efforts in this area are sufficient for our business, there can be no assurance that such measures will prove effective against
all cybersecurity risks.



We rely on dividends and other distributions
on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries
to make payments to us could have a material adverse effect on our ability to conduct our business.



QDM is a holding company incorporated in Florida,
and it relies on dividends and other distributions on equity paid by its subsidiaries for its cash and financing requirements, including
the funds necessary to pay dividends and other cash distributions to its stockholders and service any debt it may incur. If any of QDM’s
subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends
or make other distributions to QDM.



Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. See “Item 1. Business – Regulation
— Regulations Related to Hong Kong Taxation.” Any limitation on the ability of our Hong Kong subsidiary to pay dividends
or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could
be beneficial to our business, pay dividends, or otherwise fund and conduct our business.



Risks Related to Doing Business in Hong Kong



Potential political and economic instability
in Hong Kong may adversely impact our results of operations. We may also face the risk that changes in the policies of the PRC government
could have a significant impact upon the business we conduct in Hong Kong and the profitability of such business.



Our operational activities are primarily conducted
in Hong Kong. Accordingly, political and economic conditions in Hong Kong and the surrounding region may directly affect our business.
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. The economy of Hong Kong has been negatively impacted, including our retail market, property
market, stock market, and tourism, from such protests.



Under the Basic Law, 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. 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 the quarter ended 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.





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In addition, economic, political and legal developments
and social conditions in the PRC may significantly affect our business, financial condition, results of operations and prospects. The
PRC economy is in transition from a planned economy to a market-oriented economy subject to plans adopted by the government that set national
economic development goals. Policies of the PRC government can have significant effects on economic conditions in the PRC and Hong Kong.
While we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and that business
development in the PRC will continue to follow market forces, we cannot assure you that this will be the case. Our business operations
and prospects, financial condition, and results of operations may be adversely affected by changes in policies by the PRC government,
including:



| | ● | changes in laws, regulations or their interpretation;                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                        
| | ● | confiscatory taxation;                                                                                                 
| |   |                                                                                                                        
| | ● | restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise;
| |   |                                                                                                                        
| | ● | expropriation or nationalization of private enterprises; and                                                           
| |   |                                                                                                                        
| | ● | the allocation of resources.                                                                                           



Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
upon the business that we conduct in Hong Kong and accordingly on the results of our operations and financial condition.



Our business operations may be adversely affected
by the current and future political environment in the PRC. The PRC government has exercised and continues to exercise substantial control
over virtually every sector of the Chinese economy through regulation and state ownership. The interpretations of many laws, regulations
and rules may not always be uniform and the enforcement of these laws, regulations and rules may involve uncertainties for you and us.
Our ability to operate in Hong Kong, conduct overseas offerings and continue to investment in Hong Kong based issuers may be harmed by
these changes in its laws and regulations, including those relating to taxation, import and export tariffs, healthcare regulations, environmental
regulations, land use and property ownership rights, and other matters. 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 Hong Kong or particular regions thereof,
and could limit or completely hinder our ability to offer or continue to offer securities to investors or require us to divest ourselves
of any interest we then hold in Hong Kong properties or joint ventures. Any such actions (including divesture or similar actions) could
result in a material adverse effect on us and on your investment in us and could render our securities and your investment in our securities
worthless.



There are substantial uncertainties regarding
the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our
business, or the enforcement and performance of our contractual arrangements with borrowers in the event of the imposition of statutory
liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate a comprehensive system
of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance,
commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing,
China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects
of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published
cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.
New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have
been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society
and economy in China. Because government agencies and courts that provide interpretations of laws and regulations and decide contractual
disputes and issues may change their interpretation or enforcement very rapidly with little advance notice at any time, we cannot predict
the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness
on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as
well as may cause possible problems to foreign investors.



Although the PRC government has been pursuing
economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth
in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing policies
that impact particular industries in different ways. We cannot assure you that the PRC government will continue to pursue policies favoring
a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership,
social or political disruption, or other circumstances affecting political, economic and social life in the PRC.





31







The future development of national security
laws and regulations in Hong Kong could materially impact our business by possibly triggering sanctions and other measures which can cause
economic harm to our business.



On May 28, 2020, the National People’s Congress
of the People’s Republic of China approved a proposal to impose a new national security law for Hong Kong and authorized the Standing
Committee of the National People’s Congress to proceed to work out details of the legislation to be implemented in Hong Kong (the
“Decision”). The Decision states that the new law will target secession, subversion of state power, terrorism activities and
foreign interference. The stated objective of the Decision is to protect the national security of China as a whole (including Hong Kong
and Macau) and is not intended to have a direct commercial bearing on commercial and economic activities. The government believes the
new law may bring about more stability to Hong Kong, which in turn may lay the foundation for commercial and economic activities to flourish.
On June 30, 2020, China’s National People’s Congress Standing Committee passed the 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. We cannot rule out the possibility that the Decision
and the implementation of the national security law may trigger sanctions or other forms of penalties by foreign governments, which may
cause economic and other hardship for Hong Kong, including companies like us that do business in Hong Kong. It is difficult for us to
predict the impact, in any, the implementation of the national security law will have on our business, as such impact will depend on future
developments, which are highly uncertain and cannot be predicted.



Our Hong Kong subsidiary may be subject
to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements,
conduct business and pay dividends to holders of our common stock. Dividends payable to our foreign investors and gains on the sale of
our shares of common stock by our foreign investors may become subject to tax by the PRC.



QDM is a holding company incorporated in Florida
with its operating subsidiary located in Hong Kong. Accordingly, most of our cash is maintained in Hong Kong Dollars. We conduct no other
business and, as a result, we depend entirely upon our Hong Kong operating subsidiary’s earnings and cash flow. If we decide in
the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of
dividends or other payments from our operating subsidiary. There are currently no restrictions of transferring funds between our Florida
holding company and our operating subsidiary in Hong Kong or limitations on the ability of our Hong Kong subsidiary to issue dividends
or other distributions to its overseas shareholders. However, we cannot assure you that the oversight
of the PRC government will not be extended to companies operating in Hong Kong like our Hong Kong operating subsidiaries.There
is a possibility that the PRC government could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment
of the cash into our business or for the payment of dividends. Any such controls or restrictions may adversely affect our ability to finance
our cash requirements, service debt or make dividend or other distributions to our stockholders and could
result in a material adverse change to our business operations, our prospects, financial condition, and results of operations, and could
cause our common stock to significantly decline in value or become worthless.



The market price for our securities could
be adversely affected by increased tensions between the United States and China.



Recently there have been heightened tensions in
the economic and political relations between the United States and China. On June 30, 2020, the Standing Committee of the PRC National
People’s Congress issued the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special
Administrative Region. This law defines the duties and government bodies of Hong Kong for safeguarding national security and four categories
of offences—secession, subversion, terrorist activities and collusion with a foreign country or external elements to endanger national
security—and their corresponding penalties. On July 14, 2020, U.S. President Donald Trump signed the Hong Kong Autonomy Act, or
HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to
have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized
sanctions on eleven individuals, including Hong Kong chief executive Carrie Lam. The HKAA further authorizes secondary sanctions, including
the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign
persons sanctioned under this authority. The imposition of sanctions such as those provided in the HKAA is in practice discretionary and
highly political, especially in a relationship as extensive and complex as that between the United States and China. It is difficult to
predict the full impact of the HKAA on Hong Kong and companies like us. Furthermore, legislative or administrative actions in respect
of Sino-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our securities could
be adversely affected.



Our business, financial condition and results
of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially
and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.



We currently have only immaterial, non-substantive
operations in mainland China. YeeTah does not sell any insurance products in mainland China or solicit customers or collect, store or
process any personal data of any customer in China, and is not regulated by any insurance regulator in mainland China. As a result, the
laws and regulations of the PRC do not currently have any material impact on YeeTah’s business, financial condition and results
of operations. However, as we operate in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing
or future laws of the PRC become applicable to a company such as us, it will not have a material adverse impact on our business, financial
condition and results of operations and/or our ability to offer or continue to offer securities to investors, any of which may cause the
value of such securities to significantly decline or be worthless.





32







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 do not apply directly to Hong Kong.



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.



We may also become subject to the laws and regulations
of the PRC to the extent we commence business and customer facing operations in mainland China as a result of any future acquisition,
expansion or organic growth.



The PRC government exerts substantial influence
and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. We are a
Hong Kong-based company with no substantive operations in mainland China. However, if we were to become subject to such direct influence
or discretion, it may result in a material change in our operations and/or the value of our common stock, which would materially affect
the interest of the investors.



We have only immaterial, non-substantive operations
in mainland China. We primarily operate in Hong Kong, a special administrative region of China. In addition, YeeTah does not sell any
insurance products in mainland China or solicit any customer in China, and is not regulated by any insurance regulator in mainland China.
The PRC government currently does not exert direct influence and discretion over the manner in which we conduct our business activities
outside of mainland China, however, there is no guarantee that we will not be subject to such direct influence or discretion in the future
due to changes in laws or other unforeseeable reasons or as a result of our expansion or acquisition of operations in mainland China.



The PRC legal system is evolving rapidly and the
PRC laws, regulations, and rules may change quickly with little advance notice. In particular, because these laws, rules and regulations
are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, the interpretation
of these laws, rules and regulations may contain inconsistences, the enforcement of which involves uncertainties. The PRC government has
exercised and continues to exercise substantial control over many sectors of the PRC economy through regulation and/or state ownership.
Government actions have had, and may continue to have, a significant effect on economic conditions in the PRC and businesses which are
subject to such government actions.



If we were to become subject to the direct intervention
or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as a result of our development,
expansion or acquisition of operations in the PRC, it may require a material change in our operations and/or result in increased costs
necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In addition, the market
prices of our common stock could be adversely affected as a result of anticipated negative impacts of any such government actions, as
well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC government oversight and regulation, regardless
of our actual operating performance. There can be no assurance that the Chinese government would not intervene in or influence our operations
at any time.



We are not currently required to obtain permission
from the PRC government for the trading of our common stock on the OTCQB, however there is no guarantee that this will continue to be
the case in the future, or even when such permission is obtained, it will not be subsequently denied or rescinded. Any actions by the
PRC government to exert more oversight and control over offerings (including businesses whose primary operations are in Hong Kong) that
are conducted overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.



We aware that the PRC government initiated a
series of regulatory actions and statements to regulate business operations 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.
Our counsel as to PRC law has advised us that we are not subject to cybersecurity review with the CAC, given that: (i) we do not possess
a large amount of personal information in our business operations; and (ii) data processed in our business does not have a bearing on
national security and thus may not be classified as core or important data by the authorities. In addition, our counsel as to PRC law
has advised us that we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of
our revenues which provided from us and audited by our auditor, and the fact that we currently do not expect to propose or implement
any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB400 million. Currently,
these statements and regulatory actions have had no impact on our daily business operation, the ability to accept foreign investments
and list our securities on an U.S. or other foreign exchange. Since these statements and regulatory actions are new, it is highly uncertain
how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed
implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations
will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign
exchange. See “Item 1. Business – Regulatory Permissions and Developments” on page 4.





33









Under the HFCAA, our securities may be prohibited
from being traded on any U.S. securities exchange, including the New York Stock Exchange and Nasdaq, or through any other trading method
within the SEC’s regulatory jurisdiction, including the OTC markets if our auditor is not inspected by the PCAOB for three consecutive
years, and this ultimately could result in trading in our securities being prohibited. Furthermore, on June 22, 2021, the U.S. Senate
passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and require the SEC to prohibit
an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor is not subject to PCAOB inspections
for two consecutive years instead of three.



As part of a continued regulatory focus in the
United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019,
a bipartisan group of lawmakers introduced bills in both houses of Congress that would require the SEC to maintain a list of issuers for
which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. The Ensuring Quality
Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for
such issuers and, beginning in 2025, the delisting from national securities exchanges of issuers included for three consecutive years
on the SEC’s list. On May 20, 2020, the U.S. Senate passed S. 945, the HFCAA. The HFCAA was approved by the U.S. House of Representatives
on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCAA. In essence, the HFCAA requires the SEC
to prohibit foreign companies from listing securities on U.S. securities exchanges or trading through any other trading method within
the SEC’s regulatory jurisdiction, including trading on the OTC markets, if a company retains a foreign accounting firm that cannot
be inspected by the PCAOB for three consecutive years, beginning in 2021. The enactment of the HFCAA and any additional rulemaking efforts
to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market
price of our securities could be adversely affected, and our securities could be prohibited from being traded on any U.S. national securities
exchange, or through any other trading method within the SEC’s regulatory jurisdiction, including the OTC markets if it is unable
to cure the situation to meet the PCAOB inspection requirement in time. On March 24, 2021, the SEC adopted interim final rules relating
to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply with these rules
if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The
SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described
above. If we fail to meet the new rules before the deadline specified thereunder, we could face possible prohibition from trading on the
OTCQB, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively terminate, our securities
trading in the United States. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure
requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report
issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate
completely because of a position taken by an authority in foreign jurisdictions.



Furthermore, on June 22, 2021, the U.S. Senate
passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and require the SEC to prohibit
an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor is not subject to PCAOB inspections
for two consecutive years instead of three. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides
a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate
completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities
in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements
in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a
registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely
because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which
found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (i) China, and
(ii) Hong Kong. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate
completely registered public accounting firms headquartered in: (i) China, and (ii) Hong Kong. On August 26, 2022, the PCAOB signed a
Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China,
taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered
in mainland China and Hong Kong completely, consistent with U.S law. It includes three provisions that, if abided by, would grant the
PCAOB complete access for the first time: (1) the PCAOB has sole discretion to select the firms, audit engagements and potential violations
it inspects and investigates – without consultation with, nor input from, Chinese authorities; (2) procedures are in place for PCAOB
inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information
as needed; and (3) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB
inspects or investigates. On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms
in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB
could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. However, if in the
future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in
mainland China and Hong Kong, then the companies audited by those registered public accounting firms could be subject to a trading prohibition
on U.S. markets pursuant to the HFCAA.



The audit report included in this Report was issued
by ZH CPA, LLC, a U.S. based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. We have no intention
of dismissing ZH CPA, LLC in the future or engaging any auditor not based in the U.S. and not subject to regular inspection by the PCAOB.
There is no guarantee, however, that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the
entire term of our engagement. The PCAOB is currently unable to conduct inspections in China or Hong Kong without the approval of relevant
government authorities. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investor
may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB,
or a lack of PCAOB inspections of audit work undertaken in China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’
audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate
and accurate. Furthermore, if the PCAOB is unable to inspect or investigate completely our auditor, it could result in the prohibition
of trading in our securities by not being allowed to list on a U.S. exchange, and as a result an exchange may determine to delist our
securities, which would materially affect the interest of our investors.





34







If we become directly subject to the recent scrutiny, criticism
and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve
the matter which could harm our business operations and our reputation and could result in a loss of your investment in our shares, especially
if such matter cannot be addressed and resolved favorably.



U.S. public companies that have substantially
all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators
and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting
irregularities, a lack of effective internal controls over financial accounting and reporting, inadequate corporate governance policies
or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity,
the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually
worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and
external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity
will have on our company and our business. If we become the subject of any unfavorable allegations, whether such allegations are proven
to be true or untrue, we may have to expend significant resources to investigate such allegations and/or defend the Company. This situation
may be a major distraction to our management. If such allegations are not proven to be groundless, our Company and business operations
will be severely hampered and your investment in our stock could be rendered worthless. In addition, major issues with other U.S. listed
Chinese companies in the future, could have a negative effect on the value of your investment, even though the Company is not involved.



Because a majority of our operations are
based in Hong Kong, we are subject to the regulations and rules of the Hong Kong government as well as the influence of the Chinese
government. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the
Chinese economy through regulation and state ownership. Our ability to operate in Hong Kong may be harmed by changes in its laws and
regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The
central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations
that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or
interpretations. 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.



As such, the Company’s business segments
may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject
to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.
The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure
to comply. The Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations
relating to its business or industry. Given that the Chinese government may intervene or influence our operations at any time with little
to no advanced notice, it could result in a material change in our operation and the value of our common stock. Given recent statements
by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, any such
action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the
value of such securities to significantly decline or be worthless.



Furthermore, it is uncertain when and whether
the Company will be required to obtain permission from the PRC government for our current quotation on the OTCQB or any future application
to have our securities list on a U.S. stock exchange, and even when such permission is obtained, whether it will be denied or rescinded.
Although the Company is currently not required to obtain permission from any PRC regulatory authorities and has not received any denial
to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations
relating to its business or industry. As a result, our common stock may decline in value dramatically or even become worthless should
we become subject to new requirement to obtain permission from the PRC government to list on U.S. exchange in the future.





35







The General Office of the Central Committee
of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful
Crackdown on Illegal Securities Activities, which were available to the public on July 6, 2021. These opinions emphasized the need
to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based
companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to
deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy
protection. Moreover, the State Internet Information Office issued the Measures of Cybersecurity Review (Revised Draft for Comments,
not yet effective) on July 10, 2021, which require operators with personal information of more than 1 million users who want to list
abroad to file a cybersecurity review with the Office of Cybersecurity Review. On December 24, 2021, the CSRC, together with other
relevant government authorities in China issued the Provisions of the State Council on the Administration of Overseas Securities
Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the Filing of Overseas Securities Offering and
Listing by Domestic Companies (Draft for Comments) (“Draft Overseas Listing Regulations”). The Draft Overseas Listing
Regulations require that a PRC domestic enterprise seeking to issue and list its shares overseas (“Overseas Issuance and
Listing”) shall complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance and
Listing includes direct and indirect issuance and listing. Where an enterprise whose principal business activities are conducted in
PRC seeks to issue and list its shares in the name of an overseas enterprise (“Overseas Issuer”) on the basis of the
equity, assets, income or other similar rights and interests of the relevant PRC domestic enterprise, such activities shall be
deemed an indirect overseas issuance and listing (“Indirect Overseas Issuance and Listing”) under the Draft Overseas
Listing Regulations. On December 28, 2021, the Cyberspace Administration of China (the “CAC”) jointly with the relevant
authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, replacing the former
Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that operators
of critical information infrastructure purchasing network products and services, and online platform operators (together with the
operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect
or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one
million users’ personal information must undergo a cybersecurity. On February 17, 2023, with the approval of the State
Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, (i)
domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures
with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial
public offerings or listing applications. If a domestic company fails to complete the required filing procedures or conceals any
material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties, such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person
directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines;
(ii) if the issuer meets both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed
an indirect overseas offering and listing by a PRC domestic company: (A) 50% or more of any of the issuer’s operating revenue,
total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal
year were derived from PRC domestic companies; and (B) the majority of the issuer’s business activities are carried out in
mainland China, or its main place(s) of business are located in mainland China, or the majority of its senior management team in
charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland
China. In such circumstances, where a PRC domestic company is seeking an indirect overseas offering and listing in an overseas
market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where
an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings with
the CSRC within three business days after such application is submitted. On February 24, 2023, the CSRC, together with the MOF,
National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions issued by
the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised
Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of
Overseas Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together with the
Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas
offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a
domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to
relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any
documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from
competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic
company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant
individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents
and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant
procedures stipulated by applicable national regulations. As of the date of this Report, the revised Provisions have come into
effect. Any failure or perceived failure by our Company or our subsidiaries to comply with the above confidentiality and archives
administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities
being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if
suspected of committing a crime.





36







The aforementioned policies and any related implementation
rules to be enacted may subject us to additional compliance requirement in the future. While we believe that our operations are not affected
by this, as these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects
at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions
or any future implementation rules on a timely basis, or at all.



It may be difficult for stockholders to
enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders.



Substantially all of our assets are located
in Hong Kong. Moreover, half of our current directors and officers are Chinese nationals. All or a substantial portion of their
assets are located outside the United States. As a result, it may be difficult for our stockholders to effect service of process
within the United States upon our subsidiaries or any individuals. In addition, there is uncertainty as to whether the courts of
Hong Kong or the PRC would recognize or enforce judgments of U.S. courts obtained against us or our officers and/or directors
predicated upon the civil liability provisions of Hong Kong against us or such persons predicated upon the securities laws of the
United States or any state thereof. It is unclear if extradition treaties now in effect between the United States and the PRC would
permit effective enforcement against us or our officers and directors of criminal penalties under the United States Federal
securities laws or otherwise.



In addition, the recognition and enforcement of
foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance
with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made
or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the
United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil
Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment
violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether
and on what basis a PRC court would enforce a judgment rendered by a court in the United States.



It may also be difficult for you or overseas regulators
to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to
obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.
Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region
to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the
United States may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC
Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly
conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities
and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without
prior consent from the securities regulatory authority of the State Council and the competent departments of the State Council. While
detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities
regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by
you in protecting your interests.



U.S. regulatory bodies may be limited in
their ability to conduct investigations or inspections if our operations are based in China.



Any disclosure of documents or information located
in China by foreign agencies may be subject to jurisdiction constraints and must comply with China’s state secrecy laws, which broadly
define the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee
that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities
who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located
in China. Furthermore, under the current PRC laws, any on-site inspection by any of these regulators may be limited or prohibited.





37







Risks Related to Our Common Stock



The limited public trading market may cause
volatility in our stock price.



The quotation of our common stock on the OTCQB
does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced
extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like us. Our common
stock is thus and will be subject to significant volatility. Sales of substantial amounts of our common stock, or the perception that
such sales might occur, could adversely affect prevailing market prices of our common stock.



An active and visible trading market for
our common stock may not develop.



Although our common stock is quoted on the OTCQB
marketplace operated by OTC Markets Group, Inc., trading has been very limited and we cannot predict whether an active market for our
common stock will develop in the future. We are not applying for the listing of our common stock on a national exchange. In the absence
of an active trading market:



| | ● | investors may have difficulty buying and selling or obtaining market quotations;
| | - | --------------------------------------------------------------------------------



| | ● | market visibility for shares of our common stock may be limited; and
| | - | --------------------------------------------------------------------



| | ● | a lack of visibility for shares of our common stock may have a depressive effect on the market price for shares of our common stock.
| | - | ------------------------------------------------------------------------------------------------------------------------------------



The OTCQB is an unorganized, inter-dealer, over-the-counter
market that provides significantly less liquidity than Nasdaq Stock Market or the New York Stock Exchange. The trading price of the common
stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts’
earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and
other factors. These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market
price of our common stock.



We may not maintain
qualification for OTCQB inclusion, and therefore you may be unable to sell your shares.



Our common stock is eligible
for quotation on the OTCQB. However, trading of our common stock could be suspended. If for any reason our common stock does not become
eligible or maintain eligibility for quotation on the OTCQB or a public trading market does not develop, purchasers of shares of our common
stock may have difficulty selling their shares should they desire to do so. If we are unable to satisfy the requirements for quotation
on the OTCQB, any quotation in our common stock could be conducted in the “pink sheets” market. As a result, a purchaser of
our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares. This would
materially and adversely affect the liquidity of our securities.



Even if a market for our common stock develops,
the market price of our common stock may be significantly volatile, which could result in substantial losses for purchasers.



The market price for our common stock may be significantly
volatile and subject to wide fluctuations in response to factors including the following:



| | ● | actual or anticipated fluctuations in our quarterly or annual operating results;
| | - | --------------------------------------------------------------------------------



| | ● | changes in financial or operational estimates or projections;
| | - | -------------------------------------------------------------



| | ● | conditions in markets generally;
| | - | --------------------------------



| | ● | changes in the economic performance or market valuations of companies similar to ours; and
| | - | ------------------------------------------------------------------------------------------



| | ● | general economic or political conditions in the United States or elsewhere.
| | - | ---------------------------------------------------------------------------



In some cases, following periods of volatility
in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those
companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which
could significantly harm our business operations and reputation.



Our controlling stockholder may exercise
significant influence over us and may be subject to conflicts of interest.



Our Chairman of the Board, Chief Executive Officer
and President, Huihe Zheng, owns approximately 89.0% of our outstanding voting power. Mr. Zheng thus has the power, on his own, to determine
the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations
and the sale of all or substantially all of our assets, election of directors, approval of equity incentive plans, and other significant
corporate actions. Mr. Zheng also has the power to prevent or cause a change in control. In addition, without the consent of Mr. Zheng,
we could be prevented from entering into transactions that could be beneficial to us. The interests of Mr. Zheng may differ from the
interests of our other stockholders, which cause him to be faced with conflicts of interests that may not be resolved in favor of or
to the satisfaction of our minority stockholders.





38







The Series B and Series C Preferred Stock,
which are controlled by our Chairman of the Board, Chief Executive Officer, have super voting rights that may adversely affect our holders
of common stock.



Except as required by law, holders of Series B
and Series C Preferred Stock (which is currently controlled by Huihe Zheng, our Chairman of the Board, Chief Executive Officer) are entitled
to super voting rights. Each share of Series B Preferred Stock is entitled to 100 votes and each share of Series C Preferred Stock is
initially entitled to eleven votes for each share of common stock into which such share of Series C Preferred Stock could then be converted.
Holders of Series B and Series C Preferred Stock will vote together on all matters upon which common stock holders are entitled to vote.
The voting rights of holders of our common stock will be diluted as a result of these super voting rights.



Our common stock may be considered a “penny
stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.



Our common stock, which is currently quoted on
OTCQB, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny
stock” under Section 3a51-1 of the Exchange Act, as amended. Our common stock may be a “penny stock” if it meets one
or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a “recognized”
national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv)
is issued by a company that has been in business less than three years with net tangible assets less than $5 million. The principal result
or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock
will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act.
For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the
risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting
any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the
broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions;
(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii)
above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s
financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and
time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or
otherwise.



FINRA sales practice requirements may also
limit your ability to buy and sell our common stock, which could depress the price of our shares.



FINRA rules require broker-dealers to have
reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer.
Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things.
Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will
not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that
their customers buy our common stock, which may limit your ability to buy and sell our shares, have an adverse effect on the market
for our shares, and thereby depress our share price.



You may face significant restrictions on
the resale of your shares due to state “blue sky” laws.



Each state has its own securities laws, often
called “blue sky” laws, which (1) limit sales of securities to a state’s residents unless the securities are registered
in that state or qualify for an exemption from registration, and (2) govern the reporting requirements for broker-dealers doing business
directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction,
or it must be exempt from registration. The applicable broker-dealer must also be registered in that state.



We do not know whether our securities will be
registered or exempt from registration under the laws of any state. A determination regarding registration will be made by those broker-dealers,
if any, who agree to serve as market makers for our common stock. We have not yet applied to have our securities registered in any state
and will not do so until we receive expressions of interest from investors resident in specific states after they have viewed this Report.
There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities.
You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your shares without
the significant expense of state registration or qualification.





39







Our management has determined that our disclosure
controls and procedures are not effective and we have identified material weaknesses in our internal control over financial reporting.



In connection with the preparation of our financial
statements for the fiscal years ended March 31, 2023 and 2022, our management concluded that our internal control over financial reporting
was not effective and we identified several material weaknesses. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis. In addition, as of March 31, 2023, our management concluded
that our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting.
The material weaknesses result from the following: (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.



