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1、2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm1/135As filed with the U.S.Securities and Exchange Commission on November 12,2024Registration No.333-UNITED STATESSECURITIES AND EX

2、CHANGE COMMISSIONWashington,D.C.20549_FORM S-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933_QDM INTERNATIONAL INC.(Exact name of registrant as specified in its charter)_Florida 6411 59-3564984(State or otherjurisdiction ofIncorporation ororganization)(Primary StandardIndustrialClassification

3、 Code Number)(I.R.S.EmployerIdentification No.)Room 1030B,10/F,Ocean CentreHarbour City,5 Canton RoadTsim Sha Tsui,HongKongTel:+852 31889800(Address,including zip code,and telephone number,including area code,ofregistrants principal executive offices)_Huihe ZhengPresident,Chief Executive Officer and

4、 ChairmanQDM INTERNATIONAL INC.Room 1030B,10/F,Ocean CentreHarbour City,5 Canton RoadTsim Sha Tsui,HongKongTel:+852 31889800(Name,address,including zip code,and telephone number,including area code,ofagent for service)_Copies to:Wei Wang,Esq.Ellenoff Grossman&Schole LLP1345 Avenue of the AmericasNew

5、York,NewYork 10105Phone:(212)370-1300Fax:(212)370-7889 Anthony W.Basch,Esq.Alexander W.Powell,Esq.Benming Zhang,Esq.Kaufman&Canoles,P.C.Two James Center,14thFloor1021 East Cary St.Richmond,Virginia 23219Telephone:(804)771-5700_Approximate date of commencement of proposed sale to the public:As soon a

6、s practicable after the effective date of this registration statement.If any of the securities being registered on this Form are to be offered on a delayed orcontinuous basis pursuant to Rule415 under the Securities Actof1933,check the following box.If this Form is filed to register additional secur

7、ities for an offering pursuant toRule462(b)under the Securities Act,please check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)un

8、der theSecurities Act,check the following box and list the Securities Act registration statement number ofthe earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under theSecurities Act,check the following box and lis

9、t the Securities Act registration statement number ofthe earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is a large,accelerated filer,an acceleratedfiler,a non-accelerated filer,smaller reporting company,or an emerging growth company.See t

10、hedefinitions of“large,accelerated filer,”“accelerated filer,”and“smaller reportingcompany,”and“emerging growth company”in Rule12b-2 of the ExchangeAct.Large,acceleratedfiler Acceleratedfiler Non-acceleratedfiler Smallerreportingcompany Emerginggrowthcompany If an emerging growth company,indicate by

11、 check mark if the registrant has elected not to usethe extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section7(a)(2)(B)of the Securities Act.The registrant hereby amends this registration statement on such date or dates as may ben

12、ecessary to delay its effective date until the registrant shall file a further amendment whichspecifically states that this registration statement shall thereafter become effective in accordancewith Section 8(a)of the Securities Act of 1933,as amended,or until the registration statementshall become

13、effective on such date as the Securities and Exchange Commission,acting pursuant tosaid Section 8(a),may determine.2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm2/135Table of Co

14、ntentsThe information in this prospectus is not complete and may be changed.The securitiesin this registration statement may not be sold until the registration statement filedwith the Securities and Exchange Commission is effective.This prospectus is not anoffer to sell these securities and it is no

15、t soliciting an offer to buy thesesecurities in any jurisdiction where the offer or sale is not permitted.PRELIMINARYPROSPECTUS SUBJECTTOCOMPLETION,DATEDNOVEMBER12,2024QDM INTERNATIONAL INC.$7,500,000 Shares of Common StockThis is a firm commitment public offering of shares of common stock of QDMInt

16、ernational Inc.,par value$0.0001 per share.We currently estimate that thepublic offering price will be between$and$per share.Our common stock is quoted on the OTCQB Venture Market operated by OTC MarketsGroup,Inc.(the“OTCQB”),under the ticker symbol“QDMI.”As of November 7,2024,the last reported pric

17、e of our common stock was$2.71 per share at market close.There is a limited public trading market for our common stock.You are urged toobtain current market quotations for the common stock.We intend to apply to list ourcommon stock on The Nasdaq Stock Market LLC(“Nasdaq”)under the symbol“QDMI”.Webel

18、ieve that upon completion of this offering contemplated by this prospectus,wewill meet the standards for listing on the Nasdaq.No assurance can be given that ourapplication will be approved.The offering price of our shares of common stock in this offering will bedetermined between the underwriters a

19、nd us at the time of pricing,considering ourhistorical performance and capital structure,prevailing market conditions,andoverall assessment of our business,and may be at a discount to the current marketprice.Therefore,the recent market price of our common stock and the public offeringprice of the co

20、mmon stock used throughout this prospectus for this offering may notbe indicative of the actual offering price for the shares of common stock.We are a“smaller reporting company”as defined in the Jumpstart Our BusinessStartups Actof2012(the“JOBS Act”)and have elected to comply with certainreduced pub

21、lic company reporting requirements.See“ProspectusSummaryImplications of Being a Smaller Reporting Company.”Our officers and directors currently have,and will continue to have,significantinfluence over the Company following the completion of this offering due to theirsignificant shareholding in the C

22、ompany,in particular,Mr.Huihe Zheng,ourPresident,CEO,and chairman of the board of directors,who currently holdsapproximately 81.0%of the voting power of our Company.For more informationregarding Mr.Zhengs beneficial ownership,see“Security Ownership of PrincipalShareholders and Management”on page 69

23、and“Risk FactorsRisks Related to OurSecuritiesOur CEO,President and Chairman of the board of directors,Mr.HuiheZheng,has a substantial influence over our Company.His interests may not be alignedwith the interests of our other shareholders,and he could prevent or cause a changeof control or other tra

24、nsactions.”on page23.Our Hong Kong operating subsidiary conducts its business in Hong Kong,aSpecial Administrative Region of the PRC.Conducting business in HongKong involvesrisks of uncertainty about any actions by the Chinese government or authorities inHongKong.There are significant legal and oper

25、ational risks associated with being based inor having the majority of operations in HongKong,including those changes in thelegal,political and economic policies of the Chinese government,the relationsbetween China and the UnitedStates,or Chinese or U.S.regulations may materiallyand adversely affect

26、our business,financial condition and results of operations.Further,the Chinese government may disallow our current corporate structure,whichwould likely result in a material change in our HongKong operating subsidiarysoperations and/or a material change in the value of the common stock being registe

27、redin this offering and it could cause the value of such securities to significantlydecline or become worthless.The PRC government has initiated a series of regulatoryactions and made a number of public statements on the regulation of businessoperations in China,including cracking down on illegal ac

28、tivities in the securitiesmarket,enhancing supervision over China-based companies listed overseas,adoptingnew measures to extend the scope of cybersecurity reviews,and expanding efforts inanti-monopoly enforcement.No effective laws or regulations in the PRC explicitlyrequire the Company to seek appr

29、oval from the 2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm3/135Table of ContentsChina Securities Regulatory Commission(the“CSRC”)or any other PRC governmentalauthorities for t

30、he Companys overseas listing plan,nor has the Company oroperating subsidiary received any inquiry,notice,warning or sanctions regarding theplanned overseas listing from the CSRC or any other PRC governmental authorities.However,since these statements and regulatory actions by the PRC government aren

31、ewly published and official guidance and related implementation rules are stillbeing issued,it is highly uncertain what the potential impact such modified or newlaws and regulations will have on the Companys daily business operation,theability to accept foreign investments and list on an U.S.exchang

32、e.Any such changescould significantly limit or completely hinder our ability to offer or continue tooffer our securities to investors,and could cause the value of our securities tosignificantly decline or become worthless.See“Risk FactorsRisks Related toDoing Business in HongKongPolitical risks asso

33、ciated with conducting businessin HongKong and economic instability in HongKong may adversely impact our resultsof operations.We may also face the risk that changes in the policies of the PRCgovernment could have a significant impact upon the business we conduct in HongKongand the profitability of s

34、uch business,”and“Substantial uncertainties andrestrictions with respect to the political and economic policies of the PRCgovernment and PRC laws and regulations could have a significant impact upon thebusiness that we conduct in Hong Kong and accordingly on the results of ouroperations and financia

35、l condition.”beginning on page 14.On February 17,2023,with the approval of the State Council,the CSRCpromulgated the Trial Administrative Measures of Overseas Securities Offering andListing by Domestic Companies,or the Trial Measures,and five supporting guidelines,which came into effect on March31,2

36、023.On May16,2023 and May7,2024,the CSRCpromulgated the supporting guidelines No.6 and No.7 to the Trial Measures,respectively.Pursuant to the Trial Measures and their supporting guidelines,(i)domestic companies incorporated in mainland China that seek to offer or listsecurities overseas,both direct

37、ly and indirectly,shall file with the CSRC pursuantto the requirements of the Trial Measures within three workingdays following theirfirst submission of initial public offerings or listing applications;if a domesticcompany fails to complete the required filing procedures or conceals any materialfact

38、 or falsifies any major content in its filing documents,such domestic companymay be subject to administrative penalties,such as an order to rectify,warnings andfines,and its controlling shareholders,actual controllers,the person directly incharge and other directly liable persons may also be subject

39、 to administrativepenalties,such as warnings and fines;(ii)if the issuer meets both of thefollowing criteria,the overseas offering and listing conducted by such issuer shallbe deemed an indirect overseas offering and listing by a domestic company:(A)morethan 50%of any of the issuers operating revenu

40、e,total profit,total assets or netassets as documented in its audited consolidated financial statements for the mostrecent fiscal year is accounted for by domestic companies;and(B)the majority ofthe issuers business activities are carried out in mainland China,or its mainplace(s)of business are loca

41、ted in mainland China,or the majority of its seniormanagement team in charge of its business operations and management are PRC citizensor have their usual place(s)of residence located in mainland China;and(iii)domestic companies listed on overseas over-the-counter markets are notrequired to file wit

42、h the CSRC in accordance with the Trail Measures;however,domestic companies that seek to offer or list securities in overseas markets througha uplisting shall file with the CSRC pursuant to the requirements of the TrialMeasures within three working days following their first submission of uplistinga

43、pplications.Based on the above mentioned,given that(i)the Company currently does nothave,nor does it currently intend to establish,any subsidiary nor plan to enterinto any contractual arrangements to establish a VIE structure with any entity inmainland China;(ii)the principal business activities of

44、the Company are carriedout in Hong Kong through its Hong Kong subsidiaries,and the main place of businessof the Company is located in Hong Kong;(iii)it currently does not have,nor does itplan to have,any investment,such as owning or leasing any asset,in mainland China;(iv)only half,rather than a maj

45、ority,of the Companys officers and directors arecitizens of the PRC or domiciled in mainland China;and(v)no operating revenue,total profit,total assets or net assets of the Company is accounted for by anydomestic company for the most recent fiscal year,this offering shall not be deemedas a domestic

46、company that indirectly offer or list securities on an overseas stockexchange,nor does it requires filing or approvals from the CSRC.Further,as of the date of this prospectus,in the opinion of our PRC legalcounsel,Beijing DeHeng Law Offices,the Company is not considered a domesticenterprise under th

47、e Trial Measures and the Trial Measures do not apply to theCompany,and its listing on Nasdaq does not require fulfilling the filing procedurewith the CSRC.However,there can be no assurance that the relevant PRC governmentalauthorities,including the CSRC,would reach the same conclusion as our PRC leg

48、alcounsel,or that the CSRC or any other PRC governmental authorities would notpromulgate new rules or new interpretation of current rules(with retrospectiveeffect)to require us to obtain CSRC or other PRC governmental approvals for thisoffering.If we or our HongKong operating subsidiary inadvertentl

49、y conclude thatsuch approvals are not required,we may be required to make corrections,be given awarning,be fined between RMB 1 million and RMB 10 million,and the relevantgovernment authorities may warn the responsible person and impose a fine of not lessthan RMB 500,000 but not more than RMB 5millio

50、n,fine the controlling 2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm4/135Table of Contentsshareholder not less than RMB 1million but not more than RMB 10million,or preventthe r

51、elevant personnel from entering the securities market,so our ability to offeror continue to offer our common stock to investors could be significantly limited orcompleted hindered,which could cause the value of our common stock to significantlydecline or become worthless.The Company may also face sa

52、nctions by the CyberspaceAdministration of China(“CAC”)or other PRC regulatory agencies.These regulatoryagencies may impose fines and penalties on our operations in the HongKong,limitour ability to pay dividends outside of China,limit our operations in theHongKong,delay or restrict the repatriation

53、of the proceeds from this offeringinto the HongKong or take other actions that could have a material adverse effecton our business,financial condition,results of operations and prospects,as well asthe trading price of our securities.The Holding Foreign Companies Accountable Act(the“HFCA Act”)was ena

54、cted onDecember18,2020.The HFCA Act states if the SEC determines that a company hasfiled audit reports issued by a registered public accounting firm that has not beensubject to inspection by the Public Company Accounting Oversight Board of theUnitedStates(the“PCAOB”)for three consecutiveyears beginn

55、ing in 2021,theSEC shall prohibit the companys shares from being traded on a national securitiesexchange or in the over-the-counter trading market in the UnitedStates.On December 16,2021,the Public Company Accounting Oversight Board(UnitedStates),or the PCAOB,issued a report to notify the SEC of its

56、 determination thatthe PCAOB was unable to inspect or investigate completely registered publicaccounting firms headquartered in mainland China and Hong Kong.Our auditor,ZH CPA,LLC(the“ZH CPA”),the independent registered public accounting firm that issuesthe audit report included in this prospectus,i

57、s headquartered in Denver,Colorado,and has been inspected by the PCAOB on a regular basis,with the last inspection in2023.As of the date of this prospectus,our auditor is not among the firms listed onthe PCAOB Determination List issued in December 2021.On August26,2022,the PCAOBsigned a Statement of

58、 Protocol with the CSRC and the Ministry of Finance of the PRC,taking the first step toward opening access for the PCAOB to inspect and investigateregistered public accounting firms headquartered in mainland China and Hong Kongcompletely,consistent with U.S law,rules,and regulations.On December15,20

59、22,the PCAOB vacated its previous Determination List,which concluded in December2021that the PCAOB could not inspect or investigate completely registered publicaccounting firms based in mainland China or HongKong.However,if in the future thePCAOB is prohibited from conducting complete inspections an

60、d investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong,then thecompanies audited by those registered public accounting firms could be subject to atrading prohibition on U.S.markets pursuant to the HFCA Act.Each year,the PCAOBwill determine whether it can inspect

61、 and investigate completely audit firms inmainland China and Hong Kong,among other jurisdictions.If the PCAOB determines inthe future that it no longer has full access to inspect and investigate completelyaccounting firms in certain jurisdictions and we use an accounting firm headquarteredin one of

62、such jurisdictions to issue an audit report on our financial statementsfiled with the SEC,we would be identified as a Commission-Identified Issuerfollowing the filing of the annual report on Form 10-K for the relevant fiscal year.On December 29,2022,the Consolidated Appropriations Act,2023 was signe

63、d into law,which,among others,amended the HFCA Act to reduce the number of consecutive yearsan issuer can be identified a Commission-Identified Issuer before the SEC must imposean initial trading prohibition on the issuers securities from three years to two.There can be no assurance that we would no

64、t be identified as a Commission-IdentifiedIssuer for any future fiscal year,and if we were so identified for two consecutiveyears,we would become subject to the prohibition on trading under the HFCA Act.See“Risk Factors Risks Related to Doing Business in Hong Kong The HFCA Act and therelated regulat

65、ions continue to evolve.Further implementations and interpretationsof or amendments to the HFCA Act or the related regulations,or a PCAOB determinationof its lack of sufficient access to inspect our auditor,might pose regulatory risksto and impose restrictions on us.”on page 19.We hold all of the eq

66、uity interests in our Hong Kong operating subsidiarythrough a subsidiary incorporated in the British Virgin Islands,or BVI and asubsidiary incorporated in Hong Kong.As we have a direct equity ownershipstructure,we do not have any agreement or contract between our Company and any ofits subsidiaries t

67、hat are typically seen in a variable interest entity structure.Within our direct equity ownership structure,funds from foreign investors can bedirectly transferred to our BVI or Hong Kong subsidiaries by way of capitalinjection or in the form of a shareholder loan from the Company following thisoffe

68、ring.As a holding company,we may rely on dividends and other distributions onequity paid by our Hong Kong operating subsidiary for our cash and financingrequirements.We are permitted under the laws of Florida and our Articles ofIncorporation(as amended from time to time,the“Articles of Incorporation

69、”)toprovide funding to our Hong Kong operating subsidiary incorporated in Hong Kongthrough 2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm5/135Table of Contentsloans and/or capit

70、al contributions.Our HongKong operating subsidiary is permittedunder the laws of HongKong to issue cash dividends to us without limitation on thesize of such dividends,subject to availability of distributable profits.However,ifour HongKong subsidiaries incur debt on their own behalf,the instruments

71、governingsuch debt may restrict their ability to pay dividends.As of the date of thisprospectus,no transfers were made from the Company to our HongKong subsidiariesand neither of the Companys HongKong subsidiaries has encountered difficulties orlimitations with respect to their respective abilities

72、to transfer cash between eachother.As of the date of this prospectus,our HongKong operating subsidiary doesnot maintain cash management policies or procedures dictating the amount of suchfunding or how funds are transferred.See“Risk FactorsRisk Related to DoingBusiness in HongKongWe may rely on divi

73、dends and other distributions on equitypaid by our Hong Kong operating subsidiary to fund any cash and financingrequirements it may have,and any limitations or restrictions,prohibitions,interventions or limitations by the PRC government on the ability of the Company orour HongKong operating subsidia

74、ry to transfer cash or assets in or out of HongKongmay result in these funds or assets not being available to fund operations or forother uses outside of HongKong,which on the ability of our HongKong operatingsubsidiary to make payments to the Company could have a material and adverse effecton the b

75、usiness”onpage 19 of this prospectus.There can be no assurances that thePRC government will not restrict or prohibit the flow of cash in or out ofHongKong.Any restrictions,prohibitions,interventions or limitations by the PRCgovernment on the ability of the Company or our HongKong subsidiaries to tra

76、nsfercash or assets in or out of HongKong may result in these funds or assets not beingavailable to fund operations or for other uses outside of HongKong.For additionalinformation,see the Companys consolidated financial statements and notes theretobeginning on page F-1.As of the date of this prospec

77、tus,we have not distributed any earnings,nor dowe have any plan to distribute earnings in the foreseeable future.As of the date ofthis prospectus,our HongKong operating subsidiary has not made any dividends ordistributions to the Company and the Company has not made any dividends ordistributions to

78、the Companys shareholders or U.S.investors.We intend to keep anyfuture earnings to finance business operations,and does not anticipate that any cashdividends will be paid in the foreseeable future.Investing in our common stock involves significant risks.You shouldread the section entitled“Risk Facto

79、rs”beginning on page 10 of thisprospectus for a discussion of information that should be considered beforeinvesting in our common stock.We may amend or supplement this prospectus from time to time by filing amendmentsor supplements as required.You should read the entire prospectus and any amendments

80、or supplements carefully before you make your investment decision.Upon completion of this offering,our issued and outstanding shares will consistof shares of common stock.We will be a controlled company as defined underthe Nasdaq Stock Market Rule5615(c)because,immediately after the completion ofthi

81、s offering,Mr.Zheng will own%of our total voting power.Neither the Securities and Exchange Commission nor any state securitiescommission has approved or disapproved of these securities or passed uponthe adequacy or accuracy of this prospectus.Any representation to thecontrary is a criminal offense.P

82、er Share TotalPublic offering price$Underwriting discounts and commissions(1)(2)$Proceeds to us,before expenses$_(1)Represents underwriting discount and commissions equal to(i)seven percent(7.0%)per share,which is the underwriting discount we have agreed to pay on investors in this offeringintroduce

83、d by the underwriters;and(ii)five percent(5.0%)per share,which is theunderwriting discount we have agreed to pay on investors in this offering introduced by us.For the purpose of this calculation only,we assume 100%investors in this offering areintroduced by the underwriters with no exercise of the

84、over-allotment.(2)Does not include a non-accountable expense allowance equal to 1.0%of the gross proceeds ofthis offering,payable to the underwriters,or the reimbursement of certain expenses of theunderwriters.In addition,we have agreed to issue upon the closing of this offering,compensation warrant

85、s to Aegis Capital Corp.and Axiom Capital Management,Inc.,asrepresentatives of the underwriters,exercisable for a period of five years from thecommencement date of sales in this offering entitling the representatives to purchase up to 5%of the number of shares sold in this offering at a per share ex

86、ercise price equal to 100%ofthe public offering price.The registration statement of which this prospectus is a part alsocovers such warrants and the shares issuable upon the exercise thereof.For a description ofthe other terms of compensation to be received by the underwriters,see“Underwriting.”2024

87、/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm6/135Table of ContentsAegis Capital Corp.(“Aegis”)and Axiom Capital Management,Inc.(“Axiom”)are acting as the representatives of the un

88、derwriters(the“Representatives”)inthis offering.We have granted the Representatives a 30-day option to purchase up to additional shares of common stock on the same terms as other sharesbeing purchased by the Representatives from us,solely to cover over-allotments,ifany(such shares not to exceed,in t

89、he aggregate,15%of the shares offered hereby).If the Representatives exercise the option in full,the total underwriting discountsand commissions payable by us will be$,and the total proceeds tous,before expenses,will be$.The underwriters expect to deliver the shares on or about,2024.Joint Book-Runni

90、ng ManagersAegis Capital Corp.Axiom Capital Management,Inc.The date of this prospectus is,2024.2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm7/135Table of ContentsTABLE OF CONTE

91、NTS PageCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS iiDEFINITIONS iiiABOUT THIS PROSPECTUS ivINDUSTRY AND MARKET DATA vPROSPECTUS SUMMARY 1RISK FACTORS 10USE OF PROCEEDS 29MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS 30DIVIDEND POLICY 32CAPITALIZATIONNOTES 33DILUTION 34MANAGEMEN

92、TS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOFOPERATION 36INDUSTRY 43BUSINESS 45MANAGEMENT 63EXECUTIVE COMPENSATION 67SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT 69CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 71DESCRIPTION OF SECURITIES 72SHARES ELIGIBLE FOR

93、FUTURE SALE 73MATERIAL U.S.FEDERAL INCOME TAX CONSEQUENCES 74UNDERWRITING 78LEGAL MATTERS 87EXPERTS 87WHERE YOU CAN FIND MORE INFORMATION 87INDEX TO FINANCIAL STATEMENTS F-1Through and including,2024(the 25thday after the date of thisprospectus),all dealers effecting transactions in these securities

94、,whether or not participating in the offering,may be required to deliver aprospectus.This is in addition to a dealers obligation to deliver aprospectus when acting as an underwriter and with respect to an unsoldallotment or subscription.i2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/0001213900

95、24096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm8/135Table of ContentsCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThe information in this prospectus contains“forward-looking statements”withinthe meaning of the Private Securities Liti

96、gation Reform Actof1995.We intend suchforward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933,asamended(the“Securities Act”)and Section21E of the SecuritiesExchangeActof1934,as amended(the“ExchangeAc

97、t”).All statements other thanstatements of historical facts contained in this prospectus are“forward-lookingstatements”for purposes of federal and state securities laws,including statementsregarding our expectations and projections regarding future developments,operationsand financial conditions,and

98、 the anticipated impact of our acquisitions,businessstrategy,and strategic priorities.These statements involve known and unknown risks,uncertainties and other important factors that may cause our actual results,performance or achievements to be materially different from any future results,performanc

99、e or achievements expressed or implied by the forward-looking statements.In some cases,you can identify forward-looking statements by terms such as“may,”“will,”“should,”“expect,”“plan,”“anticipate,”“could,”“intend,”“target,”“project,”“contemplate,”“believe,”“estimate,”“predict,”“potential”or“continu

100、e”or the negative of these terms or othersimilar expressions,although not all forward-looking statements contain these words.The forward-looking statements in this prospectus are only predictions and are basedlargely on our current expectations and projections about future events and financialtrends

101、 that we reasonably believe may affect our business,financial condition,andresults of operations.These forward-looking statements speak only as of the date ofthis prospectus and are subject to known and unknown risks,uncertainties,andassumptions.Although we believe the expectations reflected in any

102、of our forward-looking statements are reasonable,actual results could differ materially from thoseprojected or assumed in any of our forward-looking statements.Our future financialcondition and results of operations,as well as any forward-looking statements,aresubject to change and inherent risks an

103、d uncertainties.Accordingly,you are cautioned not to place undue reliance on forward-lookingstatements.Except as required by applicable law,we do not plan to publicly updateor revise any forward-looking statements contained herein,whether because of any newinformation,future events,changed circumsta

104、nces or otherwise.Important factorsthat could cause actual results to differ materially from those in the forward-looking statements include,but are not limited to,those summarized below:the impact of political uncertainty and social unrest in Hong Kong andlaws,rules and regulations of the Chinese g

105、overnment aimed at addressingsuch unrest;the market for our services in HongKong 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 an

106、d political conditions in Hong Kong andmainland China;the future growth of the HongKong insurance industry as a whole and theprofessional insurance intermediary sector in particular;our ability to attract customers,further enhance our brand recognition;our ability to hire and retain qualified manage

107、ment personnel and keyemployees in order to enable them to develop our business;changes in applicable laws or regulations in HongKong related to or thatcould impact our business;our management of business through a U.S.publicly-traded and reportingcompany;andother assumptions regarding or descriptio

108、ns of potential future events orcircumstances described in this prospectus underlying or relating to anyforward-looking statements.The other risks identified in this prospectus including,without limitation,those under“Risk Factors”and“Managements Discussion and Analysis of FinancialCondition and Res

109、ults of Operations,”as such factors may updated from time to timein our other filings with the SEC.ii2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm9/135Table of ContentsDEFINITI

110、ONSUnless otherwise indicated or the context otherwise requires,references in thisregistration statement on FormS-1 to:“24/7 Kid”are to 24/7 Kid Doc,Inc.,a Florida corporation and wholly-owned subsidiary of the Company,which was dissolved in September2022;“BVI”are to the British Virgin Islands;“Chin

111、a”or the“PRC”are to the Peoples Republic of China,includingHongKong,the special administrative region of Macau and Taiwan,unless inthe context of describing the PRC laws,regulations and other legal or taxmatters in this prospectus,excluding Taiwan,HongKong,and the specialadministrative region of Mac

112、au;“common stock”are to the common stock of the Company,par value$0.0001per share;the“Company,”“we,”“us,”and“our”are to QDM International Inc.and its consolidated subsidiaries,unless the context suggests otherwise;and“HKD,”“HK$”and“Hong Kong dollars”are to the legal currency ofHongKong;“HongKong”are

113、 to the HongKong Special Administrative Region of thePeoples Republic of China;“Lutter Global Limited”or“LGL”are to Lutter Global Limited,a BVIcompany and a wholly-owned subsidiary of the Company;“mainland China”are to the Peoples Republic of China,excludingHongKong,Macau and Taiwan;“QDM BVI”are to

114、QDM Holdings Limited,a BVI company and a wholly-ownedsubsidiary of the Company;“QDM HK”are to QDM Group Limited,a HongKong corporation and a wholly-owned subsidiary of QDM BVI;“QDM”are to QDM International Inc.,a Florida corporation;“Series C Preferred Stock”are to the Series C Convertible Preferred

115、Stock,par value$0.0001 per share,of the Company,each convertible intoapproximately 3.67 shares of common stock;“technical representatives”are to licensed individuals who provide adviceto an insurance policy holder or potential policy holder on insurancematters on behalf of an insurance agent or brok

116、er,or arrange contracts ofinsurance in or from HongKong on behalf of that insurance agent or broker;“US$,”“U.S.dollars,”and“$,”are to the legal currency of theUnitedStates;and“YeeTah”are to HongKong YeeTah Insurance Broker Limited,formerly knownas YeeTah Insurance Consultant Limited,a HongKong corpo

117、ration and wholly-owned subsidiary of QDM HK.iii2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm10/135Table of ContentsABOUT THIS PROSPECTUSYou should rely only on the information

118、 contained in or incorporated by referencein this prospectus.Neither we nor the underwriters have authorized anyone to provideyou with different information.If anyone provides you with different or inconsistentinformation,you should not rely on it.You should not assume that the information contained

119、 in this prospectus,or anydocument incorporated by reference in this prospectus,is accurate as of any dateother than the date on the front cover of the applicable document.The informationcontained in this prospectus is accurate only as of the date of this prospectus,regardless of the time of deliver

120、y of this prospectus or of any sale of our commonstock.Neither the delivery of this prospectus nor any distribution of securities inaccordance with this prospectus shall,under any circumstances,imply that there hasbeen no change in the information set forth or incorporated by reference into thispros

121、pectus or in our affairs since the date of this prospectus.Our business,financial condition,operating results and prospects may have changed since thatdate.Information contained on our website,or any other website operated by us,isnot part of this prospectus.On March 28,2024,we filed an Articles of

122、Amendment to Articles ofIncorporation of the Company with the Florida Division of Corporation to(i)increase our authorized shares of Common Stock,par value$0.0001 per share,from 200,000,000 shares to 700,000,000 shares and our authorized shares of preferredstock,par value$0.0001 per share,from 5,000

123、,000 shares to 30,000,000 shares;and(ii)effect a forward split of our issued and outstanding shares of common stock ata ratio of 10-for-1(the“2024 Forward Stock Split”),which became effective as ofApril5,2024.The foregoing amendments were approved by the Companys board ofdirectors and shareholders h

124、olding approximately 60.9%of the voting power of theCompany.As a result of the 2024 Forward Stock Split,each issued and outstanding share ofthe Common Stock prior to the effective time of the 2024 Forward Stock Spilt weresplit into ten shares of Common Stock and the total number of issued and outsta

125、ndingshares of Common Stock increased from 29,156,393 shares to 291,563,930 shares.The2024 Forward Stock Split had no impact on the Companys issued and outstandingshares of preferred stock other than that the conversion rate and voting rights ofour SeriesC Convertible Preferred Stock were proportion

126、ately adjusted.On April4,2024,the 2024 Forward Stock Split was approved and announced by the FinancialIndustry Regulatory Authority with an effective date on April5,2024.All numbersin this prospectus give effect to the 2024 Forward Stock Split unless indicatedotherwise.Unless we indicate otherwise,t

127、he number of shares of our common stock that willbe outstanding immediately after this offering is based on 291,563,930 shares of ourcommon stock outstanding as of November 12,2024.Except as otherwise indicatedherein,all information in this prospectus assumes no exercise by the Representativesof the

128、ir over-allotment option to purchase additional shares.Unless stated otherwise,all dollar amounts are in United States Dollars.Certainamounts are expressed in Hong Kong dollars.The exchanges rate used for translation from Hong Kong dollar to US$was 7.8000,a pegged rate determined by the linked excha

129、nge rate system in Hong Kong.This peggedrate was used to translate Companys balance sheets,income statement items and cashflow items for both the three months ended June 30,2024 and 2023 and the years endedMarch 31,2024 and 2023.Before purchasing any securities,you should carefully read both this pr

130、ospectus,together with the additional information described under the heading“Where You CanFind More Information”in this prospectus.iv2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.

131、htm11/135Table of ContentsINDUSTRY AND MARKET DATAThis prospectus includes industry data and forecasts that we obtained fromindustry publications and surveys,public filings,and internal company sources.Statements as to our market estimates are based on independent industry publications,government pu

132、blications,third-party forecasts and managements good faith estimatesand assumptions about our markets and our internal research.Although we believe ourinternal company research and estimates are reliable,such research and estimateshave not been verified by any independent source.This data involves

133、risks anduncertainties and is subject to change based on various factors,including thosediscussed under the headings“Risk Factors”and“Cautionary NoteRegarding ForwardLooking Statements”in this prospectus.v2024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/w

134、ww.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm12/135Table of ContentsPROSPECTUS SUMMARYThis summary highlights selected information contained elsewhere in thisprospectus,but it does not contain all of the information that you may considerimportant in making your investmen

135、t decision.You should read the entire prospectuscarefully,including the section entitled“Risk Factors”in this prospectus,thefinancial statements and the notes to the financial statements included elsewherein this prospectus.OverviewQDM is a holding company incorporated in Florida with no material op

136、erations ofits own,and we conduct our insurance brokerage business through our indirectlywholly-owned subsidiary,YeeTah,primarily in HongKong.YeeTah sells a wide range of insurance products consisting of two majorcategories:(i)life and medical insurance,such as individual life insurance;and(ii)gener

137、al insurance,such as automobile insurance,commercial propertyinsurance,liability insurance and homeowner insurance.In addition,as a MandatoryProvident Fund(“MPF”)intermediary,YeeTah is also licensed to provide customerswith assistance on information collection,explanation of MPF products and policie

138、s(excluding investment advisory services),assistance with applications to set upMPF accounts,and transfer of funds across their respective MPF schemes.The MPFand the Occupational Retirement Schemes Ordinance(“ORSO”)schemes in HongKongare retirement protection schemes set up for employees who are Hon

139、gKong residents.YeeTah sells insurance products underwritten by insurance companies operatingin Hong Kong to individual customers who are either Hong Kong residents orvisitors from mainland China and is compensated for its services by commissionspaid by insurance companies,typically based on a perce

140、ntage of the premium paid bythe insured.Commissions generally depend on the type and term of insuranceproducts and the particular insurance company,and they are usually paid by theinsurance companies the next month after the cooling off period of the policiessold,which is generally 21days after the

141、earlier of the delivery of the policy orthe delivery of the cooling off notice to the policy holder,during which periodpolicy purchasers may cancel the policy at their discretion and receive refunds.As of the date of this prospectus,YeeTah is a party to agreements with 17insurance companies in HongK

142、ong,and offers approximately 464 insurance productsto its individual customers.For the fiscal year ended March 31,2024,approximately 96.5%of YeeTahs total commissions were attributable to oneinsurance company.For the fiscal year ended March31,2023,an aggregate of 99.1%of YeeTahs total commissions we

143、re attributable to its top two insurance companies.During the fiscal year ended March31,2024 and March31,2023,YeeTah had atotal of 133 and 63 customers who have purchased life and medical insuranceproducts through us,and 33 and 23 individual customers who have purchased generalinsurance products,as

144、well as five and four customers for MPF related services,respectively.As of the date of this prospectus,Yeetah has not provided anycustomer ORSO related services.As an independent insurance broker,YeeTah offers not only a broad range ofinsurance products underwritten by multiple insurance companies

145、to address thediverse needs and preferences of increasingly sophisticated customers but alsoprovide a range of quality services covering insurance policy application,customerinformation collection,analysis of policy selection,and after-sale services.YeeTah focuses on offering long-term life insuranc

146、e products includingendowment life and annuity life insurance and distributes general insuranceproducts including automobile insurance,individual accident insurance,homeownerinsurance,liability insurance and travel insurance.All of YeeTahs sales of lifeand medical insurance products and general insu

147、rance products are conducted throughits licensed salespersons(known in HongKong as technical representatives).HongKongs independent insurance intermediary market is experiencing rapidgrowth due to increasing demands for insurance products by the Chinese population,especially visitors from mainland C

148、hina.Although we do not sell any insuranceproducts in mainland China or solicit any customer in China,we intend to grow ourbusiness by offering premium services and recruiting talent to join ourprofessional team and sales force,expanding our distribution network throughbuilding more connections with

149、 business partners in HongKong and mainland China,such as wealth management companies,funds,trust companies,and overseasimmigration agencies.12024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea021

150、3156-01.htm13/135Table of ContentsOur Competitive StrengthsWe believe that the following competitive strengths contribute to our growthand differentiate us from our competitors:Premium Customer Service Experience.Concentrated Insurance Product Offerings.Good Relationships with Insurance Companies.Ex

151、perienced Management Team in the Insurance Industry.Strong Commitment to Rigorous Training and Development.Our Growth StrategiesOur goal is to further expand our distribution network.To achieve this goal,we intend to capitalize on the growth potential of HongKongs insurance industryand the insurance

152、 intermediary sector,leverage our competitive strengths andpursue the following strategies:Further Participation in the Growing Life-Insurance Sector in HongKong.Further Expand Our Distribution Network Through Building Relationshipswith Strategic Partners.Continue to Strengthen Our Relationships wit

153、h Leading Insurance Companies.Our Services and ProductsWe sell a wide range of insurance products consisting of two major categories:(i)life and medical insurance,such as individual life insurance;and(ii)general insurance,such as automobile insurance,commercial propertyinsurance,liability insurance

154、and homeowner insurance.We are also licensed toprovide customers with assistance on account opening and related services under theMPF and the ORSO schemes in HongKong,which are retirement protection schemes setup for employees who are HongKong residents.Life and Medical Insurance ProductsOur life an

155、d medical insurance products collectively accounted forapproximately 99.90%and 99.49%of our net revenues for the fiscalyears endedMarch 31,2024 and 2023,respectively.For life and medical insurance productspurchased by our customers,we generally receive commissions in the range of 2.75%to 86.4%of the

156、 first year premiums and in the range of 0%to 64.8%of renewalpremiums.The sale of life and medical insurance products is,and we currently expect itto continue to be,the major source of our revenue in the next severalyears.Webegan offering life insurance products in 2015 with a focus on individual li

157、feproducts with periodic payment schedules.The major life and medical insuranceproducts we sell can be broadly classified into the categories set forth below.Dueto constant product innovation by insurance companies,some of the insuranceproducts we sell combine features of one or more of the categori

158、es listed below:Individual Health Insurance.Individual Annuity.Individual Endowment Life Insurance.We believe due to the PRCs rapidly aging population,high national savingsrate,sustained economic development,rising household income,strong support fromgovernment policies and regulations,and enhanced

159、risk protection awareness,HongKongs life and medical insurance sector will experience faster growth thanthe other insurance sectors,and currently we continue to allocate greaterresources to develop our life and medical insurance business.22024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390

160、024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm14/135Table of ContentsGeneral Insurance ProductsOur general insurance products,also known as property and casualty insuranceproducts,accounted for less than 1%of our net revenues for the fisc

161、alyears endedMarch31,2024 and 2023.For general insurance products purchased by our customers,we generally receive commissions from the insurance companies in the range of 8.0%57.5%of the premiums.The major general insurance products we offer orfacilitate to individual customers can be further classi

162、fied into the followingcategories:Individual Accident Insurance.Travel Insurance.Homeowner Insurance.Auto Insurance.MPF and ORSO ServicesThe MPF is a compulsory saving scheme(pension fund)for the retirement ofresidents in Hong Kong.Most employees and their employers are required tocontribute monthly

163、 to the MPF schemes provided by approved private organizationsbased on the salary and period of employment of the employee.ORSO schemes areretirement schemes set up voluntarily by employers to provide retirement benefitsfor their employees.MPF is the mainstream retire plan in HongKong.We introducecu

164、stomers to the service providers of the MPF and ORSO schemes approved by MPFA astrustees to administer the MPF and ORSO schemes.As of the date of this prospectus,there were a total 12 approved trustees in HongKong,four of which have signedagreements with us in connection with its provision of MPF re

165、lated services.As ofthe date of this prospectus,YeeTah has not provided any customer ORSO relatedservices.We assist employees who are HongKong residents to open personal accountswith a new approved trustee and employers in Hong Kong to set up corporateaccounts.We receive service fees in connection w

166、ith our MPF related services inthe range of 1.0%5.0%of the total investment transferred by anemployee/employer to the new trustee and are paid by the trustee once thetransaction is completed.We had serviced five and four customers with accountopening and transfer of funds across their respective MPF

167、 schemes during the fiscalyear ended March31,2024 and 2023,respectively.Referral BusinessIn December 2023,we strategically expanded our business model by enteringinto a collaborative partnership with a trust company in Hong Kong.Thispartnership allows us to refer potential clients,who are part of ou

168、r growingcustomer base,to the trust company for asset management services.In return forthese referrals,we will receive referral fees from these referred clients.Thismutually beneficial arrangement enables us to diversify our revenue streams whileproviding additional value to our customers by connect

169、ing them with trusted assetmanagement services.Implications of Being a Smaller Reporting CompanyWe are a“smaller reporting company”as defined in Rule 12b-2 of theExchange Act,and have elected to take advantage of certain of the scaleddisclosure available for smaller reporting companies.We will remai

170、n a smallerreporting company until the end of the fiscal year in which(1)we have a publiccommon equity float of more than$250million,or(2)we have annual revenues forthe most recently completed fiscal year of more than$100million and a publicfloat or a public float of more than$700 million.We also wo

171、uld not be eligiblefor status as a smaller reporting company if we become an investment company,anasset-backed issuer or a majority-owned subsidiary of a parent company that is nota smaller reporting company.We have elected to take advantage of certain of the reduced disclosureobligations in the reg

172、istration statement of which this prospectus is a part andmay elect to take advantage of other reduced reporting requirements in futurefilings.As a result,the information that we provide to our shareholders may bedifferent from what you might receive from other public reporting companies inwhich you

173、 hold equity interests.32024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm15/135Table of ContentsImplications of Being a“Controlled Company”Upon completion of this offering,Mr.Zheng

174、 will be the beneficial owner of anaggregate of _%of the voting power.As a result,we will be a“controlledcompany”within the meaning of the Nasdaq Stock Market Rules and therefore we areeligible for certain exemptions from the corporate governance listing requirementsof Nasdaq Listing Rules.For so lo

175、ng as we are a“controlled company”,we arepermitted to elect to rely on certain exemptions from corporate governance rules,including:an exemption from the rule that a majority of our board of directors mustbe independent directors;an exemption from the rule that the compensation of our chief executiv

176、eofficer must be determined or recommended solely by independent directors;andan exemption from the rule that our director nominees must be selected orrecommended solely by independent directors.Although we do not intend to rely on the“controlled company”exemption underthe Nasdaq Listing Rules,we co

177、uld elect to rely on this exemption in the future.As a result,you will not have the same protection afforded to shareholders ofcompanies that are subject to these corporate governance requirements.Our statusas a“controlled company”could cause our common stock to look less attractive tocertain invest

178、ors or otherwise harm the trading price of our common stock.Pleasesee“Risk Factors Risks Related to Our Securities As a“controlledcompany”under the rules of Nasdaq,we may choose to exempt our company fromcertain corporate governance requirements that could have an adverse effect on ourpublic shareho

179、lders.”Corporate StructureQDM is not an operating company but a Florida holding company with operationsprimarily conducted through its indirectly wholly-owned subsidiary based inHongKong.Our investors hold shares of Common Stock in QDM,the Florida holdingcompany.We do not have or intend to set up an

180、y subsidiary or enter into any contractualarrangements to establish a variable interest entity(“VIE”)structure with anyentity in China.Our corporate organizational structure is as follows as of thedate of this prospectus:42024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea02131

181、56-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm16/135Table of ContentsListing on NasdaqOur common stock is currently quoted on the OTCQB under the symbol“QDMI.”Inconnection with this offering,we intend to apply to list our common stock onNasdaq under the s

182、ymbol“QDMI.”If our listing application is approved,we expectto list our common stock on Nasdaq upon consummation of this offering,at whichpoint our common stock will cease to be traded on the OTCQB.No assurance can begiven that our listing application will be approved.The listing requirements ofNasd

183、aq include,among other things,a stock price threshold.As a result,prior toeffectiveness,we will need to take the necessary steps to meet the listingrequirements of Nasdaq.There can be no assurance that our common stock will belisted on a Nasdaq.Recent DevelopmentsOn October 4,2024,we filed an Articl

184、es of Amendment to Articles ofIncorporation of the Company with the Florida Division of Corporation to increaseour authorized shares of Series B preferred stock,par value$0.0001 per share(the“Series B Preferred Stock”),from 2,000,000 shares to 10,000,000 shares,whichbecame effective as of October 7,

185、2024.The foregoing amendment was approved by theBoard,in accordance with our Articles of Incorporation and the Florida BusinessCorporation Act.On October 9,2024,we entered into a securities subscription agreement(the“Securities Subscription Agreement”)with Huihe Zheng,our Chief ExecutiveOfficer,Pres

186、ident,and Chairman of the Board.Pursuant to the SecuritiesSubscription Agreement,we issued 6,000,000 shares of Series B Preferred Stock toMr.Zheng at a purchase price of$0.10 per share,in exchange for the cancellationby Mr.Zheng of a portion of the currently outstanding principal amount of the debto

187、wed by us to Mr.Zheng,in the amount of US$600,000,which was loaned by Mr.Zhengto us providing for our working capital and general corporate expenses.As a resultof the issuance of Series B Preferred Stock to Mr.Zheng,Mr.Zheng beneficiallyowns 81.0%of the aggregate voting power of us as of the date of

188、 this prospectus.Corporate InformationOur executive office is located at Room 1030B,10/F,Ocean Centre,HarbourCity,5 Canton Road,Tsim Sha Tsui,Hong Kong.Our telephone number is+85231889800.52024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archi

189、ves/edgar/data/1094032/000121390024096928/ea0213156-01.htm17/135Table of ContentsSUMMARY OF RISK FACTORSOur business is subject to multiple risks and uncertainties,as more fullydescribed in“Risk Factors”and elsewhere in this prospectus.We urge you to read“Risk Factors”and this prospectus in full.Our

190、 principal risks may be summarizedas follows:We are subject to risks and uncertainties related to our business and Company,including,but are not limited to,the following:Risks Related to Our Business and IndustryOur operating subsidiary derives a significant portion of revenues fromselling insurance

191、 products supplied by our major insurance companypartners and our business is subject to concentration risks arising fromdependence on a single or limited number of insurance company partners.All of our sales of life and medical insurance products and generalinsurance products are conducted through

192、our licensed technicalrepresentatives.If we are unable to attract and retain highly productivetechnical representatives,our business could be materially and adverselyaffected.Misconduct of the technical representatives may also have a materialadverse effect on our business,results of operations or f

193、inancialcondition.We are subject to extensive regulations for our insurance brokeragebusiness and operations in HongKong.Failure to obtain,renew,or retainlicenses,permits or approvals may affect our ability to conduct or expandour business.We face intense competition in the insurance intermediary in

194、dustry inHongKong.If we are unable to compete effectively with both existing andnew market participants,we may lose customers and our financial resultsmay be negatively affected.Our commission revenue is subject to quarterly fluctuations as a result ofthe seasonality of our business,the timing of po

195、licy renewals and the neteffect of new and lost business.The factors that cause the quarterlyvariations are not within our control.Risks Related to Doing Business in HongKongAdverse changes in economic and political policies of the PRC governmentcould have a material and adverse effect on overall ec

196、onomic growth inmainland China and HongKong,which could materially and adversely affectour business.In light of Chinas extension of its authority into Hong Kong,theChinese government can change HongKongs rules and regulations at anytime with little to no advance notice,and can intervene and influenc

197、e ouroperations and business activities in HongKong.We may become subject to a variety of laws and regulations in the PRCregarding privacy,data security,cybersecurity,and data protection.Wemay be liable for improper use or appropriation of personal informationprovided by our customers.We may rely on

198、 dividends and other distributions on equity paid by theHong Kong operating subsidiary to fund any cash and financingrequirements it may have,and any limitations or restrictions,prohibitions,interventions or limitations by the PRC government on theability of the Company or our HongKong operating sub

199、sidiary to transfercash or assets in or out of HongKong may result in these funds or assetsnot being available to fund operations or for other uses outside ofHongKong,which on the ability of the HongKong operating subsidiary tomake payments to the Company could have a material and adverse effect ont

200、he business.Trading in our securities may be prohibited under the HFCA Act if thePCAOB determines that it cannot inspect or investigate completely ourauditor.62024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/0001213

201、90024096928/ea0213156-01.htm18/135Table of ContentsIt may be difficult for shareholders to enforce any judgment obtained inthe United States against us,which may limit the remedies otherwiseavailable to our shareholders.Our business,financial condition and results of operations,and/or thevalue of ou

202、r Common Stock or our ability to offer or continue to offersecurities to investors may be materially and adversely affected to theextent the laws and regulations of the PRC become applicable to a companysuch as us.The enactment of the Law of the PRC on Safeguarding National Security inthe HongKong S

203、pecial Administrative Region could impact our HongKongoperating subsidiary.Risks Related to Our Securities and This Offering.Our CEO,President and Chairman of the board of directors,Mr.HuiheZheng,has a substantial influence over our Company.His interests may notbe aligned with the interests of our o

204、ther shareholders,and he couldprevent or cause a change of control or other transactions.We have considerable discretion as to the use of the net proceeds fromthis offering and we may use these proceeds in ways with which you may notagree.Because the market for our common stock is limited,persons wh

205、o purchaseour common stock may not be able to resell their shares at or above thepurchase price paid for them.We may be unable to list our common stock on Nasdaq.There is a limited market for our securities,which may make it moredifficult to dispose of our securities and we may fail to sustain tradi

206、ngon Nasdaq,which could make it more difficult for investors to sell theirshares.An active market for our common stock may never develop,and we are underno obligation to seek out a more active market for our common stock.As a“controlled company”under the rules of Nasdaq,we may choose toexempt our co

207、mpany from certain corporate governance requirements thatcould have an adverse effect on our public shareholders.To date,we have not paid any cash dividends,and no cash dividends willbe paid in the foreseeable future.Our articles of incorporation allow our Board to create one or more newseries of pr

208、eferred stock without approval by our shareholders,subject tothe limitations prescribed by law,which could adversely affect the rightsof the holders of our common stock.Any adverse effect on the market price of our common stock could make itdifficult for us to raise additional capital through sales

209、of equitysecurities at a time and at a price that we deem appropriate.Our future results may vary significantly which may adversely affect theprice of our common stock.We are a“smaller reporting company”under the JOBS Act,and we cannotbe certain if the reduced disclosure requirements applicable to s

210、mallerreporting companies will make our common stock less attractive toinvestors.Our disclosure controls and procedures are not effective and we haveidentified material weaknesses in our internal control over financialreporting.If securities or industry analysts do not publish research or reportsabo

211、ut our business,or if they publish a negative report regarding ourcommon stock,the price of our common stock and trading volume coulddecline.72024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea021

212、3156-01.htm19/135Table of ContentsTHE OFFERINGCommon Stock offered by us:shares of common stock.Shares of Common StockOutstandingprior to this offering 291,563,930 shares of common stock.Shares of Common Stock to beOutstanding after thisoffering shares of common stock(or sharesif the Representatives

213、 exercise their over-allotment option to purchase additional shares infull).Use of Proceeds We estimate that the net proceeds from ourissuance and sale of shares of ourcommon stock in this offering will beapproximately$,assuming an initialoffering price of$per share(the midpointof the price range se

214、t forth on the cover page),after deducting the underwriting discounts andcommissions and estimated offering expensespayable by us.If the Representatives exercisetheir over-allotment option to purchaseadditional shares in full to cover over-allotments,if any,we estimate that our netproceeds will be a

215、pproximately$.We currently anticipate using the net proceedsfrom this offering,together with our existingresources,for(i)expansion of serviceofferings,(ii)marketing and branding,(i)newhires and(iii)working capital and generalcorporate purposes.See the section titled“Useof Proceeds”for additional inf

216、ormation.Representative Warrants We have agreed to issue warrants to theRepresentatives(“Representative Warrants”)topurchase 5.0%of total number of the shares ofcommon stock(including the shares sold pursuantto the underwriters over-allotment option)soldin this offering.The Representative Warrantswi

217、ll have an exercise price equal to 100%of theoffering price of the common stock sold in thisoffering.The Representative Warrants areexercisable commencing six(6)months from theeffective date of the registration statement ofwhich this prospectus forms a part and willterminate five(5)years after the c

218、ommencementof sales in this offering.Underwriter Over-AllotmentOption We have also granted to the Representatives anoption,exercisable for 30days from the closingof this offering,to purchase up to an aggregateof additional shares of common stock atthe public offering price.Lock-up agreements We,our

219、directors,officers and any other holdersof five percent(5%)or more of the outstandingshares of common stock of the Company as of theeffective date of this registration statement(and all holders of securities exercisable for orconvertible into shares of common stock)haveagreed with the Representative

220、s not to offer,issue,sell,contract to sell,encumber,grantany option for the sale of or otherwise disposeof any securities of the Company for a period ofsixmonths after the closing of this offering.See“Underwriting”for more information.Dividend policy We have never paid dividends on the common stocka

221、nd do not anticipate that we will pay dividendsin the foreseeable future.We intend to use anyfuture earnings for the expansion of ourbusiness.Any future determination of applicabledividends will be made at the discretion of theBoard and will depend on the results ofoperations,financial condition,cap

222、italrequirements and other factors deemed relevant.See“Dividend Policy.”82024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm20/135Table of ContentsRisk Factors Investing in our commo

223、n stock involves a highdegree of risk.For a discussion of factors youshould consider in making an investment,see“Risk Factors”beginning on page 10.Proposed Nasdaq Listing Our common stock is currently quoted on theOTCQB.We intend to apply to have our commonstock listed on Nasdaq under the same symbo

224、l“QDMI”.There is no assurance that suchapplication will be approved.92024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm21/135Table of ContentsRISK FACTORSAn investment in our common

225、 stock involves a high degree of risk.Before makingan investment decision,you should carefully consider the following risk factors,which address the material risks concerning our business and an investment in ourcommon stock,together with the other information contained in this prospectus.Ifany of t

226、he risks discussed in this prospectus occur,our business,prospects,liquidity,financial condition and results of operations could be materially andadversely affected,in which case the trading price of our common stock could declinesignificantly,and you could lose all or part of your investment.Some s

227、tatements inthis prospectus,including statements in the following risk factors,constituteforward-looking statements.Please refer to the section entitled“CautionaryNoteRegarding Forward-Looking Statements.”Risks Related to Our Business and CompanyOur business is subject to concentration risks arising

228、 from dependence on asingle or limited number of insurance company partners.We derive a significant portion of revenues from selling insurance productssupplied by our major insurance company partners.For the fiscal year endedMarch31,2024,approximately 96.5%of our total commissions were attributed to

229、 oneinsurance company.For the fiscal year ended March31,2023,an aggregate of 99.1%of our total commissions were attributable to our top two insurance company partners,accounting for 91.1%and 8.0%of our total revenue,respectively.Because of this concentration in the supply of the insurance products w

230、e sell,our business and operations would be negatively affected if we experience a partialor complete loss of any of these insurance partners.In addition,any significantadverse change in our relationship with any of these insurance company partners couldresult in loss of revenue,increased costs and

231、distribution delays that could harmour business and customer relationships.If we fail to attract and retain productive technical representatives tosell the insurance products,our business and operating results could bematerially and adversely affected.All of our sales of life and medical insurance p

232、roducts and general insuranceproducts are conducted through our licensed technical representatives.We have beenactively recruiting and will continue to recruit technical representatives to joinour distribution and service network.Technical representatives have beeninstrumental to the development of

233、our life insurance business.As of August 16,2024,we had 12 technical representatives.Competition fortechnical representatives is intense and there can be no assurance that we will beable to attract and retain such personnel.If we are unable to attract and retainhighly productive technical representa

234、tives,our business could be materially andadversely affected.Misconduct of the technical representatives may have a material adverseeffect on our business,results of operations or financial condition.Misconduct of the technical representatives could result in regulatory sanctions,litigation or serio

235、us reputational or financial harm to us.Misconduct may include:the conduct during the course of sales and the use of methods ofsolicitation and advertising that violates the relevant laws and regulationsgoverning insurance industry or other applicable area of laws andregulations in HongKong;the use

236、of methods of solicitation and advertising that are not compatiblewith the integrity and dignity of the profession of insurance broking;use of any illustration,circular,memorandum or other material thatmisrepresents or is incomplete as regards the terms,benefits or advantagesof any insurance policy

237、issued or to be issued to a prospective customer;102024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm22/135Table of Contentsthe use of any incomplete or misleading comparison or ill

238、ustration of anypolicy or contract of insurance for the purpose of inducing an insured toforfeit or replace a policy or contract of insurance;the offer of any unlawful payment,allowance or gift as an inducement to anyprospective customer to insure through the technical representative;andholding out

239、to the public or advertising by means of advertisements,cards,circulars,letters,signs or other methods in an irresponsible,untruthfulor otherwise unlawful manner.Failure to prevent and detect misconduct may have a material adverse effect onour business,results of operations or financial condition.We

240、 are subject to extensive regulations for our insurance brokeragebusiness and operations and MPF intermediary business and operations.We conduct our business primarily in HongKong as a licensed insurance broker,and our business operations are subject to vigorous regulations in Hong Kongapplicable to

241、 licensed insurance brokers.Any failure to comply with applicable lawsor regulations could result in fines,censure,suspensions of personnel or othersanctions,including revocation of our license as an insurance broker.In addition,we are a registered MPF intermediary and subject to the relevant laws a

242、ndregulations.Even if a sanction imposed against us or our personnel is small inmonetary amount,the adverse publicity arising from the imposition of sanctionsagainst us by regulators could harm our reputation and impede our ability to retaincustomers and develop new customer relationships,which may

243、reduce our revenues.The regulatory landscape in the insurance industry in HongKong is subject toconstant evolution and changes.We face the risk of significant intervention byregulatory authorities from time to time,including increased registered capitalrequirements,extended training of the insurance

244、 agencies personnel,and adoptionof restrictive new regulations that can incur substantial costs on the Company.Ifany such new regulations and rules become effective and applicable to our business,these regulations may materially limit our business activities and operationalprofitability.Compliance w

245、ith changing regulation of corporate governance and publicdisclosure as a public company in the U.S.,and our managements limitedexperiences with such regulations,may result in additional expenses andcreate an increased risk of non-compliance.Changing laws,regulations and standards relating to corpor

246、ate governance andpublic disclosure,including the Sarbanes-Oxley Act of 2002 and related SECregulations,have created uncertainty for public companies and significantlyincreased the costs and risks associated with accessing the public markets and publicreporting.Our management team will need to inves

247、t significant management time andfinancial resources to comply with both existing and evolving standards for publiccompanies,which will lead to increased general and administrative expenses and adiversion of management time and attention from revenue generating activities tocompliance activities.In

248、addition,our management members who are located HongKonghave limited experience with compliance with U.S.laws(including securities laws).This inexperience may cause us to fall out of compliance with applicable regulatoryrequirements,which could lead to enforcement action against us and a negative im

249、pacton our stock price.Failure to obtain,renew,or retain licenses,permits or approvals mayaffect our ability to conduct or expand our business.We and the technical representatives are required to obtain applicable licenses,permits and approvals from different HongKong regulatory authorities in order

250、 toconduct or expand our business.The Insurance Authority of HongKong(“IA”)haspromulgated various regulations on the insurance business,including regulationsrequiring an insurance broker company license and technical representative license.For details,please see“Business Regulation Regulations Relat

251、ed to InsuranceIntermediaries.”We obtained,renewed and maintained our insurance broker companylicense as required by the IA.However,there is no assurance that the IA will notissue new regulations governing the insurance product and service industry that mightrequire us to obtain additional licenses,

252、permits or approvals for our current orfuture business operations.Our failure to obtain any such additional licenses,permits or approvals may adversely affect our business operations and financialcondition.112024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps

253、:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm23/135Table of ContentsCompetition in our industry is intense and,if we are unable to competeeffectively with both existing and new market participants,we may losecustomers and our financial results may be negatively affect

254、ed.The insurance intermediary industry in HongKong is intensely competitive,andwe expect competition to persist and further intensify as more insurance brokercompanies enter the market.In insurance product distribution,we face competitionfrom insurance companies that use their in-house sales force a

255、nd exclusive salesagents to distribute their products,from business entities that distribute insuranceproducts on an ancillary basis,such as commercial banks,as well as from othertraditional insurance intermediaries.Many of our competitors,both existing andnewly emerging,have greater financial and m

256、arketing resources than we do and may beable to offer products and services that we do not currently offer and may not offerin the future.If we are unable to compete effectively against those competitors,wemay lose customers and our financial results may be negatively affected.Because the commission

257、 we earn on the sale of insurance products is basedon premiums and commission rates set by insurance companies,any decreasein these premiums or commission rates may have an adverse effect on ourresults of operations.We are an insurance broker and derive revenues primarily from commissions paid bythe

258、 insurance companies whose policies our customers purchase.Our commission ratesare set by insurance companies and are based on the types and terms of the insuranceproducts.Commission rates and premiums can change based on the prevailing economic,regulatory,tax-related and competitive factors that af

259、fect insurance companies.These factors,which are not within our control,include the ability of insurancecompanies to place new business,underwriting and non-underwriting profits ofinsurance companies,consumer demand for insurance products,the availability ofcomparable products from other insurance c

260、ompanies at a lower cost,as well as thetax deductibility of commissions and the consumers themselves.Because we do not determine,and cannot predict,the timing or extent of premiumor commission rate changes,we cannot predict the effect any of these changes mayhave on our operations.Any decrease in pr

261、emiums or commission rates maysignificantly affect our profitability.Quarterly variations in our commission revenue may unexpectedly impact ourresults of operations.Our commission revenue is subject to quarterly fluctuations as a result of theseasonality of our business,the timing of policy renewals

262、 and the net effect of newand lost business.During any given year,our commission revenue derived fromdistribution of life and medical insurance products is highest during the fourthquarter and is lowest during the first quarter because it is customary for insurancecompanies in Hong Kong to launch pr

263、omotions in the fourth quarter in pursuit ofhigher sales by year end.The factors that cause the quarterly variations are notwithin our control.Specifically,regulatory changes to product design may result incessation of products from time to time and cause quarterly fluctuation in theresults of our o

264、perations.In addition,consumer demand for insurance products caninfluence the timing of renewals,new business and lost business,which generallyincludes policies that are not renewed,and cancellations,and many of our insuranceproducts last more than one year,contributing to the annual fluctuations in

265、 sales.As a result,quarterly or annual comparisons of our operating results may not be usedas an indication of our future performance.Our future success depends on the continuing efforts of our seniormanagement team and other key personnel,and our business may be harmed ifwe lose their services.Our

266、future success depends heavily upon the continuing services of the members ofour senior management team and other key personnel,in particular,Mr.Huihe Zheng,our President,Chief Executive Officer and Chairman.If our senior executives orother key personnel are unable or unwilling to continue in their

267、present positions,we may not be able to replace them easily,or at all.As such,our business may bedisrupted and our financial condition and results of operations may be materially andadversely affected.Competition for senior management and key personnel in theinsurance brokerage industry is intense b

268、ecause of a number of factors,including thelimited pool of qualified candidates.We may not be able to retain the services ofour senior executives or key personnel,or attract and retain high-quality seniorexecutives or key personnel in the future.In addition,if any member of our seniormanagement team

269、 or any of our other key personnel joins a competitor or forms acompeting company,we may lose customers,sensitive trade information,keyprofessionals and staff members.122024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/10940

270、32/000121390024096928/ea0213156-01.htm24/135Table of ContentsWe may not be able to ensure the accuracy and completeness of productinformation and the effectiveness of our recommendation of insuranceproducts.Our customers rely on the insurance product information we provide through ourtechnical repre

271、sentatives.While we believe that such information is generallyaccurate,complete and reliable,there can be no assurance that the accuracy,completeness or reliability of the information can be maintained in the future.Ifour technical representatives provide any inaccurate or incomplete information due

272、 toeither their own fault or that of our insurance partners,or we fail to presentaccurate or complete information of any insurance products which could lead to ourcustomers failure to get the protection or we being warned or punished byregulatory authorities,our reputation could be harmed and we cou

273、ld experiencereduced businesses,which may adversely affect our business and financialperformance.We may not be able to recommend suitable insurance products to our customers.Ourtechnical representatives may not fully understand the customers needs andrecommend suitable products to them.In addition,b

274、ecause the technicalrepresentatives are compensated based on premiums and commission rates,they may betempted to sell insurance products with higher commissions rather than those requiredby or suitable to the customers or prospective customers.If our customers arerecommended insurance products that

275、do not suit their protection needs,they may losetrust in the Company.Meanwhile,our insurance company partners may find ourrecommendation ineffective.Our customers may consequently be reluctant to continueto use our services,and our insurance company partners may be hesitant to continueto partner wit

276、h us.As a result,our business,reputation,financial performance andprospects will be materially and adversely affected.We may face potential liability,loss of customers and damage to ourreputation for any failure to protect the confidential information of ourcustomers.Our customer database holds conf

277、idential information concerning our customers.Wemay be unable to prevent third parties,such as hackers or criminal organizations,from stealing information provided by our customers.Confidential information of ourcustomers may also be misappropriated or inadvertently disclosed through insuranceagents

278、 misconduct or mistake.Such incidents may also amount to a non-complianceagainst the Personal Data(Privacy)Ordinance(Chapter 486 of the Laws ofHong Kong).See“Business Regulation Regulations Related to PersonalData.”We may also in the future be required to disclose certain confidentialinformation con

279、cerning our customers to government authorities.Any compromise of oursecurity 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 co

280、mpromised by outside sources or if we were accused of failingto protect the confidential information of our customers,we may be forced to expendsignificant financial and managerial resources in remedying the situation,defendingagainst these accusations and we may face potential liability.Any negativ

281、epublicity,especially concerning breaches in our cybersecurity systems,may adverselyaffect our public image and reputation.Though we take proactive measures to protectagainst these risks and believe that our efforts in this area are sufficient for ourbusiness,there can be no assurance that such meas

282、ures will prove effective againstall cybersecurity risks.We rely on dividends and other distributions on equity paid by oursubsidiaries to fund any cash and financing requirements we may have,andany limitation on the ability of our subsidiaries to make payments to uscould have a material adverse eff

283、ect on our ability to conduct ourbusiness.QDM is a holding company incorporated in Florida,and it relies on dividends andother distributions on equity paid by its subsidiaries for its cash and financingrequirements,including the funds necessary to pay dividends and other cashdistributions to its sha

284、reholders and service any debt it may incur.If any of QDMssubsidiaries incurs debt on its own behalf in the future,the instruments governingthe debt may restrict its ability to pay dividends or make other distributions toQDM.Under the current practice of the Inland Revenue Department of HongKong,no

285、taxis payable in HongKong in respect of dividends paid by our HongKong subsidiariesto us.See“Business Regulation Regulations Related to Hong KongTaxation.”Any limitation on the ability of our Hong Kong subsidiaries to paydividends or make other distributions to us could materially and adversely limi

286、t ourability to grow,make investments or acquisitions that could be beneficial to ourbusiness,pay dividends,or otherwise fund and conduct our business.132024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/0001213900240

287、96928/ea0213156-01.htm25/135Table of ContentsOur management has determined that our disclosure controls and proceduresare not effective and we have identified material weaknesses in ourinternal control over financial reporting.In connection with the preparation of our financial statements for thefis

288、cal years ended March 31,2024 and 2023,our management concluded that ourinternal control over financial reporting was not effective and we identified severalmaterial weaknesses.A material weakness is a deficiency,or a combination ofdeficiencies,in internal control over financial reporting such that

289、there is areasonable possibility that a material misstatement of our annual or interimfinancial statements will not be prevented or detected on a timely basis.Inaddition,as of March 31,2024,our management concluded that our disclosurecontrols and procedures were not effective due to the material wea

290、knesses in ourinternal control over financial reporting.The material weaknesses result from thefollowing:(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 aud

291、it committee.Each of the material weaknesses described above could result in a misstatement ofour accounts or disclosures that would result in a material misstatement of ourannual or interim consolidated financial statements that would not be prevented ordetected.We cannot assure you that any measur

292、es we may take in the future will besufficient to remediate the material weaknesses described above or avoid potentialfuture material weaknesses.If we are unable to report financial information timelyand accurately or to maintain effective disclosure controls and procedures,our stockprice could be n

293、egatively impacted and we could be subject to,among other things,regulatory or enforcement actions by the SEC.Risks Related to Doing Business in HongKongPolitical risks associated with conducting business in Hong Kong andeconomic instability in Hong Kong may adversely impact our results ofoperations

294、.We may also face the risk that changes in the policies of thePRC government could have a significant impact upon the business we conductin HongKong and the profitability of such business.Our operational activities are primarily conducted in HongKong.Accordingly,political and economic conditions in

295、Hong Kong and the surrounding region maydirectly affect our business.HongKong is a special administrative region of thePRC and the basic policies of the PRC regarding HongKong are reflected in the BasicLaw,namely,the constitutional document for HongKong,which provides HongKongwith a high degree of a

296、utonomy and executive,legislative and independent judicialpowers,including that of final adjudication under the principle of“one country,two systems”.However,there is no assurance that there will not be any changes inthe economic,political and legal environment in HongKong in the future.Since allof

297、our operations are primarily based in HongKong,any change of such politicalarrangements may pose an immediate threat to the stability of the economy inHongKong,thereby directly and adversely affecting our results of operations andfinancial positions.Our revenue is susceptible to ongoing incidents or

298、 factors which affect thestability of the social,economic and political conditions in HongKong.Any drasticevents may adversely affect the business operations of our Hong Kong operatingsubsidiary.Such adverse events may include changes in economic conditions andregulatory environment,social and/or po

299、litical conditions,civil disturbance ordisobedience,as well as significant natural disasters.Given the relatively smallgeographical size of HongKong,any of such incidents may have a widespread effecton the business operations of our HongKong operating subsidiary,which could inturn adversely and mate

300、rially affect our business,our results of operations andfinancial condition.Furthermore,legislative or administrative actions in respect ofChina-U.S.relations could cause investor uncertainty for affected issuers,including us,and the market price of our common stock could be adversely affected.In ad

301、dition,economic,political and legal developments and social conditions inthe PRC may significantly affect our business,financial condition,results ofoperations and prospects.The PRC economy is in transition from a planned economy toa market-oriented economy subject to plans adopted by the government

302、 that setnational economic development goals.Policies of the PRC government can havesignificant effects on economic conditions in the PRC and Hong Kong.While webelieve that the PRC will continue to strengthen its economic and tradingrelationships with foreign countries and that business development

303、in the PRC willcontinue to follow market forces,we cannot assure you that this will be the case.Our business operations and prospects,financial condition,and results of operationsmay be adversely affected by changes in policies by the PRC government,including:changes in laws,regulations or their int

304、erpretation;confiscatory taxation;142024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm26/135Table of Contentsrestrictions on currency conversion,imports or sources of supplies,orabi

305、lity to continue as a for-profit enterprise;expropriation or nationalization of private enterprises;andthe allocation of resources.Substantial uncertainties and restrictions with respect to the politicaland economic policies of the PRC government and PRC laws and regulationscould have a significant

306、impact upon the business that we conduct inHongKong and accordingly on the results of our operations and financialcondition.Although we have no operations in the PRC,nor do we have plan to expand ourbusiness to the PRC in foreseeable future,our business operations may be adverselyaffected by the cur

307、rent and future political environment in the PRC.The PRCgovernment has exercised and continues to exercise substantial control over virtuallyevery sector of the Chinese economy through regulation and state ownership.Theinterpretations of many laws,regulations and rules may not always be uniform and

308、theenforcement of these laws,regulations and rules may involve uncertainties for youand us.Our ability to operate in HongKong,conduct overseas offerings and continueto investment in HongKong based issuers may be harmed by these changes in its lawsand regulations,including those relating to taxation,

309、import and export tariffs,healthcare regulations,environmental regulations,land use and property ownershiprights,and other matters.Accordingly,government actions in the future,includingany decision not to continue to support recent economic reforms and to return to amore centrally planned economy or

310、 regional or local variations in the implementationof economic policies,could have a significant effect on economic conditions inHongKong or particular regions thereof,and could limit or completely hinder ourability to offer or continue to offer securities to investors or require us to divestourselv

311、es of any interest we then hold in HongKong properties or joint ventures.Any such actions(including divesture or similar actions)could result in a materialadverse effect on us and on your investment in us and could render our securities andyour investment in our securities worthless.There are substa

312、ntial uncertainties regarding the interpretation and applicationof the PRC laws and regulations,including,but not limited to,the laws andregulations governing our business,or the enforcement and performance of ourcontractual arrangements in the event of the imposition of statutory liens,death,bankru

313、ptcy or criminal proceedings.Only after 1979 did the Chinese government beginto promulgate a comprehensive system of laws that regulate economic affairs ingeneral,deal with economic matters such as foreign investment,corporateorganization and governance,commerce,taxation and trade,as well as encoura

314、geforeign 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 andregulations may not sufficiently cover all aspects of economic activities in China.Also,because these laws and regulations are rela

315、tively new,and because of thelimited volume of published cases and their lack of force as precedents,theinterpretation and enforcement of these laws and regulations involve significantuncertainties.New laws and regulations that affect existing and proposed futurebusinesses may also be applied retroa

316、ctively.In addition,there have been constantchanges and amendments of laws and regulations over the past 30years in order tokeep up with the rapidly changing society and economy in China.Because governmentagencies and courts that provide interpretations of laws and regulations and decidecontractual

317、disputes and issues may change their interpretation or enforcement veryrapidly with little advance notice at any time,we cannot predict the futuredirection of Chinese legislative activities with respect to either businesses withforeign investment or the effectiveness on enforcement of laws and regul

318、ations inChina.The uncertainties,including new laws and regulations and changes of existinglaws,as well as may cause possible problems to foreign investors.Although the PRC government has been pursuing economic reform policies for morethan two decades,the PRC government continues to exercise signifi

319、cant control overeconomic growth in the PRC through the allocation of resources,controlling paymentsof foreign currency,setting monetary policy and imposing policies that impactparticular industries in different ways.For example,according to the Circular onFurther Promoting the Facilitation of Indiv

320、idual Current Account Foreign ExchangeBusiness and its annexes issued and implemented by the State Administration ofForeign Exchange on March25,2021,the purchase of foreign exchange by individualsof mainland China shall not be used to purchase overseas life insurance or investmentdividend-returning

321、insurance.We cannot assure you that the PRC government willcontinue to pursue policies favoring a market-oriented economy or that existingpolicies will not be significantly altered,especially in the event of a change inleadership,social or political disruption,or other circumstances affectingpolitic

322、al,economic and social life in the PRC.152024/11/14 17:49sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htmhttps:/www.sec.gov/Archives/edgar/data/1094032/000121390024096928/ea0213156-01.htm27/135Table of ContentsThe enactment of the Law of the PRC on Safeguarding National Securi

323、ty inthe Hong Kong Special Administrative Region(the“Hong Kong NationalSecurity Law”)could impact our HongKong operating subsidiary.On June30,2020,the Standing Committee of the PRC National Peoples Congresspassed the HongKong National Security Law.HongKongs chief executive promulgatedthe law in Hong

324、Kong later the sameday.This law defines the duties and governmentbodies of the HongKong for safeguarding national security and four categories ofoffences secession,subversion,terrorist activities,and collusion with aforeign country or external elements to endanger national security and theircorrespo

325、nding penalties.On July14,2020,the former U.S.President Donald Trumpsigned the Hong Kong Autonomy Act,or HKAA,into law,authorizing theU.S.administration to impose blocking sanctions against individuals and entitieswho are determined to have materially contributed to the erosion of HongKongsautonomy.

326、The HKAA further authorizes secondary sanctions,including the impositionof blocking sanctions,against foreign financial institutions that knowingly conducta significant transaction with foreign persons sanctioned under this authority.Theimposition of sanctions may directly affect the foreign financi

327、al institutions aswell as any third parties or customers dealing with any foreign financial institutionthat is targeted.It is difficult to predict the full impact of the Hong KongNational Security Law and HKAA on HongKong and companies located in HongKong.Ifour HongKong operating subsidiary is deter

328、mined to be in violation of the HongKongNational Security Law or the HKAA by competent authorities,the business operations,our financial position and results of operations could be materially and adverselyaffected.Our business operations are located in Hong Kong,which renders usespecially sensitive

329、to local conditions and changes,such as those withrespect to laws and regulations,economic and political environments,forcemajeure events,natural disasters or mass civil movements.Currently,our business operations are based in HongKong,and we have no planto operate in other territories in the near f

330、uture.Our business operations aretherefore exposed to any deterioration in the economic,social and/or politicalconditions,significant changes in laws and regulations governing the insurancebrokerage services industry,as well as any change of legal system,incidence ofsocial movements,strike,riot,civi

331、l disturbances,mass civil movements,disobedience,recurrence of past outbreaks or epidemics,occurrence of any futureepidemic outbreaks,natural disasters or other catastrophic events in Hong Kong.Since our business operations are limited to Hong Kong,the aforesaid adversecircumstances may materially a

332、nd adversely disrupt operations of our insurancebrokerage services,and in turn,our revenues and profitability,and consequently,our results of operations and financial condition.Our Hong Kong subsidiaries may be subject to restrictions on payingdividends or making other payments to us,which may restr

333、ict its ability tosatisfy liquidity requirements,conduct business and pay dividends toholders of our common stock.Dividends payable to our foreign investors andgains on the sale of our shares of common stock by our foreign investorsmay become subject to tax by the PRC.QDM is a holding company incorporated in Florida with its operating subsidiarylocated in Hong Kong.Accordingly,most of our cash is