Financial Analysis

9. Commitments and Contingencies Other than two office leases both with a lease term of 3 years that the Company entered into in April 2023 (the 2023 Office Lease) and in February 2025 (the 2025 Office Lease) as described below, the Company did not have significant commitments, long-term obligations, or guarantees as of March 31, 2026. Operating lease The 2023 Office Lease has a remaining lease term of the operating lease of 0.1 year and discount rate used for the operating lease is 10.34%. The 2025 Office Lease has a remaining lease term of the operating lease of 1.9 years and discount rate used for the operating lease is 7.7%. During the years ended March 31, 2026 and 2025, the operating lease expense recognized was $124,408 and $127,946 respectively. 2023 Office Lease 2025 Office Lease Total 2027 6,441 38,128 44,569 2028 31,773 31,773 Total future minimum lease payments $ 6,441 $ 69,901 $ 76,342 Less: imputed interest (55 ) (4,904 ) (4,959 ) Total operating lease liability $ 6,386 $ 64,997 $ 71,383 Less: operating lease liability current 6,386 34,317 40,703 Total operating lease liability non current $ $ 30,680 $ 30,680 Contingencies The Company is subject to legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our business, financial position, cash flows …

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A summary of the Companys gross revenues disaggregated by major service lines for the years ended March 31, 2026 and 2025, respectively, are as follows: Fiscal Year Ended March 31, 2026 Fiscal Year Ended March 31, 2025 Service Type Revenue (US$) Percentage of Revenue Revenue (US$) Percentage of Revenue Insurance brokerage services 19,903,300 92.7 % 7,128,301 85.1 % Referral business 1,572,446 7.3 % 1,252,973 14.9 % Total Revenue 21,475,746 100.0 % 8,381,274 100.0 % …

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6. Income Taxes Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the Companys Hong Kong subsidiaries are subject to a 16.5% income tax on their taxable income generated from operations in Hong Kong. On December 29, 2017, Hong Kong government announced a two-tiered profit tax rate regime. Under the two-tiered tax rate regime, the first HK$2.0 million assessable profits will be subject to a lower tax rate of 8.25% and the excessive taxable income will continue to be taxed at the existing 16.5% tax rate. The two-tiered tax regime becomes effective from the assessment year of 2018/2019, which was on or after April 1, 2018. The application of the two-tiered rates is restricted to only one nominated enterprise among connected entities. BVI Under the current laws of the BVI, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no BVI withholding tax will be imposed. US Under the current Florida state and US federal income tax, the Company does not need to pay income taxes as Florida state does not levy income tax. The federal income tax is based on a flat rate of 21% for the calendar year of 2026 (2025: 21%). During the year ended March 31, 2026, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis for the first annual period beginning after December 15, 2024. Adoption did not affect the recognized amounts of income tax expense or r …

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Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Companys adopted ASU 2023-09 during the fiscal year ended March 31, 2026 and the adoption does not have a material impact on its financial statements and disclosures. In November 2024, FASB issued ASU 2024-03 Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Under ASU 2024-03, a public entity would be required to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. ASU 2024-03 allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. The Companys …

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5. Related Party Transaction Related Parties Name of related parties Relationship with the Company Huihe Zheng Principal shareholder, Chief Executive Officer and Chairman of the Company Related Party Transactions We had the following related party transactions for the fiscal years ended March 31, 2026 and 2025: (i) During the year ended March 31, 2026, no advances were made by Huihe Zheng to the Company. During the year ended March 31, 2025, Huihe Zheng advanced $129,056 to the Company to support its operations. (ii) During the year ended March 31, 2026, the Company paid $700,000 to Huihe Zheng in connection with a one-time special bonus in recognition of his past performance and contributions to the Company. During the year ended March 31, 2025, no payment was made by the Company to Huihe Zheng. (iii) During the year ended March 31, 2026, no repayment was made by the Company to Huihe Zheng. During the year ended March 31, 2025, the Company repaid $812,277 to Huihe Zheng. (iv) On October 9, 2024, the Company issued 6,000,000 Series B Shares to Huihe Zheng at a purchase price of $0.10 per share, in exchange for the cancellation by Mr. Zheng of a portion of the currently outstanding principal amount of the debt owed by the Company to Mr. Zheng, in the amount of US$600,000, which was loaned by Mr. Zheng to the Company providing for its working capital and general corporate expenses. Related Party Balance As of March 31, 2026 and March 31, 2025, the Company did not have any amoun …