Each of the material weaknesses described above
could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim consolidated
financial statements that would not be prevented or detected. We cannot assure you that any measures we may take in the future will be
sufficient to remediate the material weaknesses described above or avoid potential future material weaknesses. If we are unable to report
financial information timely and accurately or to maintain effective disclosure controls and procedures, our stock price could be negatively
impacted and we could be subject to, among other things, regulatory or enforcement actions by the SEC.



If securities or industry analysts do not
publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price
and trading volume could decline.



The trading market for our common stock will be
influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have
and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the trading price
of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts who cover us downgrade our stock,
our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us,
we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.



We do not foresee paying cash dividends
in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if
any.



We do not plan to declare or pay any cash dividends
on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result,
investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation,
if any, of our shares may be investors’ sole source of gain for the foreseeable future. Moreover, investors may not be able to resell
their common stock at or above the price they paid for them.



The rights of the holders of common stock
may be impaired by the potential issuance of preferred stock.



Our Board of Directors may, without stockholder
approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights that could adversely affect the voting
power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right to more than one vote
per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The possible impact on takeover
attempts could adversely affect the price of our common stock. Although we have no present intention to issue any additional shares of
preferred stock or to create any new series of preferred stock, we may issue such shares in the future.



You may experience additional dilution as
a result of future equity offerings.



In order to raise additional capital, we have
issued equity securities in the past and may in the future offer additional shares of our common stock or other securities convertible
into or exchangeable for our common stock at prices that may not be the same as the price per unit in our previous equity offering. The
price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in
future transactions, may be lower than the price per share paid by investors in our previous equity offering.





40







Shares of our common stock that have not
been registered under federal securities laws are subject to resale restrictions imposed by Rule 144, including those set forth in Rule
144(i) which apply to a former “shell company.”



Prior to the closing of the Share Exchange, we
were deemed a “shell company” under applicable SEC rules and regulations because we had no or nominal operations and either
no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents
and nominal other assets. Pursuant to Rule 144 promulgated under the Securities Act, sales of the securities of a former shell company,
such as us, under that rule are not permitted (i) until at least 12 months have elapsed from the date on which our Current Report on Form
8-K reflecting our status as a non-shell company, was filed with the SEC; (ii) unless at the time of a proposed sale, we are subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act and have filed all reports and other materials required to be filed
by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, other than Form 8-K reports; or (iii) until
the effectiveness of a registration statement under the Securities Act relating to our common stock. Therefore, unless we register such
shares of common stock for sale under the Securities Act, most of our stockholders will be forced to hold their shares of our common stock
for at least that 12-month period before they are eligible to sell those shares, and even after that period, sales may not be made under
Rule 144 unless we and the selling stockholders are in compliance with other requirements of Rule 144. Further, it will be more difficult
for us to raise funding to support our operations through the sale of debt or equity securities unless we agree to register such securities
under the Securities Act, which could cause us to expend significant time and cash resources. Additionally, our previous status as a shell
company could also limit our use of our securities to pay for any acquisitions we may seek to pursue in the future (although none are
currently planned). The lack of liquidity of our securities as a result of the inability to sell under Rule 144 for a longer period of
time than a non-former shell company could cause the market price of our securities to decline.



Item 1B. Unresolved Staff Comments.



Not applicable.



Item 2. Description of Property.



Our principal executive office is located at
Room 1030B, 10/F, Ocean Centre, Harbour City, 5 Canton Road, Tsim Sha Tsui, Hong Kong.



We do not lease or own any other properties.



Item 3. Legal Proceedings.



There are no pending legal proceedings to which
the Company or its subsidiaries are a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially
of more than 5% of any class of the Company’s voting securities, or security holder is a party adverse to the Company or has a material
interest adverse to the Company. 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.



Item 4. Mine Safety Disclosures.



Not applicable.





41







PART II



Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



(a) Market Information



Our common stock is quoted on OTCQB Marketplace
operated by the OTC Markets under the symbol “QDMI.” There has been limited trading in our shares of common stock. We cannot
assure you that there will be an active market in the future for our common stock.



(b) Stockholders of Record



Based upon information furnished by our transfer
agent, as of June 26, 2023, we had approximately 380 stockholders of record. Because some of our common stock is held by brokers
and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders.





(c) Dividends



We are permitted under the Florida law to provide
funding to our subsidiaries, including YeeTah, through loans or capital contributions without restrictions on the amount of the funds.
There are no restrictions or limitations on our ability to distribute earnings from our businesses, including subsidiaries, to the U.S.
investors. YeeTah is permitted under the laws of Hong Kong to provide funding to QDM HK and QDM BVI, the holding company incorporated
in Hong Kong and the British Virgin Islands, respectively, through dividend distribution without restrictions on the amount of the funds.
As of the date of this Report, there has been no dividends or distributions between our holding company and our subsidiaries nor do we
expect such dividends or distributions to occur in the foreseeable future among our holding company and its subsidiaries.



YeeTah currently intends to retain all
available funds and future earnings, if any, for the operation and expansion of its business and does not anticipate declaring or
paying any dividends in the foreseeable future. There are no significantrestrictions
and limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the parent company and
U.S. investors or our ability to settle amounts owed. There are no restrictions on foreign exchange or our ability to transfer cash
between entities within our group, across borders, or to U.S. investors. However, the PRC government has significant authority to
intervene or influence the China operations of an offshore holding company at any time, and such oversight may also extend to our
Hong Kong operating company. We cannot assure you that the PRC government will not prevent us from transferring the cash we maintain
in Hong Kong outside of Hong Kong, or restrict our ability to deploy our cash into business or to pay dividends. We could also be
subject to limitations on the transfer or the use of our cash if we expand our business operations into China or conduct our
operations in some other ways such that we become subject to PRC laws that regulate these activities. In addition, if YeeTah incurs
debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other
distributions to us. Any limitation on our ability to transfer or use our cash could
materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay
dividends, or otherwise fund and conduct our business.



We have never paid or declared any cash dividends
on our common stock and do not anticipate paying cash dividends in the foreseeable future. The declaration of dividends on any class of
shares is within the discretion of the board of directors, subject to the Florida law, out of legally available funds, and will depend
on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. If we determine to
pay dividends on any of our capital stock in the future, as a holding company, we will be dependent on receipt of funds from our Hong
Kong subsidiary YeeTah. None of our subsidiaries has made any dividends or distributions to us. Under the current practice of the Inland
Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. There are no restrictions or limitation
under the laws of Hong Kong imposed on the conversion of HKD into foreign currencies and the remittance of currencies out of Hong Kong.
See “Item 1A. Risk Factors – Risks Related to Our Business and Industry – We rely on dividends and other distributions
on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries
to make payments to us could have a material adverse effect on our ability to conduct our business.”



Any future determination related to our dividend
policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital
requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the
restrictions contained in any future financing instruments.



Current PRC regulations permit PRC companies to
pay dividends to its overseas shareholders only out of their accumulated profits, if any, determined in accordance with Chinese accounting
standards and regulations. In addition, each of such companies in China is required to set aside at least 10% of its after-tax profits
each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China
is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be
set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other
ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the company, the reserve funds
are not distributable as cash dividends except in the event of liquidation. As of the date of this Report, we do not have any PRC subsidiaries.





42







There
are no other significant restrictions and limitations on our ability to distribute earnings from our businesses, including our
subsidiaries, to the parent company and U.S. investors or our ability to settle amounts owed. There are no significant restrictions
on foreign exchange or our ability to transfer cash between entities within our group, across borders, or to U.S. investors. The PRC
government has significant authority to intervene in or influence the China operations of an offshore holding company at any time,
and such oversight may also extend to our Hong Kong operating company. We cannot assure you that the PRC government will not prevent
us from transferring the cash we maintain in Hong Kong outside of PRC, or restrict our ability to deploy our cash into business or
to pay dividends. We could also be subject to limitations on the transfer or the use of our cash if we expand our business
operations into China or conduct our operations in some other ways such that we become subject to PRC laws that regulate these
activities. Any limitation on our ability to transfer or use our cash could materially and adversely limit our ability togrow,
make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our
business.



If needed,
cash can be transferred between our holding company and subsidiaries through intercompany fund advances, and there are currently no restrictions
of transferring funds between our Florida holding company and its subsidiaries. No transfer of cash or other types of assets has been
made between our Florida holding company and its subsidiaries as of the date of this Report.



(d) Securities Authorized
for Issuance under Equity Compensation Plans



We currently do not have any equity compensation
plans.



(e) Recent Sales of Unregistered
Securities



On January 22, 2020, 24/7 Kid converted its outstanding
convertible notes including principal and accrued interest in the aggregate amount of $271,642 into 339,553 shares of common stock at
a conversion price of $.8 per share.



On February 11, 2020, 24/7 Kid issued 1,040,000
shares of common stock to Timothy Shannon in lieu of accrued compensation. On February 13, 2020, 24/7 Kid cancelled 330,000 shares of
common stock issued to Timothy Shannon.



The securities issued in the above transactions
were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act.



On February 11, 2020, 24/7 Kid converted 10,000 shares of Series
A Preferred Stock into 100,000 shares of common stock. The issuance was made in reliance upon the exemption from registration under Section
3(a)(9) of the Securities Act.



On April 8, 2020, upon effectiveness of the Merger,
we issued an aggregate of 1,667,658 shares of common stock and 13,500 shares of Series B Preferred Stock to the stockholders of 24/7 Kid
in exchange for shares of common stock and Series B Preferred Stock of 24/7 Kid on a one-for-one basis.



On October 21, 2020, upon closing of the Share Exchange, we issued
an aggregate of 900,000 shares of Series C Preferred Stock to the QDM BVI Shareholder, with each share of Series C Preferred Stock initially
being convertible into 11 shares of our common stock, subject to certain adjustments and limitations.



On November 11, 2020, we issued 20,000 shares
of common stock to our directors and executive officers, with 5,000 shares of common stock issued to each person, for their services rendered
as directors and executive officers for 2020.



The issuances of shares of Series C Preferred
Stock and shares of common stock to our directors and executive officers were in reliance upon an exemption from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) thereof.



On February 5, 2021, we entered into the Agreement
with HeWuHuiYing. Pursuant to the Agreement with HeWuHuiYing, HeWuHuiYing will promote our brand, products and services in mainland China,
including business development, market researches, referral and selection of business partners and clients, customer services and other
related services. In consideration for such services, we agreed to issue to HeWuHuiYing an aggregate of 50,000 Compensation Shares (1,500,000
Compensation Shares before the Reverse Stock Split) (subject to equitable adjustment for stock splits, stock dividends, combinations,
recapitalizations and the like, including to account for any equity securities into which such shares are exchanged or converted; provided,
however, HeWuHuiYing shall only be entitled to (i) 50% of the Compensation Shares if we achieve a revenue of at least US$4 million for
the fiscal year ended March 31, 2022; and (ii) the remaining 50% of the Compensation Shares if we achieve a revenue of at least US$6 million
for the fiscal year ended March 31, 2023. The determination of whether or not the performance targets are achieved shall be based on our
audited financial statements for the applicable period. The foregoing performance targets shall be met on an all-or-nothing basis, and
there shall be no partial issuance. Upon satisfaction of the performance targets, the applicable portion of the Compensation Shares shall
be issued to HeWuHuiYing in four equal installments on a quarterly basis beginning on the date of determination that the applicable target
is met.



43







The issuance of the Compensation Shares will be
in reliance upon an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof.



In April 2021, the Company consummated a closing of a “best efforts”
self-underwritten public offering of its common stock and sold an aggregate of 16,708 shares of its common stock, at a price of $12 per
share to certain investors, generating gross proceeds of $200,500. The material terms of a “best efforts” self-underwritten
public offering are described in the prospectus, dated April 13, 2021, filed by the Company with the SEC on April 14, 2021, pursuant to
Rule 424(b) under the Securities Act, and is registered pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-252967),
originally filed with the SEC on February 10, 2021, which was declared effective by the SEC on April 13, 2021.



On
May 17, 2021, upon receipt of a conversion notice from holders of the Series C Preferred Stock, the Company issued 134,975 shares (4,049,254
shares before the Reverse Stock Split) of the common stock, upon conversion of an aggregate
of 368,114 shares of Series C Preferred Stock, at a conversion ratio of 30-for-11 (1-for 11 before the Reverse
Stock Split), pursuant to the terms of the Certification of Designation for the Series C Preferred Stock. The issuance of shares
of common stock upon conversion of the Series C Preferred Stock was deemed to be exempt from registration under the Securities Act, in
reliance on Section 3(a)(9) of the Securities Act.



In March, 2023, the Company also granted
36,000 shares to certain executives and directors of the Company for their services rendered. The fair value of the shares granted
is $36,000 on the grant date, which is recognized as shared-based payment expense for the year ended March 31, 2023. The issuance of
shares of common stock was deemed to be exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the
Securities Act.



(f) Purchases of Equity
Securities by the Issuer and Affiliated Purchasers



HW FUND and Willington Capital Limited, which are the affiliated purchasers
to the Company, participated in the share subscription in the 2023 Offering. Huihe Zheng, the Company’s Chief Executive Officer
and President, is the controlling shareholder and director of HW FUND and holds the voting and dispositive power over the shares held
by HW FUND. Huili Shen, the Company’s director, is the sole shareholder and director of Willington Capital Limited and holds the
voting and dispositive power over the shares held by Willington Capital Limited. HW FUND purchased 12,000,000 common stock in consideration
of US$972,000.  Willington Capital Limited purchased 5,000,000 common stock in consideration of US$405,000.



Item 6. [Reserved].



Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.



The following discussion
and analysis is based on, and should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere
in this Report. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are
forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors.
These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions
or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this
Report, and other factors that we may not know.



Overview



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 until our acquisition of YeeTah, as more fully
described below.



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 30,000 shares (900,000 shares before the Reverse Split) of a newly designated Series C Preferred
Stock, with each share of Series C Preferred Stock initially being convertible into 11 shares of our common stock, subject to certain
adjustments and limitations. 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.



On November 3, 2021,
the Company acquired 100% of the issued and outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. The Company
acquired QDMS through an intermediary holding company, LGL, which was incorporated on July 29, 2021 in the BVI. Before the acquisition,
Huihe Zheng was the sole shareholder of QDMS. As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration
of EUR5,000 in November 2021 and at the same time the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to the Company
for a consideration of USD$1.00. As a result, the Company acquired a 100% ownership of LGL, which, in turn, owns 100% of QDMS. QDMS plans
to engage in the research and development of customer relationship management (“CRM”) software as a service (“SaaS”),
with a business model derived from “customer-centered” CRM concept to improve enterprise-customers relationship. We plan to
market QDMS’ SaaS services to our network of banks, securities companies, insurance companies and other financial services providers
in Hong Kong and China.



44







Impact of COVID-19



In 2019, 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.



Due to the COVID-19 pandemic, insurance brokers
in Hong Kong have been greatly affected by the implementation of travel restrictions and social distancing measures. These restrictions
and measures have resulted in a significant decrease in new business for insurance brokers, such as YeeTah, that rely on in-person consultations
and storefronts for customer acquisition.



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 dropped sharply. As
a result, YeeTah’s revenue from commissions on new business decreased significantly during the pandemic. YeeTah’s commissions
from renewal premiums were materially affected since the mainland Chinese customers were 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.



In early 2023, Hong Kong has fully reopened its
borders with mainland China. With the lifting of travel restriction, customers from mainland China can travel to Hong Kong again to meet
with insurance brokers. As a result, the Company’s revenue has significantly increased for the years ended March 31, 2023 compared
to fiscal 2022. Refer to “Results of Operations” below for details.



In May 2023, the World Health Organization declared
an end to the Covid-19 emergency.



Public Offering



In March, 2023, the Company consummated a closing of a public offering
of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued and sold an aggregate
of 28,910,400 shares of its common stock at a price of $0.081 per share to certain investors, generating gross proceeds to the Company
of $2,339,937. The material terms of the 2023 Offering are described in the prospectus, dated January 27, 2023, filed by the Company with
the SEC on February 01, 2023, pursuant to Rule 424(b) under the Securities Act. The Offering is registered pursuant to the Company’s
Registration Statement on Form S-1 (Registration No. 333-267263), originally filed with the SEC on September 2, 2022 (as amended, the
“Registration Statement”), which was declared effective by the SEC on January 27, 2023.



Results of Operations



Years Ended March 31, 2023 and 2022



The following table presents an overview of the
results of operations for the years ended March 31, 2023 and 2022:



|                                  |  | For the Years Ended  March 31, |          
|--------------------------------- |  | ------------------------------ | ---------
|                                  |  | 2023                           |          
|Revenue                           |  | $                              | 1,133,146
|Cost of sales                     |  |                                | 716,751  
|Gross profit                      |  |                                | 416,395  
|                                  |  |                                |          
|Operating expenses                |  |                                |          
|General & administrative expenses |  | $                              | 374,142  
|Total operating expenses          |  |                                | 374,142  
|                                  |  |                                |          
|Income (loss) from operations     |  |                                | 42,253   
|                                  |  |                                |          
|Total other expense (income)      |  |                                | (2,297   
|                                  |  |                                |          
|Net income (loss)                 |  | $                              | 44,550   



Revenue



Revenue increased by approximately $1.1 million
or 1543.0% for the year ended March 31, 2023 as compared to the fiscal year of 2022. The increases were mainly due to lifting of COVID-19
travel restriction and quarantine measures. Due to the COVID-19 pandemic, insurance brokers in Hong Kong have been greatly affected by
the implementation of travel restrictions and social distancing measures. These restrictions and measures have resulted in a significant
decrease in new business for insurance brokers, such as YeeTah, that rely on in-person consultations and storefronts for customer acquisition.
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 travel restrictions related to the COVID-19 epidemic, mainland Chinese
customers dropped sharply in fiscal 2022. As a result of the lifting of the travel restrictions, mainland Chinese customers can travel
to Hong Kong again. YeeTah’s revenue from commissions on new business therefore increased significantly during fiscal 2023 compared
to fiscal 2022.





45







Cost of sales



The amounts increased by approximately $0.6 million or 941.2%
for the year ended March 31, 2023 as compared to the same period of 2022. The increase was due to the significant increases of revenue.



General and administrative expenses



General and administrative expenses generally
are fixed and consist primarily of employee salaries, office rents, insurance costs, general office operating expenses (e.g., utilities,
repairs and maintenance) and professional fees.



General
and administrative expenses decreased by approximately $0.003 million
or 0.7 % for the year ended March 31, 2023 as compared to the same period of 2022. The change is primarily due to the fact that there
were more professional expenses in relation to amendments to the Company’s Annual Report on Form 10-K in 2022.



Net
income (loss)



As a result of the factors described above, net income for the year
ended March 31, 2023 increased by approximately $0.4 million or 111.2%  as compared to the same period of 2022, which incurred a
net loss of $0.4 million.



Foreign Currency Translation



The Company’s reporting currency is the
United States dollar (“US$”). The Company’s operations are principally conducted in Hong Kong where the Hong Kong dollar
is the functional currency. The functional currency of the Company’s two subsidiaries, Lutter Global Limited and QDMI Software Group
Limited, is the Euro.

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 sheet date. The resulting exchange
differences are reported in the statements of operations and comprehensive loss.



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 Company’s balance sheets, income statement items and cash flow items for both the years ended
March 31, 2023 and 2022.



The exchanges rates used for translation from
Euro to US$ are as follows:



|                          |  |  | March 31, 2023  |  |  |  | March 31, 2022  | 
|------------------------- |  |  | --------------- |  |  |  | --------------- | 
|                          |  |  |                 |  |  |  |                 | 
|Period-end spot rate      |  |  | EUR1= US$1.0872 |  |  |  | EUR1= US$1.1093 | 
|Average rate for the year |  |  | EUR1= US$1.0414 |  |  |  | EUR1= US$1.1627 | 



Liquidity and Capital Resources



We have financed our operations primarily through
cash generated by operating activities, equity financings and advances from our principal stockholder. QDM is a holding company and conducts
substantially all of its operations through YeeTah, which is its only entity that has operating cash inflows. Our expenses
are paid directly either by YeeTah or our principal stockholder.



Yeetah is a registered insurance brokerage in Hong Kong and subject
to certain Hong Kong insurance broker requirements regarding its share capital and net assets. As per the requirements, a licensed insurance
broker company must at all times maintain a paid-up share capital of not less than USD64,103 (HK$500,000) and net assets of not less than
USD64,103 (HK$500,000), subject to certain transitional arrangements, pursuant which, the Company is required to maintain the amount of
paid-up share capital and net assets of (i) not less than USD12,821 (HK$100,000) for the period from September 23, 2019 to December 31,
2021 and (ii) not less than USD38,462 (HK$300,000) for the period from January 1, 2022 to December 31, 2023.



46







There have been no cash and any asset transactions
between us and our subsidiaries since the Share Exchange. As of March 31, 2023 and, we had $2,717,745 and $69,658, respectively, in cash
and cash equivalents, which primarily consisted of cash deposited in banks.



|                                                    |  | Year Ended
March 31,
2023 |           |   | Year Ended
March 31,
2022 |  
|--------------------------------------------------- |  | ------------------------- | --------- | - | ------------------------- | -
|Net cash provided by (used) in operating activities |  | $                         | 11,813    |   |                           | $
|Net cash used in investing activities               |  |                           | (17,503   | ) |                           |  
|Net cash provided by financing activities           |  |                           | 2,653,431 |   |                           |  
|Effect of Exchange rate changes on cash             |  |                           | 346       |   |                           |  
|Net increase in cash, cash equivalents              |  |                           | 2,648,087 |   |                           |  
|Cash and cash equivalents at beginning of period    |  |                           | 69,658    |   |                           |  
|Cash and cash equivalents at end of period          |  | $                         | 2,717,745 |   |                           | $



Our working capital requirements mainly comprise
of commissions paid to technical representatives and referral fees, operating lease payments 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 of 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.



Operating Activities:



Net
cash generated from operating activities was approximately $12,000 for the year ended March 31, 2023, compared to net cash used in operating
activities of $399,000 for 2022, representing a decrease of approximately $410,000 in the net cash outflow in operating activities. The
decrease in net cash used in operating activities was primarily due to a decrease of net loss of $420,000 in
the year ended March 31, 2023 as compared to the same period of 2022 and the following major working capital changes:



| | (1) | Change in accounts receivable resulted in an approximately $289,000 cash outflow for the year ended March 31, 2023 compared to an approximately $1,000 cash outflow for the same period of 2022, which led to an approximately $288,000 increase in net cash outflow in operating activities.                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                   
| | (2) | Change in accounts payable and accrued liabilities resulted in an approximately $209,000 cash inflow for the year ended March 31, 2023 compared to an approximately $10,000 cash inflow for the same period of 2022, which led to an approximately $199,000 increase in net cash inflow from operating activities.
| |     |                                                                                                                                                                                                                                                                                                                   
| | (3) | Change in due to a related party resulted in an approximately $4,000 cash inflow for the year ended March 31, 2023 compared to an approximately $19,000 cash outflow for the same period of 2022, which led to an approximately $23,000 increase in net cash inflow from operating activities.                    



| | (4) | Change in non-cash items resulted in an approximately $44,000 cash inflow for the year ended March 31, 2023 compared to an approximately $2,000 cash outflow for the same period of 2022, which led to an approximately $46,000 increase in net cash inflow from operating activities.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Investing Activities:



Net cash used in investing activities was approximately $18,000 for
the year ended March 31, 2023, which was solely attributable to acquisitions of fixed assets. Net cash used in investing activities was
approximately $3,700 for the year ended March 31, 2022, which was solely attributable to acquisitions of fixed assets.





47







Financing Activities:



Net cash generated from financing activities was
approximately $2,653,000 for the year ended March 31, 2023, which was attributable to the net results of: (i) related-party advances of
approximately $224,000; (ii) stockholder contribution of $150,000; (iii) proceeds of approximately $2,340,000 received from equity financing;
and (iv) share issuance costs of approximately $61,000 incurred for equity financing.



Net cash generated from financing activities was
approximately $436,000 for the year ended March 31, 2022, which was attributable to the net results of: (i) related-party advances of
approximately $290,000; (ii) share issuance proceeds of $200,000; (iii) share issuance costs of approximately $54,000 incurred for equity
financing.



Material Commitments



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



We
had one office lease agreement and our lease commitments as of March 31, 2023
are summarized as follows:



Operating lease



|2024                                          |  | $ | 42,172 |  
|--------------------------------------------- |  | - | ------ | -
|2025                                          |  |   | 35,143 |  
|Total future minimum lease payments           |  | $ | 77,314 |  
|Less: imputed interest                        |  |   | (3,515 | )
|Total operating lease liability               |  | $ | 73,799 |  
|Less: operating lease liability - current     |  |   | 29,393 |  
|Total operating lease liability – non current |  | $ | 44,406 |  



Critical Accounting Estimates



The preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, each as
of the date of the financial statements, and revenues and expenses during the periods presented. On an ongoing basis, management evaluates
their estimates and assumptions, and the effects of any such revisions are reflected in the financial statements in the period in which
they are determined to be necessary. Management bases their estimates on historical experience and on various other factors that they
believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets
and liabilities that are not readily apparent from other sources. Actual outcomes could differ materially from those estimates in a manner
that could have a material effect on our consolidated financial statements.



While our significant accounting policies are more
fully described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, we believe
that there were no critical accounting policies and estimates that affect the preparation of financial statements.



Off-balance Sheet Commitments and Arrangements



As of March 31, 2023, 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.



Item 7A. Quantitative and Qualitative Disclosures About Market Risk.



Not applicable.





48







Item 8. Financial Statements and Supplementary Data.



Index to the Financial Statements



|                                                                                                       | Page
|------------------------------------------------------------------------------------------------------ | ----
|Reports of Independent Registered Public Accounting Firm (PCAOB
    ID:6413)                           | F-2 
|                                                                                                       |     
|Consolidated Balance Sheets as of March 31, 2023 and 2022                                              | F-3 
|                                                                                                       |     
|Consolidated Statements of Operations for the Years Ended March 31, 2023 and 2022                      | F-4 
|                                                                                                       |     
|Consolidated Statement of Changes in Stockholders’ Deficit for the Years Ended March 31, 2023 and 2022 | F-5 
|                                                                                                       |     
|Consolidated Statements of Cash Flows for the Years Ended March 31, 2023 and 2022                      | F-6 
|                                                                                                       |     
|Notes to Consolidated Financial Statements                                                             | F-7 







F-1











REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



To the Stockholders and Board of Directors of

QDM International Inc.



Opinion on the Financial Statements



We have audited the accompanying consolidated
balance sheets of QDM International Inc. and the subsidiaries (the “Company”) as of March 31, 2023 and 2022, and the related
consolidated statements of operations and comprehensive income (loss), consolidated statements of stockholders’ deficit, and consolidated
statements of cash flows for each of the years in the two-year period ended March 31, 2023, and the related notes and schedules (collectively
referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of
the years in the two-year period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States
of America.



Basis for Opinion



These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.



Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



Critical Audit Matters



The critical audit matters communicated below
are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to
the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.



|                                                   
|---------------------------------------------------
|/s/ ZH CPA, LLC                                    
|                                                   
|We have served as the Company’s auditor since 2021.
|                                                   
|Denver, Colorado                                   
|                                                   
|June 29, 2023                                      



1600 Broadway, Suite 1600, Denver, CO, 80202, USA.
Phone: 1.303.386.7224 Fax: 1.303.386.7101 Email: admin@zhcpa.us





F-2







QDM INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2023 AND 2022



|                                                                                                                                                                                              |  | March 31,
2023 |            |   | March 31,
2022 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | -------------- | -
|                                                                                                                                                                                              |  |                |            |   |                |  
|ASSETS                                                                                                                                                                                        |  |                |            |   |                |  
|Current assets:                                                                                                                                                                               |  |                |            |   |                |  
|Cash and cash equivalents                                                                                                                                                                     |  | $              | 2,717,745  |   |                | $
|Accounts receivable                                                                                                                                                                           |  |                | 291,900    |   |                |  
|Prepaid expenses                                                                                                                                                                              |  |                | 18,856     |   |                |  
|Deferred assets                                                                                                                                                                               |  |                | —          |   |                |  
|Total current assets                                                                                                                                                                          |  |                | 3,028,501  |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Right of use assets– operating lease                                                                                                                                                          |  |                | 75,557     |   |                |  
|Long-term prepaids                                                                                                                                                                            |  |                | 27,720     |   |                |  
|Property and equipment, at cost, net                                                                                                                                                          |  |                | 18,256     |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Total assets                                                                                                                                                                                  |  | $              | 3,150,034  |   |                | $
|                                                                                                                                                                                              |  |                |            |   |                |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                         |  |                |            |   |                |  
|Current liabilities:                                                                                                                                                                          |  |                |            |   |                |  
|Accounts payable & accrued
    liabilities                                                                                                                                                    |  | $              | 222,753    |   |                | $
|Operating lease liabilities
    - current                                                                                                                                                     |  |                | 29,393     |   |                |  
|Due to related party                                                                                                                                                                          |  |                | 1,047,108  |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Total current liabilities                                                                                                                                                                     |  |                | 1,299,254  |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Operating lease liabilities – non current                                                                                                                                                     |  |                | 44,406     |   |                |  
|Total liabilities                                                                                                                                                                             |  |                | 1,343,660  |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Stockholders’ equity (deficit):                                                                                                                                                               |  |                |            |   |                |  
|Preferred
    stock, $0.0001 par value, 5,000,000 shares authorized, 545,386 and 545,386 issued and outstanding as of March 31, 2023 and 2022, respectively                                   |  |                | 54         |   |                |  
|Common stock, $0.0001 par value, 200,000,000 shares authorized, 29,156,393 and 209,993 shares issued and 29,155,920and 209,520 shares outstanding as of March 31, 2023 and 2022, respectively |  |                | 3,519      |   |                |  
|Subscription receivable                                                                                                                                                                       |  |                | (48,718    | ) |                |  
|Treasury stock, 473 and 473 shares at cost                                                                                                                                                    |  |                | (60,395    | ) |                |  
|Additional paid-in capital                                                                                                                                                                    |  |                | 11,901,231 |   |                |  
|Accumulated deficit                                                                                                                                                                           |  |                | (9,990,987 | ) |                |  
|Accumulated other comprehensive income                                                                                                                                                        |  |                | 1,670      |   |                |  
|Total stockholders’ equity (deficit)                                                                                                                                                          |  |                | 1,806,374  |   |                |  
|                                                                                                                                                                                              |  |                |            |   |                |  
|Total liabilities and stockholders’ equity                                                                                                                                                    |  | $              | 3,150,034  |   |                | $



See accompanying notes
to consolidated financial statements.



F-3







QDM INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
FOR THE YEARS ENDED MARCH 31 2023 AND 2022





|                                                     |  | For the Years Ended 
March 31, |          
|---------------------------------------------------- |  | ------------------------------ | ---------
|                                                     |  | 2023                           |          
|                                                     |  |                                |          
|Revenue                                              |  | $                              | 1,133,146
|Cost of sales                                        |  |                                | 716,751  
|Gross profit                                         |  |                                | 416,395  
|                                                     |  |                                |          
|Operating expenses                                   |  |                                |          
|General & administrative expenses                    |  | $                              | 374,142  
|Total operating expenses                             |  |                                | 374,142  
|                                                     |  |                                |          
|Income (loss) from operations                        |  |                                | 42,253   
|                                                     |  |                                |          
|Other (income) expense                               |  |                                |          
|Finance costs                                        |  |                                | 1,195    
|Other (income) expense, net                          |  |                                | (3,492   
|Total other expense (income)                         |  |                                | (2,297   
|                                                     |  |                                |          
|Income (loss) before income taxes                    |  |                                | 44,550   
|                                                     |  |                                |          
|Net income (loss)                                    |  | $                              | 44,550   
|                                                     |  |                                |          
|Other comprehensive income (loss)                    |  |                                |          
|Currency translation adjustment                      |  |                                | 337      
|Total comprehensive income (loss)                    |  | $                              | 44,887   
|                                                     |  |                                |          
|Income (loss) per common stock:                      |  |                                |          
|Basic                                                |  | $                              | 0.12     
|Diluted                                              |  | $                              | 0.12     
|                                                     |  |                                |          
|Weighted average basic & diluted shares outstanding: |  |                                |          
|Preferred stocks                                     |  |                                | 545,386  
|Common                                               |  |                                | 370,050  



See accompanying notes
to consolidated financial statements.



F-4







QDM INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE YEARS ENDED MARCH 31, 2023 AND 2022







|                                                 |  |           |          |   |        |  |            |          |  |  |           |   |  |        |     |   |          |   |       |            |  |  |              |   |  |             |            |   | Accumulated   |   |         |       | 
|------------------------------------------------ |  | --------- | -------- | - | ------ |  | ---------- | -------- |  |  | --------- | - |  | ------ | --- | - | -------- | - | ----- | ---------- |  |  | ------------ | - |  | ----------- | ---------- | - | ------------- | - | ------- | ----- | 
|                                                 |  |           |          |   |        |  |            |          |  |  | Preferred |   |  | Common |     |   |          |   |       | Additional |  |  |              |   |  |             |            |   | Other         |   |         |       | 
|                                                 |  | Preferred |          |   | Common |  |            | Treasury |  |  | Stock     |   |  | Stock  |     |   | Treasury |   |       | Paid-in    |  |  | Subscription |   |  | Accumulated |            |   | Comprehensive |   |         |       | 
|                                                 |  | Stock     |          |   | Stock  |  |            | Stock    |  |  | Amount    |   |  | Amount |     |   | Amount   |   |       | Capital    |  |  | Receivable   |   |  | Deficit     |            |   | Income        |   |         | Total | 
|                                                 |  |           |          |   |        |  |            |          |  |  |           |   |  |        |     |   |          |   |       |            |  |  |              |   |  |             |            |   |               |   |         |       | 
|Balance
    March 31, 2021                       |  |           | 913,500  |   |        |  | 56,268     |          |  |  | (473      | ) |  | $      | 91  |   |          | $ | 169   |            |  |  | (60,395      | ) |  | $           | 9,337,310  |   |               | $ | (48,718 | )     | 
|Net
    loss                                     |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | —          |   |               |   | —       |       | 
|Share
    offering costs                         |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | (94,173    | ) |               |   | —       |       | 
|Currency
    translation adjustment              |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | —          |   |               |   | —       |       | 
|Conversion
    to common stocks                  |  |           | (368,114 | ) |        |  | 134,975    |          |  |  | —         |   |  |        | (37 | ) |          |   | 405   |            |  |  | —            |   |  |             | (368       | ) |               |   | —       |       | 
|Common
    stock issued                          |  |           | —        |   |        |  | 16,708     |          |  |  | —         |   |  |        | —   |   |          |   | 50    |            |  |  | —            |   |  |             | 200,257    |   |               |   | —       |       | 
|Forgiveness
    of shareholder advances          |  |           |          |   |        |  |            |          |  |  |           |   |  |        |     |   |          |   |       |            |  |  |              |   |  |             | 25,641     |   |               |   |         |       | 
|Share
    issuance due to reverse-split round up |  |           | —        |   |        |  | 2,042      |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | —          |   |               |   | —       |       | 
|Balance
    March 31, 2022                       |  |           | 545,386  |   |        |  | 209,993    |          |  |  | (473      | ) |  | $      | 54  |   |          | $ | 624   |            |  |  | (60,395      | ) |  | $           | 9,468,667  |   |               | $ | (48,718 | )     | 
|Net
    income                                   |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | —          |   |               |   | —       |       | 
|Investment
    from stockholder                  |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | 150,000    |   |               |   | —       |       | 
|Currency
    translation adjustment              |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | —          |   |               |   | —       |       | 
|Share
    issuance                               |  |           | —        |   |        |  | 28,910,400 |          |  |  | —         |   |  |        | —   |   |          |   | 2,891 |            |  |  | —            |   |  |             | 2,337,046  |   |               |   | —       |       | 
|Share
    offering costs                         |  |           | —        |   |        |  | —          |          |  |  | —         |   |  |        | —   |   |          |   | —     |            |  |  | —            |   |  |             | (90,478    | ) |               |   | —       |       | 
|Share-based
    payment                          |  |           | —        |   |        |  | 36,000     |          |  |  | —         |   |  |        | —   |   |          |   | 4     |            |  |  | —            |   |  |             | 35,996     |   |               |   | —       |       | 
|Balance
    March 31, 2023                       |  |           | 545,386  |   |        |  | 29,156,393 |          |  |  | (473      | ) |  | $      | 54  |   |          | $ | 3,519 |            |  |  | (60,395      | ) |  | $           | 11,901,231 |   |               | $ | (48,718 | )     | 



See accompanying notes
to consolidated financial statements.



F-5







QDM INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2023 AND 2022



|                                                                            |  | March 31,
2023 |           |   | March 31,
2022 |  
|--------------------------------------------------------------------------- |  | -------------- | --------- | - | -------------- | -
|                                                                            |  |                |           |   |                |  
|Cash flows from operating activities:                                       |  |                |           |   |                |  
|Net income (loss)                                                           |  | $              | 44,550    |   |                | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                |           |   |                |  
|Depreciation                                                                |  |                | 8,075     |   |                |  
|Share-based payment expense                                                 |  |                | 36,000    |   |                |  
|Non-cash lease expenses                                                     |  |                | —         |   |                |  
|Changes in working capital:                                                 |  |                |           |   |                |  
|Accounts receivable & other receivable                                      |  |                | (289,426  | ) |                |  
|Prepaid expenses                                                            |  |                | —         |   |                |  
|Long-term prepaid expenses                                                  |  |                | —         |   |                |  
|Accounts payable & accrued liabilities                                      |  |                | 208,374   |   |                |  
|Due to a related party                                                      |  |                | 4,240     |   |                |  
|Net cash provided by (used in) operating activities                         |  |                | 11,813    |   |                |  
|                                                                            |  |                |           |   |                |  
|Cash flows from investing activities:                                       |  |                |           |   |                |  
|Purchase of property and equipment                                          |  |                | (17,503   | ) |                |  
|Net cash used in investing activities                                       |  |                | (17,503   | ) |                |  
|                                                                            |  |                |           |   |                |  
|Cash flows from financing activities:                                       |  |                |           |   |                |  
|Proceeds borrowed from related parties                                      |  |                | 223,972   |   |                |  
|Share issuance proceeds                                                     |  |                | 2,339,937 |   |                |  
|Issuance costs related to equity financing                                  |  |                | (60,478   | ) |                |  
|Contribution from stockholders                                              |  |                | 150,000   |   |                |  
|Net cash provided by financing activities                                   |  |                | 2,653,431 |   |                |  
|                                                                            |  |                |           |   |                |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                     |  |                | 346       |   |                |  
|NET INCREASE (DECREASE) IN CASH                                             |  |                | 2,648,087 |   |                |  
|CASH, BEGINNING OF PERIOD                                                   |  | $              | 69,658    |   |                | $
|CASH, END OF PERIOD                                                         |  |                | 2,717,745 |   |                |  
|                                                                            |  |                |           |   |                |  
|SUPPLEMENTAL DISCLOSURES:                                                   |  |                |           |   |                |  
|Non-cash transaction                                                        |  |                |           |   |                |  
|Debt forgiveness by shareholder                                             |  | $              | —         |   |                | $
|Cash paid for interest                                                      |  | $              | —         |   |                | $
|Cash paid for income taxes                                                  |  | $              | —         |   |                | $



See accompanying notes to consolidated financial
statements.



F-6







QDM International Inc.

Notes to Consolidated Financial Statements



1. Organization and principal activities



QDM International Inc. (“QDM,” and
collectively with its subsidiaries, the “Company”) was incorporated in Florida in March 2020 and is the successor to 24/7
Kid Doc, Inc. (“24/7 Kid”), which was incorporated in Florida in November 1998. The Company conducts its business through
an indirectly wholly owned subsidiary, YeeTah Insurance Consultant Limited, which changed its name to Hong Kong YeeTah Insurance Broker
Limited (“YeeTah”) in December 2022, a licensed insurance brokerage company located in Hong Kong, China. YeeTah sells a wide
range of insurance products, consisting of two major categories: (1) life and medical insurance, such as individual life insurance; and
(2) general insurance, such as automobile insurance, commercial property insurance, liability insurance, homeowner insurance. In addition,
as a Mandatory Provident Fund (“MPF”) Intermediary, YeeTah also assists its customers with their investment through the MPF
and the Occupational Retirement Schemes Ordinance schemes (“ORSO”) in Hong Kong, both of which are retirement protection schemes
set up for employees.



On October 21, 2020, the Company entered into
a share exchange agreement (the “Share Exchange Agreement”) with QDM Holdings Limited, a BVI company (“QDM BVI”),
and Huihe Zheng, the sole shareholder of QDM BVI (the “QDM BVI Shareholder”), who is also the Company’s principal stockholder,
Chairman and Chief Executive Officer, to acquire all the issued and outstanding capital stock of QDM BVI in exchange for the issuance
to the QDM BVI Shareholder 30,000 shares (900,000 shares before the Reverse Split (as defined below)) of a newly designated Series C Convertible
Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”), with each Series C Preferred Stock initially
being convertible into 11 shares of the Company’s common stock, par value $0.0001 per share, subject to certain adjustments and
limitations (the “Share Exchange”). The Share Exchange closed on October 21, 2020.



As a result of the consummation of the Share Exchange,
the Company acquired all the issued and outstanding capital stock of QDM BVI and its subsidiaries, QDM Group Limited, a Hong Kong corporation
and wholly owned subsidiary of QDM BVI (“QDM HK”) and YeeTah.



The Company was a shell company prior to the reverse
acquisition which occurred as a result of the consummation of the transaction contemplated by the Share Exchange Agreement, and QDM BVI
was a private operating company. The reverse acquisition by a non-operating public shell company of a private operating company typically
results in the owners and management of the private company having actual or effective voting and operating control of the combined company.
Therefore, the reverse acquisition is considered a capital transaction in substance. In other words, the transaction is a reverse recapitalization,
equivalent to the issuance of stock by the private company for the net monetary assets of the shell company accompanied by a recapitalization.
Therefore, the acquisition was accounted for as a recapitalization and QDM BVI is considered the acquirer for accounting and financial
reporting purposes. The assets and liabilities of QDM BVI have been brought forward at their book value and no goodwill has been recognized.



Accordingly, the reverse acquisition has been
treated as a corporate restructuring (reorganization) of entities under common control and thus the current capital structures of QDM
BVI and its wholly-owned subsidiary QDM HK and its wholly-owned subsidiary, YeeTah, have been retrospectively presented in prior periods
as if such structures existed at that time and in accordance with ASC 805-50-45-5.



As a result of the Share Exchange, the Company
ceased to be a shell company.





F-7







On November 3,
2021, the Company acquired 100% of the issued and outstanding shares of QDMI Software Group Limited (“QDMS”), a
company incorporated on February 6, 2020 in Cyprus. The Company acquired QDMS through an intermediary holding company, Lutter Global
Limited (“LGL”), which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole
shareholder of QDMS. As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000 in
November 2021 and at the same time the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to the Company for a
consideration of USD$1.00. As a result, the Company acquired a 100% ownership of LGL, which, in turn, owns 100% of QDMS.
Accordingly, the acquisition has been treated as a corporate restructuring (reorganization) of entities under common control and
thus the current capital structures of QDMS and LGL have been retrospectively presented in prior periods as if such structures
existed at that time and in accordance with ASC 805-50-45-5.





2. Summary of significant accounting policies



Basis of Presentation



The Company’s consolidated financial statements
have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).





F-8







Use of Estimates



The preparation of the Company’s consolidated
financial statements in conformity with the U.S. GAAP requires the Company to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported
amounts of revenues and expenses may be affected by the estimates that management is required to make. Actual results could differ from
those estimates.



Foreign Currency and Foreign Currency Translation



The Company’s reporting currency is the
United States Dollar (“US$” or “$”). The Company’s operations are principally conducted in Hong Kong where
Hong Kong dollar is the functional currency. The functional currency of the Company’s two subsidiaries, Lutter Global Limited and
QDMI Software Group Limited, is the Euro.



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 sheet date. The resulting exchange differences are reported in the statements of operations
and comprehensive loss.



The exchanges rates 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 Company’s balance sheets, income statement items and cash flow items for both the years ended March 31, 2023 and 2022.



The exchanges rates used for translation from
Euro to US$ are as follows:



|                          |  |  | March 31, 
2023   |  |  |  | March
31, 
2022   | 
|------------------------- |  |  | ----------------- |  |  |  | ----------------- | 
|Year-end spot rate        |  |  | EUR 1 = US$1.0872 |  |  |  | EUR 1 = US$1.1093 | 
|Average rate for the year |  |  | EUR 1 = US$1.0414 |  |  |  | EUR 1 = US$1.1627 | 



Certain Risks and Concentration



The Company’s financial instruments that
potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and receivables,
and other assets. As of March 31, 2023, substantially all of the Company’s cash and cash equivalents were held in major financial
institutions located in Hong Kong, which management considers to being of high credit quality.



During the year ended March 31, 2023, the largest customer accounted
for 91% of the Company’s total revenue. During the year ended March 31, 2022, the two largest customers in aggregate accounted for
81% of the Company’s total revenue.



During the year ended March 31, 2023, the largest supplier (sub-broker)
accounted for 93% of the Company’s total costs of sale. During the year ended March 31, 2022, the largest supplier (sub-broker)
accounted for totally 99% of the Company’s total costs of sale.



Cash and Cash Equivalents



Cash and cash equivalents consist of petty cash
on hand and cash held in banks, which are highly liquid and have original maturities of three months or less and are unrestricted as to
withdrawal or use.



Accounts Receivable



Accounts receivable represents trade receivable
and are recognized initially at fair value and subsequently adjusted for any allowance for doubtful accounts and impairment.





F-9







The Company makes impairment loss for bad and
doubtful debts based on assessments of the recoverability of the trade and other receivables based on individual account analysis, including
the current creditworthiness and the past collection history of each debtor. Impairments arise when there is an objective evidence indicate
that the balances may not be collectible. The identification of bad and doubtful debts, in particular of a loss event, requires the use
of judgment and estimates, which involve the estimates of specific losses on individual exposures, as well as a provision on historical
trends of collections. Based on management of customers’ credit and ongoing relationship, management makes conclusions whether any
balances outstanding at the end of the period will be deemed uncollectible on an individual basis and on aging analysis basis. The provision
is recorded against accounts receivables balances, with a corresponding charge recorded in the statements of operations and comprehensive
loss. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the
likelihood of collection is not probable.



The Company historically did not have material
bad debts in accounts receivable. There were no bad debt expenses for the years ended March 31, 2023 and 2022 and there was no provision
for doubtful accounts as of March 31, 2023 and 2022.



Revenue Recognition



The Company generates revenue primarily by providing
insurance brokerage services in Hong Kong. The Company sells insurance products underwritten by insurance companies operating in Hong
Kong to its individual customers and is compensated for its services by commissions paid by insurance companies, typically based on a
percentage of the premium paid by the insured.



ASC 606 provides for a five-step model for recognizing
revenue from contracts with customers. These five steps include:



| | (i)   | Identify the contract           
| | ----- | --------------------------------
| |       |                                 
| | (ii)  | Identify performance obligations
| |       |                                 
| | (iii) | Determine transaction price     
| |       |                                 
| | (iv)  | Allocate transaction price      
| |       |                                 
| | (v)   | Recognize revenue               



The Company enters into insurance brokerage contracts
with customers (insurance companies). Performance obligation for these insurance brokerage contracts is to help insurance company customers
to promote, coordinate and complete subscriptions of insurance policies offered by customers.



Under ASC 606, revenue is recognized when the
customer obtains control of a good or service. A customer obtains control of a good or service if it has the ability to direct the use
of and obtain substantially all of the remaining benefits from that good or service. The transfer of control of the Company’s brokerage
services generally occurs at a point in time on the effective date of the associated insurance contract when the policy transfers to the
customer. The insurance policy entered between the insurance company and the insured customer generally contains a cool-off period of
one to two months. When the cool-off period elapses and the insured customer does not withdraw from the insurance policy, the policy becomes
effective. Once the transfer of control of a service occurs, the Company has satisfied its insurance brokerage performance obligation
and recognizes revenue.





F-10







Fair Value Measurement



Fair value is the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers
the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when
pricing the asset or liability.



The established fair value hierarchy requires
an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair
value measurement. The three levels of inputs that may be used to measure fair value as follows:



| | 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.



The
Company’s financial instruments include cash and cash equivalents, accounts receivable, due from related parties, accounts
payable and accrued liabilities, lease liabilities and due to related party. The carrying amounts of these financial instruments
approximate their fair values due to the short-term nature of these instruments.



The Company noted no transfers between levels
during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring
basis as of March 31, 2023.



Property
and Equipment



Property
and equipment are recorded at cost, less accumulated depreciation and impairment. Depreciation of property and equipment is calculated
on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated annual deprecation
rate of these assets are generally as follows:



|Category               |  | Depreciation
 rate               |  | Estimated
residual
value
|---------------------- |  | -------------------------------- |  | ------------------------
|Office equipment       |  | 3 years                          |  | Nil                     
|Leasehold improvements |  | Shorter of lease term or 3 years |  | Nil                     



Expenditures
for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and
carrying amount of the relevant assets and are recognized in the statements of operations and comprehensive loss.



Impairment of Long-Lived
Assets



The Company
evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows
attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which
the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets.



There were no impairment
losses for the years ended March 31, 2023 and 2022.





F-11







Leases



Arrangements meeting the definition of a lease
are classified as operating or finance leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease
liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s
incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset
is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset
result in straight-line rent expense over the lease term.



In calculating the right of use asset and lease
liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases
having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line
basis over the lease term.



Taxation



Current income taxes are provided on the basis
of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income
tax purposes, in accordance with the regulations of the relevant tax jurisdictions.



Deferred income taxes are recognized for
temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, net
operating loss carryforwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income
taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured
using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The
effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operations and comprehensive
income in the period of the enactment of the change.



The Company considers positive and negative evidence
when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers,
among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration
of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate
realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward
periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization
of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing
taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future
taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected
within the industry.



The Company recognizes a tax benefit associated
with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination
by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently
measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate
settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically due
to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments
are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of
changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company
classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense.





F-12







Stock-Based Compensation



The Company recognizes stock-based compensation
in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting from all share-based transactions be recorded
in the financial statements. It establishes fair value as the measurement objective in accounting for share-based payment arrangements
and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. ASC
718 also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees
in share-based payment transactions.



Earnings per share



Basic earnings per share is computed by dividing
net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period
using the two-class method. Under the two-class method, net income is allocated between shares of common stock and other participating
securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual
terms they are not obligated to share in the losses. Diluted earnings per share is calculated by dividing net income attributable to holders
of common stock by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent
shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.



Recently Issued Accounting Standards



The Company has reviewed all the recent accounting
pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have
a material impact on the Company.



3. Deferred Asset



Deferred assets of $30,000 as of March 31, 2022
represented professional service fees incurred for equity financing. The amounts was charged against share capital for equity financing
completed in March 2023 (Note 4).



4. Equity



Reverse Stock Split



On August 10, 2021, the
Company effected a reverse stock split of its common stock, without changing the par value per share, whereby each 30 issued
and outstanding shares of common stock were consolidated into one share of common stock (the “Reverse Split”).



Yeetah is a registered insurance brokerage in
Hong Kong and subject to certain Hong Kong insurance broker requirements regarding its share capital and net assets. As per the requirements,
a licensed insurance broker company must at all times maintain a paid-up share capital of not less than USD64,103 (HK$500,000) and net
assets of not less than USD64,103 (HK$500,000), subject to certain transitional arrangements, pursuant which, the Company is required
to maintain the amount of paid-up share capital and net assets of (i) not less than USD12,821 (HK$100,000) for the period from September
23, 2019 to December 31, 2021 and (ii) not less than USD38,462 (HK$300,000) for the period from January 1, 2022 to December 31, 2023.
Yeetah was in compliance with the requirements as of March 31, 2023.



Common Stock



In April 2021, the Company consummated a closing
of a “best efforts” self-underwritten public offering of its common stock, par value $0.0001 per share (the “2021 Offering”),
in which the Company issued and sold an aggregate of 16,708 shares (501,250 shares before the Reverse Split) of its common stock at a
price of $12 per share ($0.40 before the Reverse Split) to certain investors, generating gross proceeds to the Company of $200,307. Share
offering costs of $94,173 were offset against the share capital in relation to the 2021 Offering.



In
March, 2023, the Company consummated a closing of a public offering of its common stock, par value $0.0001 per share (the “2023
Offering”), in which the Company issued and sold an aggregate of 28,910,400 shares of its common stock at a price of $0.081 per
share to certain investors, generating gross proceeds to the Company of $2,339,937. Share offering costs of $90,478 were
offset against the share capital in relation to the 2023 Offering.



In
March, 2023, the Company also granted 36,000 shares to certain executives and directors of the Company for their services rendered. The
fair value of the shares granted is $36,000 determined by using the trading price on
the grant date and the amount is recognized as shared-based payment expense for the year ended March 31, 2023.



There were no treasury stock transactions during
the years ended March 31, 2023 and 2022.





F-13









Additional paid-in-capital



During the year ended March 31, 2022, Mr. Zheng,
the Company’s principal stockholder, Chairman and Chief Executive Officer, forgave $25,641 related party balance due from YeeTah,
which is treated as a capital transaction.



On July 22, 2022, Huihe Zheng invested additional
share capital of $150,000 (HKD$1,170,000) into Company’s subsidiary, YeeTah. The additional contribution was recorded into additional
paid-in-capital.



Preferred Stock



On May 17, 2021, upon receipt of a conversion
notice from Huihe Zheng, the Company issued 134,976 shares (4,049,254 shares before the Reverse Split) of the Company’s common stock
upon conversion of an aggregate of 368,114 shares of Series C Preferred Stock, par value $0.0001 per share, at a conversion ratio of 30
for 11 (1-for-11 before the Reverse Split), pursuant to the terms of the Certification of Designation for the Series C Preferred Stock.



5. Related Party Transaction



Related Parties



|Name of related parties                               |  | Relationship with the Company                                             
|----------------------------------------------------- |  | --------------------------------------------------------------------------
|Siu Ping Lo                                           |  | Responsible officer of YeeTah                                             
|Huihe Zheng                                           |  | Principal stockholder, Chief Executive Officer and Chairman of the Company
|YeeTah Financial Group Co., Ltd. (“YeeTah Financial”) |  | A company controlled by Siu Ping Lo                                       
|Ouya Properties Group Ltd. (“OPG”)                    |  | A company controlled by Huihe Zheng                                       
|Tim Shannon                                           |  | Chief Financial Officer                                                   



F-14







Related Party Transactions



| | (i)   | During the year ended March 31, 2023, YeeTah Financial charged YeeTah US$43,586 (2022: US$67,878) commission expenses in relation to insurance referral services rendered by YeeTah Financial.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                               
| | (ii)  | During the year ended March 31, 2023, Huihe Zheng advanced
                                    US$220,350 (2022: US$289,556) to the Company to support its operations.                        
| |       |                                                                                                                                                                                               
| | (iii) | During the year ended March 31, 2023, OPG advanced US$3,202 (2022: US$ nil) to the Company to support its operations.                                                                         



Due to Related Party Balance



The Company’s due to related party balance
is as follows:



|                 |  | March 31, 2023 |           |  | March 31, 2022 | 
|---------------- |  | -------------- | --------- |  | -------------- | 
|                 |  | US$            |           |  | US$            | 
|Huihe Zheng      |  |                | 1,035,730 |  |                | 
|OPG              |  |                | 3,202     |  |                | 
|YeeTah Financial |  |                | 8,176     |  |                | 
|Total            |  |                | 1,047,108 |  |                | 



The due to related party balance is unsecured,
interest-free and due on demand.



Subscription Receivable Due from a Stockholder



The Company’s subscription receivable due
from a stockholder balance is as follows:



|            |  | March 31, 2023 |        |  | March 31, 2022 | 
|----------- |  | -------------- | ------ |  | -------------- | 
|            |  | US$            |        |  | US$            | 
|Huihe Zheng |  |                | 48,718 |  |                | 



The due from stockholder balances represent the
purchase price for shares of QDM BVI to be paid by Mr. Huihe Zheng. These due from stockholder balances at of the balance sheet dates
were unsecured, interest-free and due on demand.





F-15







6. Income Taxes



Hong Kong



Under the current Hong Kong Inland Revenue Ordinance,
the Company’s Hong Kong subsidiaries are subject to a 16.5% income tax on their taxable income generated from operations in Hong
Kong. On December 29, 2017, Hong Kong government announced a two-tiered profit tax rate regime. Under the two-tiered tax rate regime,
the first HK$2.0 million assessable profits will be subject to a lower tax rate of 8.25% and the excessive taxable income will continue
to be taxed at the existing 16.5% tax rate. The two-tiered tax regime becomes effective from the assessment year of 2018/2019, which was
on or after April 1, 2018. The application of the two-tiered rates is restricted to only one nominated enterprise among connected entities.



BVI



Under the current laws of the BVI, the Company
is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no BVI withholding tax
will be imposed.



Cyprus



Under the current laws of the Cyprus, the Company’s
Cyprus subsidiary is subject to a standard income tax rate of 12.5% on income accrued or derived from all sources in Cyprus and abroad.



US



Under the current Florida state and US federal
income tax, the Company does not need to pay income taxes as Florida state does not levy income tax. The federal income tax is based on
a flat rate of 21% for the calendar year of 2023 (2022: 21%).



Reconciliation of the differences between statutory tax rate
and the effective tax rate



The Company operates in serval tax jurisdictions. Therefore, its income
is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted from applying the US
statutory income tax rates to the Company’s pre-tax income as follows:



|                                                          |  | March 31,  2023 |         |   | March 31,  2022 | 
|--------------------------------------------------------- |  | --------------- | ------- | - | --------------- | 
|                                                          |  | US$             |         |   | US$             | 
|Income before income tax expenses                         |  |                 | 44,550  |   |                 | 
|US federal statutory income tax rate                      |  |                 | 21      | % |                 | 
|Income tax calculated at statutory rate                   |  |                 | 9,356   |   |                 | 
|(Increase) decrease in income tax expense resulting from: |  |                 |         |   |                 | 
|Rate differences in various jurisdictions                 |  |                 | (32,862 | ) |                 | 
|Non-deductible expenses                                   |  |                 | 7,560   |   |                 | 
|Change in unrecognized tax benefits                       |  |                 | 37,722  |   |                 | 
|Tax loss utilized                                         |  |                 | (21,776 | ) |                 | 
|Income tax expense/Effective tax rate                     |  |                 | —       |   |                 | 



As of March 31, 2023 and 2022, there was net operating
loss (“NOL”) carryforward of $106,555 and $89,469 respectively and they can be carried forward indefinitely. A fully valuation
allowance has been provided to these NOLs as of March 31, 2023 and 2022 as the Company did not believe these NOLs will more likely than
not be realized in foreseeable future.



Uncertain tax positions



The Company evaluates each uncertain tax position
(including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated
with the tax positions. As of March 31, 2023, the Company did not have any significant unrecognized uncertain tax positions.



7. Commitments and Contingencies



Other than an office lease with a lease term of 3 years that the Company
entered into in February 2022 as below, the Company did not have significant commitments, long-term obligations, or guarantees as of March
31, 2023 and 2022.





F-16







Operating lease



The weighted average remaining lease term
of the operating lease is 1.9 years and discount rate used for the operating lease is 4.9%.



During the years ended March 31, 2023 and
2022, the operating lease expense recognized was $42,172 and $5,271 respectively.





|2024                                          |  | $ | 42,172 |  
|--------------------------------------------- |  | - | ------ | -
|2025                                          |  |   | 35,143 |  
|Total future minimum lease payments           |  | $ | 77,315 |  
|Less: imputed interest                        |  |   | (3,516 | )
|Total operating lease liability               |  | $ | 73,799 |  
|Less: operating lease liability - current     |  |   | 29,393 |  
|Total operating lease liability – non current |  | $ | 44,406 |  



Contingencies



The Company is subject to legal proceedings and
regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company
does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our business, financial
position, cash flows or results of operations taken as a whole. As of March 31, 2023, the Company is not a party to any material legal
or administrative proceedings.



8. Subsequent Events



In accordance with ASC 855-10, the Company has
analyzed its operations subsequent to March 31, 2023 through the date of issuance of the financial statements and has determined that
it does not have any other material subsequent events to disclose in these financial statements.



F-17







Item 9. Changes
In and Disagreements with Accountants on Accounting and Financial Disclosure.



None.



Item 9A Controls and Procedures



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
(collectively, the “Certifying Officers”) or persons performing similar functions, as appropriate, to allow timely decisions
regarding required disclosure.



Under the supervision of our Certifying Officers,
we evaluated the effectiveness of the design and operation 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 the end of the period covered by this Report due to the material weakness in our internal control over financial
reporting discussed below.



Management’s Report on Internal Controls over Financial Reporting



Management is responsible for establishing and
maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial
reporting, as required by Section 404 of the Sarbanes-Oxley Act. In making this assessment, management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A
material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented
or detected on a timely basis. We have identified the following material weaknesses, which are indicative of many small companies with
small staff, as of March 31, 2023: (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.



Because of these material weaknesses, management
has concluded that we did not maintain effective internal control over financial reporting as of March 31, 2023, based on the criteria
established in “2013 Internal Control-Integrated Framework” issued by COSO.



The Company will plan to design and implement
the internal control procedures commensurate to the size of the Company to remediate the above three areas of material weaknesses when
resources are available.



This Report does not include an attestation report
of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was
not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only
management’s report.



Changes in Internal Control over Financial Reporting



There were no changes in our internal control
over financial reporting during the fiscal quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.



Item 9B. Other Information



None.



Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections



Not applicable.





49







PART III





Item 10. Directors, Executive Officers and Corporate Governance.



The following tables set forth the respective
positions and ages of the directors and executive officers of the Company as of the date of this Report. Each director of the Company
has been elected to hold office until the next annual meeting of stockholders and thereafter until his or her successor is elected and
has qualified.



|Name          |  | Age |  | Positions                                                    | 
|------------- |  | --- |  | ------------------------------------------------------------ | 
|Huihe Zheng   |  | 42  |  | Chairman of the Board, Chief Executive Officer and President | 
|Tim Shannon   |  | 61  |  | Chief Financial Officer and director                         | 
|Timothy Miles |  | 76  |  | Director                                                     | 
|Huili Shen    |  | 40  |  | Secretary and director                                       | 



Biographical Information



Huihe Zheng has more than twenty
years of experience in investment and wealth management. Mr. Zheng has served as President, Treasurer and Secretary of Sleepaid Holding
Co., a company incorporated in Nevada since March 2020, a director of the company since March 2019 and is a principal stockholder of the
company. Mr. Zheng has also served as Chairman of Shanghai Dingchan Industrial Co., Ltd., a company primarily engaged in wholesale and
distribution of computer equipment and components since he founded the company in November 2013. Mr. Zheng has served as Chief Executive
Officer and Chairman of Shanghai Hewu Investment Management Co., Ltd., an investment company, since he founded the company in January
2016. Mr. Zheng has also served as a director, Chief Executive Officer and President of 24/7 Kid, the Company’s wholly owned subsidiary
since March 2020. From 1999 to 2016, Mr. Zheng primarily focused on securities trading in stock markets in China and abroad for his own
account. We believe Mr. Zheng’s experience in business management, investment and capital market qualifies him to serve on our board
of directors.



Tim Shannon has served as the Chief
Financial Officer of 24/7 Kid, the wholly owned subsidiary of the Company, since June 2005 and director of 24/7 Kid from inception until
May 2020. Mr. Shannon served as President and Chief Executive Officer of 24/7 Kid from November 1998 until March 2020. From 1990 to 1994,
Mr. Shannon was an investment advisor with Great Western Securities and Hearn Financial Services in Orlando, Florida. In 1995, he co-founded
Shannon/Rosenbloom Marketing, a marketing and investor relations company, with Brian Rosenbloom, a former director of 24/7 Kid and served
as its Vice President July 1995 until November 1998. Mr. Shannon spent six years as a system engineer and marketing representative with
IBM after graduating in 1983 from the University of South Florida’s Engineering College with a bachelor’s degree in Computer
Science.



Timothy Miles has been the president
and owner of Happiness Now Hypnosis, a hypnotherapy company, since 2016. Mr. Miles has also served as a director of 24/7 Kid since January
2020. From 1999 through 2016, Mr. Miles was the president of Littlepond Enterprises, Inc., a business consulting firm. Mr. Miles attended
the University of California at Davis, but did not receive a degree. We believe Mr. Miles’ decades’ experience in business
management and consulting qualifies him to serve on our board of directors.



Huili Shen has served as the
managing graphic designer at Ctrip Travel Network Technology Co., Ltd., a travel services company, since November 2010. From May
2006 to October 2010, Ms. Shen was an assistant graphic designer at Huiguang Technology Co., Ltd, a software company. Ms. Shen
worked as a graphic designer at Haotian Technology Shanghai Co., Ltd., a software company, from September 2003 to April 2006. Ms.
Shen graduated from Sanda University with a bachelor’s degree in graphic design. We believe Ms. Shen’s experience in
management qualified her to serve on our board of directors.





50







Director Independence



We are not currently listed on a national stock
exchange and not required to maintain a majority of independent directors. However, we believe that Timothy Miles qualifies as an independent
director as defined under the rules of the OTCQB Marketplace.



Family Relationships



There are no family relationships among our directors
and executive officers.



The Board and Committees



We do not have any independent directors. We are
not required to maintain a majority of independent directors or the foregoing committees under the rules applicable to companies that
do not have securities listed or quoted on a national securities exchange. Our board of directors does not maintain a separate audit,
nominating, or compensation committee. Functions customarily performed by such committees are performed by our board of directors as a
whole.



Involvement in Certain Legal Proceedings



None of our directors and executive officers have
been involved in any of the following events during the past ten years:



| | ● | any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;                                                                                                                                                                                                                                                   
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | being subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.                                                                                                                                                 



Code of Conduct and Ethics



We currently do not have a Code of Ethics and
plan to adopt one as we develop our business.





51







Section 16 Compliance



Section 16(a) of the Securities Exchange Act of
1934, as amended, requires the Company’s officers, directors and persons who beneficially own more than ten percent of its common
stock to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on our review of such forms furnished to us, we believe that all reports
applicable to our executive officers, directors and greater than ten percent beneficial owners were filed in a timely manner in accordance
with Section 16(a) of the Exchange Act except that each of Messrs. Zheng and Miles was late for filing a Form 4.



Item 11. Executive Compensation.



The following table sets forth the cash and non-cash
compensation awarded to or earned by each individual who served as the executive officer during the fiscal years ended March 31, 2023
and 2022.



Summary of Executive Compensation Table



|Name and Principal Position          |  |  | Year |  |  | Salary ($) |   |  | Stock Awards ($) |  |       | Option Awards ($) |  |  | Nonqualified Deferred Compensation Earnings ($) |  |  | All Other Compensation ($) |   |  | Total ($) | 
|------------------------------------ |  |  | ---- |  |  | ---------- | - |  | ---------------- |  | ----- | ----------------- |  |  | ----------------------------------------------- |  |  | -------------------------- | - |  | --------- | 
|Huihe Zheng                          |  |  | 2023 |  |  |            | — |  |                  |  | —     |                   |  |  | —                                               |  |  |                            | — |  |           | 
|Chief Executive Officer and Chairman |  |  | 2022 |  |  |            | — |  |                  |  | —     |                   |  |  | —                                               |  |  |                            | — |  |           | 
|                                     |  |  |      |  |  |            |   |  |                  |  |       |                   |  |  |                                                 |  |  |                            |   |  |           | 
|Tim Shannon (1)                      |  |  | 2023 |  |  |            | — |  |                  |  | 8,000 |                   |  |  | —                                               |  |  |                            | — |  |           | 
|Chief Financial Officer and director |  |  | 2022 |  |  |            | — |  |                  |  | —     |                   |  |  | —                                               |  |  |                            | — |  |           | 



|(1) | Mr. Shannon received additional compensation for his services as a director. See “- Director Compensation.”
|--- | -----------------------------------------------------------------------------------------------------------



Outstanding Equity Awards at Fiscal Year End



None.



Employment Agreements



We presently do not have any employment agreements
or other compensation arrangements with our executive officers.



Director Compensation



Directors received no stock compensation in the
fiscal year ended March 31, 2023.



On April 12, 2021, the Board of Directors approved an annual cash compensation
of $6,000 to each of Tim Shannon, the Chief Financial Officer of the Company and Timothy Miles, a director of the Company to retain their
services. The annual cash compensation of Mr. Shannon and Mr. Miles is paid on a quarterly basis in advance, commencing on April 1, 2021.
During the fiscal year ended March 31, 2023, each of Mr. Miles and Shannon was paid a cash fee of $ 6,000.





52







Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.



The following table sets forth certain information known to us with
respect to the beneficial ownership of common stock by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the
Exchange Act) known to us to be the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each of our directors
and executive officers, and (iii) all of our directors and executive officers as a group. The percentage of class is based on 29,156,393
shares of common stock issued and outstanding as of the date of this Report.





|Name of Beneficial Owner 5% Stockholders             |  | Number of Shares of Common Stock Owned |            |  | Percentage of Shares of Common Stock Owned |  |      | Number of Shares of Series B Preferred Stock Owned |  |  | Percentage of Shares of Series B Preferred Stock Owned |  |  | Number of Shares of Series C Preferred Stock Owned |     |   | Percentage of Shares of Series C Preferred Stock Owned |  |         | Percentage of Aggregate Voting Power |  | 
|---------------------------------------------------- |  | -------------------------------------- | ---------- |  | ------------------------------------------ |  | ---- | -------------------------------------------------- |  |  | ------------------------------------------------------ |  |  | -------------------------------------------------- | --- | - | ------------------------------------------------------ |  | ------- | ------------------------------------ |  | 
|HW FUND(3)                                           |  |                                        | 12,000,000 |  |                                            |  | 41.2 | %                                                  |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|                                                     |  |                                        |            |  |                                            |  |      |                                                    |  |  |                                                        |  |  |                                                    |     |   |                                                        |  |         |                                      |  | 
|Willington Capital Limited(4)                        |  |                                        | 5,000,000  |  |                                            |  | 17.2 | %                                                  |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|Ruiyin Capital Limited(5)                            |  |                                        | 4,800,000  |  |                                            |  | 16.5 | %                                                  |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|                                                     |  |                                        |            |  |                                            |  |      |                                                    |  |  |                                                        |  |  |                                                    |     |   |                                                        |  |         |                                      |  | 
|Bakelai Capital Limited(6)                           |  |                                        | 5,000,000  |  |                                            |  | 17.2 | %                                                  |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|Directors and Officers                               |  |                                        |            |  |                                            |  |      |                                                    |  |  |                                                        |  |  |                                                    |     |   |                                                        |  |         |                                      |  | 
|Huihe Zheng(3)                                       |  |                                        | 12,158,810 |  |                                            |  | 41.7 | %                                                  |  |  | 13,500                                                 |  |  |                                                    | 100 | % |                                                        |  | 531,886 |                                      |  | 
|Tim Shannon(7)                                       |  |                                        | 8,000      |  |                                            |  | *    |                                                    |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|Huili Shen(4)                                        |  |                                        | 5,000,167  |  |                                            |  | 17.1 | %                                                  |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|Timothy Miles(8)                                     |  |                                        | 8,000      |  |                                            |  | *    |                                                    |  |  | —                                                      |  |  |                                                    | —   |   |                                                        |  | —       |                                      |  | 
|All officers and directors as a group (four persons) |  |                                        | 17,326,317 |  |                                            |  | 59.4 | %                                                  |  |  | 13,500                                                 |  |  |                                                    | 100 | % |                                                        |  | 531,886 |                                      |  | 



| | * | Less than one percent.
| | - | ----------------------



|(1) | Each share of Series B Preferred Stock entitles the holder to 100 votes on all corporate matters submitted for stockholder approval.
|--- | ------------------------------------------------------------------------------------------------------------------------------------



|(2) | Each share of Series C Preferred Stock entitles the holder to 11 votes initially on all corporate matters submitted for stockholder approval.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------



|(3) | 12,000,000 shares of common stock directly held by HW FUND,
of which Huihe Zheng, our Chief Executive Officer and President, is the controlling shareholder and holds the voting and dispositive
power over the shares of common stock held by such entity. The address for this stockholder is Vistra (Cayman) Limited, P.O. Box 31119,
Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | 5,000,000 shares of common stock directly held by Willington
Capital Limited, of which Huili Shen, our director, is the sole shareholder and director and holds the voting and dispositive power over
the shares of common stock held by such entity. The address for this stockholder is Rm 4F, 15/F, Sunwise Industrial Building, 16-26 Wang
Wo Tsai Street, Tsuen Wan, Hong Kong.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Erkai Wang is the sole shareholder and director of Ruiyin
Capital Limited. The address for this stockholder is Rm 4G, 15/F, Sunwise Industrial Building, 16-26 Wang Wo Tsai Street, Tsuen Wan,
Hong Kong.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Shimei Zhou is the sole shareholder and director of Bakelai
Capital Limited. The address for this stockholder is Rm 4, 15/F, Sunwise Industrial Building, 16-26 Wang Wo Tsai Street, Tsuen Wan, Hong
Kong.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7) | The address for this stockholder is 2035 Highway A1A, #306 Indian Harbour Beach, FL 32937.
|--- | ------------------------------------------------------------------------------------------



|(8) | The address for this stockholder is PO Box 30, Dundee, MI 48131.
|--- | ----------------------------------------------------------------





53







Item 13. Certain Relationships and Related Transactions, and Director Independence.



Related Parties



|Name of related parties                               |  | Relationship with the Company                                             
|----------------------------------------------------- |  | --------------------------------------------------------------------------
|Siu Ping Lo                                           |  | Responsible officer of YeeTah                                             
|Huihe Zheng                                           |  | Principal stockholder, Chief Executive Officer and Chairman of the Company
|YeeTah Financial Group Co., Ltd. (“YeeTah Financial”) |  | A company controlled by Siu Ping Lo                                       
|Ouya Properties Group Ltd. (“OPG”)                    |  | A company controlled by Huihe Zheng                                       
|Tim Shannon                                           |  | Chief Financial Officer                                                   



Related Party Transactions



We had the following related party transactions for the fiscal years
ended March 31, 2023 and 2022:



| | (i)  | During the year ended March 31, 2023, YeeTah Financial charged YeeTah US$43,586 (2022: US$67,878) commission expenses in relation to insurance referral services rendered by YeeTah Financial.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                               
| | (ii) | During the year ended March 31, 2023, Huihe Zheng advanced
                                    US$220,350 (2022: US$289,556) to the Company to support its operations.                        
| |      |                                                                                                                                                                                               
| | (ii) | During the year ended March 31, 2023, OPG advanced US$3,202 (2022: US$ nil) to the Company to support its operations.                                                                         



Due to Related Party Balance



The Company’s due to related party balance
is as follows:



|                 |  | March 31, 2023 |           |  | March 31, 2022 | 
|---------------- |  | -------------- | --------- |  | -------------- | 
|                 |  | US$            |           |  | US$            | 
|Huihe Zheng      |  |                | 1,035,730 |  |                | 
|OPG              |  |                | 3,202     |  |                | 
|YeeTah Financial |  |                | 8,176     |  |                | 
|Total            |  |                | 1,047,108 |  |                | 



The due to related party balance is unsecured,
interest-free and due on demand.



Subscription Receivable Due from a Stockholder



The Company’s subscription receivable due
from a stockholder balance is as follows:



|            |  | March 31, 2023 |        |  | March 31, 2022 | 
|----------- |  | -------------- | ------ |  | -------------- | 
|            |  | US$            |        |  | US$            | 
|Huihe Zheng |  |                | 48,718 |  |                | 



The due from stockholder balances represent the
purchase price for shares of QDM BVI to be paid by Mr. Huihe Zheng. These due from stockholder balances at of the balance sheet dates
were unsecured, interest-free and due on demand.



54







Item 14. Principal Accountant Fees and Services.



The following table sets forth fees billed to
us by our independent registered public accounting firm, ZH CPA, LLC, during the fiscal years ended March 31, 2023 and 2022 for: (i) services
rendered for the audit of our annual financial statements and the review of our quarterly financial statements; (ii) services by our independent
registered public accounting firms that are reasonably related to the performance of the audit or review of our financial statements and
that are not reported as audit fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv)
all other fees for services rendered.



|                   |  | 2023 |        |  | 2022 |  
|------------------ |  | ---- | ------ |  | ---- | -
|Audit Fees         |  | $    | 42,500 |  |      | $
|Audit-Related Fees |  |      | —      |  |      |  
|Tax Fees           |  |      | —      |  |      |  
|All Other Fees     |  |      | —      |  |      |  
|Total              |  | $    | 42,500 |  |      | $



Pre-Approval Policies and Procedures



Our board of directors is responsible to approve
all related party transactions. We have not adopted written policies and procedures specifically for related person transactions.





55







PART IV



Item 15. Exhibits, Financial Statement Schedules.



(1) Financial Statements



Financial Statements and Report of Independent
Registered Public Accounting Firm are set forth on pages F-1 through F-17 of this Report.



(2) Financial Statement Schedules



Schedules are omitted because the required information
is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given
in the consolidated financial statements or the notes thereto.



(3) Exhibits



|Exhibit No. |  | Description                                                                                                                                                                                                                                         
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1+        |  | Share Exchange Agreement, dated October 21, 2020, by and among QDM International Inc., QDM Holdings Limited and Huihe Zheng, incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 27, 2020  
|3.1+        |  | Articles of Incorporation, incorporated herein by reference to Exhibit
    3.1 to the Company’s Current Report on Form 8-K12G3 filed on May 1, 2020                                                                                                 
|3.2+        |  | Articles of Amendment to Articles of Incorporation, incorporated
    herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 16, 2021                                                                        
|3.3+        |  | Certification of Designation of Series C Convertible Preferred Stock
    filed on October 8, 2020, incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed
    on October 27, 2020                        
|3.4+        |  | Bylaws, incorporated herein by reference to Exhibit 3.2 to the Company’s
    Current Report on Form 8-K12G3 filed on May 1, 2020                                                                                                                    
|10.1+       |  | Broker Agreement dated November 16, 2015, by and between Company A and YeeTah Insurance Consultant Limited, as supplemented, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 27, 2020 
|10.2+       |  | Broker’s Contract, dated October 19, 2015, by and between Company B and YeeTah Insurance Consultant Limited, as supplemented, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 27, 2020
|10.3+       |  | Agreement dated November 6, 2017, by and between Company C and YeeTah Insurance Consultant Limited, incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 27, 2020                          
|10.4+       |  | Form of Securities Purchase Agreement                                                                                                                                                                                                               
|21.1*       |  | List of Subsidiaries                                                                                                                                                                                                                                
|31.1**      |  | Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302                                                                                                                                                                     
|31.2**      |  | Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302                                                                                                                                                                     
|32.1**      |  | Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                             
|32.2**      |  | Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                             
|101.INS *   |  | Inline
    XBRL Instance Document.                                                                                                                                                                                                                  
|101.SCH *   |  | Inline
    XBRL Taxonomy Extension Schema Linkbase 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).                                                                                                                                                       



|*  | Filed herewith.                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------
|** | Furnished herewith.                                                                                         
|+  | Previously filed and incorporated by reference to exhibits to Company’s
Form S-1 filed on December 21, 2022.



Item 16. FORM 10-K SUMMARY



Not applicable.





56







SIGNATURES



Pursuant to the requirements of Section 13 or
15(d) 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.



|                    | QDM International Inc.
|------------------- | ----------------------
|                    |                       
|Date: June 29, 2023 | By:                   
|                    | Name:                 
|                    | Title:                



Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.



|Signature         |  | Title                                                     |  | Date         
|----------------- |  | --------------------------------------------------------- |  | -------------
|                  |  |                                                           |  |              
|/s/ Huihe Zheng   |  | Chairman of the Board, Chief Executive Officer            |  | June 29, 2023
|Huihe Zheng       |  | (principal executive officer), and President              |  |              
|                  |  |                                                           |  |              
|/s/ Tim Shannon   |  | Chief Financial Officer                                   |  | June 29, 2023
|Tim Shannon       |  | (principal accounting and financial officer) and Director |  |              
|                  |  |                                                           |  |              
|/s/ Timothy Miles |  | Director                                                  |  | June 29, 2023
|Timothy Miles     |  |                                                           |  |              
|                  |  |                                                           |  |              
|/s/ Huili Shen    |  | Secretary and Director                                    |  | June 29, 2023
|Huili Shen        |  |                                                           |  |              





57