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10. Segment Information The Company operates and manages its business as a single operating segment. This is consistent with the manner in which the CODM reviews financial information and makes decisions about resource allocation. The Companys CODM has been identified as the Chief Executive Officer, who reviews the Companys assets, operating results, and financial metrics as a whole to make decisions about allocating the Companys resources and assessing its financial performance. The CODM reviews the Companys operating results on a consolidated basis, focusing primarily on measures of revenue, operating income, and net income as presented in the accompanying condensed consolidated financial statements. The CODM uses these measures to evaluate the Companys overall performance and to make operating and strategic decisions. The Companys operations primarily consist of providing insurance brokerage services and referral business in Hong Kong. Since the Company operates in only one reportable segment, all financial information required by ASC 280 is presented in the accompanying consolidated financial statements. Substantially all of the Companys revenues are derived from customers located in Hong Kong and all of its long-lived assets are located in the same geographic areas. The Company operates as one operating and reportable segment, and as such the significant expenses regularly provided to the CODM are those presented on the statements of operations. These significant segment …

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2. Summary of significant accounting policies Basis of Presentation The Companys consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). Use of Estimates The preparation of the Companys consolidated financial statements in conformity with the U.S. GAAP requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported amounts of revenues and expenses may be affected by the estimates that management is required to make. Actual results could differ from those estimates. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The following are areas requiring significant judgements and estimates as of March 31, 2026 and March 31, 2025: allowance for credit loss, impairment of the prepaid expenses and deposits, etc. Foreign Currency and Foreign Currency Translation The Companys reporting currency is the United States Dollar (US$ or $). The Companys operations are principally conducted in Hong Kong where Hong Kong dollar is the functional currency. Transactions deno …

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3. Equity The Companys authorized capital stock consists of 700,000,000 shares of common stock, par value $0.0001 per share, and 30,000,000 shares of preferred stock, par value $0.0001 per share. As of March 31, 2026, there were 8,636,186 shares of common stock, 6,013,500 shares of Series B Preferred Stock and no shares of Series C Preferred Stock issued and outstanding. Series B Preferred Stock On October 4, 2024, the Company filed an Articles of Amendment to Articles of Incorporation of the Company with the Florida Division of Corporation to increase the Companys authorized shares of Series B preferred stock, par value $0.0001 per share (the Series B Shares), from 2,000,000 shares to 10,000,000 shares, which became effective as of October 7, 2024. Each Series B Share has a voting right equal to 100 shares of common stock of the Company, and Series B Share is not convertible into common stock, is not entitled to any dividend, and does not have redemption rights prior to the execution of the Shareholder Agreement with Mr. Zheng on October 1, 2025. Holders of Series B share have the co-sale right and right of first refusal and will not be required to sell their shares of Series B Preferred Stock on the same terms or conditions of a sale by a majority stockholder. However, holders of Series B Shares do not have pre-emptive rights. On October 9, 2024, the Company entered into a securities subscription agreement (the Securities Subscription Agreement) with Huihe Zheng, the Compan …

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11. Subsequent Events In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2026 through the date of issuance of the financial statements and has determined that it does not have any material subsequent events to disclose in these financial statements other than described below. On May 22, 2026, the Companys Board approved the QDM International Inc. 2026 Equity Incentive Plan (the 2026 Plan), which was subsequently registered through Form S-8 filed on June 2, 2026. The 2026 Plan is designed to attract, retain, and motivate directors, consultants, and key employees to exert their best efforts on behalf of the Company and align their interests with those of the Companys stockholders. Under the 2026 Plan, the Company has authorized the issuance of up to 1,295,427 shares of common stock for awards, subject to an automatic annual increase beginning January 1, 2027. As of June 29, 2026, the Company has not issued or granted any shares under the 2026 Plan. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing