Annual Report for Fiscal Year Ending March 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

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

Overview

From 2016 to 2020, we were a telemedicine company that provided Connect-a-Doc telemedicine kits to schools. Our services aimed to provide alternatives to schools that desired to provide a higher level of healthcare to their students but were unable to keep a full-time school nurse available. In 2020 this business was discontinued and we became a non-operating "shell" company until our acquisition of YeeTah, as more fully described below.

On October 21, 2020, we entered into the Share Exchange Agreement with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI, who is also our principal shareholder and serves as our Chairman and Chief Executive Officer, to acquire all the issued and outstanding capital stock of QDM BVI in exchange for the issuance to Mr. Zheng 900,000 shares of a newly designated Series C Preferred Stock, with each share of Series C Preferred Stock being convertible into approximately 3.67 shares of our Common Stock, subject to certain adjustments and limitations. The Share Exchange closed on October 21, 2020.

As a result of the consummation of the Share Exchange, we acquired QDM BVI and its indirect subsidiary, YeeTah, an insurance brokerage company that primarily markets and sells diversified insurance products, including property, life and social security insurance products, underwritten by insurance companies operating in Hong Kong to individual customers from Hong Kong SAR and mainland China. In addition, as a MPF intermediary, YeeTah also assists its customers with their investment through the MPF and the ORSO in Hong Kong, both of which are retirement protection schemes set up for employees. Following the closing of the transaction, we have assumed the business operations of QDM BVI and its subsidiaries.

On November 3, 2021, we acquired 100% of the issued and outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. We acquired QDMS through an intermediary holding company, Lutter Global Limited ("LGL"), which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole shareholder of QDMS. As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000 in November 2021 and at the same time the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to the Company for a consideration of US$1.00. As a result, we acquired a 100% ownership of LGL, which, in turn, owns 100% of QDMS. QDMS plans to engage in the research and development of customer relationship management ("CRM") software as a service ("SaaS"), with a business model derived from "customer-centered" CRM concept to improve enterprise-customers relationship. In October 2023, the Company sold QDMS to Mr. Huihe Zheng for no consideration following its decision not to pursue its plan to provide CRM SaaS Services.

In March 2023, we consummated the 2023 Offering, in which we issued and sold an aggregate of 289,104,000 shares of common stock at a price of $0.0081 per share to certain investors, generating gross proceeds of $2,339,937.

On October 4, 2023, we sold QDMS to Mr. Zheng for no consideration. As a result of the disposition, the Company recognized a gain of $33,165.

On March 28, 2024, we filed an Articles of Amendment to Articles of Incorporation 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 preferred stock, par value $0.0001 per share, from 5,000,000 shares to 30,000,000 shares; and (ii) effect a forward split of our issued and outstanding shares of common stock at a ratio of 10-for-1, which became effective as of April 5, 2024. The foregoing amendments were approved by the Board and shareholders holding approximately 60.9% of the voting power of the Company.

As a result of the 2024 Forward Stock Split, each issued and outstanding share of the Company's common stock prior to the effective time of the 2024 Forward Stock Spilt were split into ten shares of common stock and the total number of issued and outstanding shares of common stock increases from 29,156,393 shares to 291,563,930 shares. The 2024 Forward Stock Split had no impact on the Company's issued and outstanding shares of preferred stock other than that the conversion rate and voting rights of our Series C Convertible Preferred Stock were proportionately adjusted. On April 4, 2024, the 2024 Forward Stock Split was approved and announced by the Financial Industry Regulatory Authority with an effective date on April 5, 2024. All numbers in this report give effect to the 2024 Forward Stock Split unless indicated otherwise.

On October 4, 2024, we filed an Articles of Amendment to Articles of Incorporation of the Company with the Florida Division of Corporation to increase our authorized shares of Series B Preferred Stock from 2,000,000 shares to 10,000,000 shares, which became effective as of October 7, 2024. The foregoing amendment was approved by the Board, in accordance with our Articles of Incorporation and the Florida Business Corporation Act.

On October 9, 2024, we entered into the Securities Subscription Agreement with Huihe Zheng, our Chief Executive Officer, President, and Chairman of the Board. Pursuant to the Securities Subscription Agreement, we issued 6,000,000 shares of Series B Preferred Stock to Mr. 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 us to Mr. Zheng, in the amount of US$600,000, which was loaned by Mr. Zheng to us providing for our working capital and general corporate expenses. As a result of the issuance of Series B Preferred Stock to Mr. Zheng, Mr. Zheng beneficially owns 82.1% of the aggregate voting power of us as of the date of this report.

Results of Operations

Years Ended March 31, 2025 and 2024

The following table presents an overview of the results of operations for the years ended March 31, 2025 and 2024:

		For the Year Ended March 31,
		2025				2024
Revenue:
Insurance brokerage services		$	7,840,658			$	6,366,154
Referral business			540,616				-
Total revenue			8,381,274				6,366,154
Cost of sales			1,064,039				3,912,743
Gross profit			7,317,235				2,453,411
Operating expenses
General & administrative expenses		$	1,411,945			$	652,836
Total operating expenses			1,411,945				652,836
Income from operations			5,905,290				1,800,575
Total other income			4,423				73,006
Current income tax expenses			1,086,375				309,043
Net income		$	4,823,338			$	1,564,538

Revenue

Revenue increased by approximately $1.5 million, or 23.2%, for the year ended March 31, 2025 as compared to the same period of 2024. The increase was mainly due to (i) expansion of our collaboration with insurance partners in fiscal year 2025, (ii) increase in the number of insurance policies that generate commissions for us and (ii) the incremental revenue from referral fees paid by a trust company in Hong Kong. This growth was partially offset by the decrease in revenue from one of the existing insurance company partners, as a substantial portion of the revenue from this partner in the fiscal year of 2025 was derived from insurance renewal commissions, which are based on the renewal commission rate that is lower than the first-year commission rate. In addition, we expanded our collaboration with insurance partners in 2025. Moreover, we have strategically expanded our business model by entering into a collaborative partnership with a trust company in Hong Kong. Under this arrangement, we referred clients to the trust company for investment products and, in return, earned commissions based on a percentage of the value of the investment products purchased by the referred clients as revenue.

Cost of sales

The amounts decreased by approximately $2.8 million or 72.8% for the year ended March 31, 2025 as compared to the same period of 2024. The decrease was primarily due to lower referral fees paid. On May 22, 2024, the Hong Kong Insurance Authority issued a circular, which mandated, among other things, that referral fees for introducing clients should not be excessively high and should be consistent with the work the referrers provide. In compliance with this regulatory directive, we lowered our referral fee rates from approximately 52.5% to approximately 10%, which resulted in the significant decrease in cost of sales and increase in revenue.

Gross profit

Gross profit margin increased by approximately 48.8% for the year ended March 31, 2025 as compared to the same period of 2024, which was in line with the significant decrease in cost of sales.

General and administrative expenses

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

General and administrative expenses increased by approximately $759,000, or 116.3%, for the year ended March 31, 2025 as compared to the same period of 2024. The change is primarily due to hiring of more employees and technical representatives and increase in professional fees paid to various service providers.

Other income

Other income decreased by approximately $69,000, or 93.9%, for the year ended March 31, 2025 as compared to the same period of 2024. The income was mainly attributable to the receipt of referral fees from introducing clients to sub-brokers in Macao, partially offset by the payment of bank charges. The change is primarily due to the recognition of a gain from the disposal of subsidiaries during the fiscal year of 2024, with no such income recognized in the same period of 2025, as well as a reduction in referral fees received from sub-brokers.

Current income tax expenses

Current income tax expenses increased by approximately $777,000, or 251.5%, for the year ended March 31, 2025 as compared to the same period of 2024. The change is primarily due to increase in profits in the year ended March 31, 2025.

Net income

As a result of the factors described above, net income for the year ended March 31, 2025 increased by approximately $3.3 million, or 208.3%, as compared to a net income of approximately $1.6 million for the same period for 2024.

Foreign Currency and Foreign Currency Translation

The Company's reporting currency is the United States Dollar ("US$" or "$"). The Company's operations are principally conducted in Hong Kong where Hong Kong dollar is the functional currency.

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

The exchanges rates used for translation from Hong Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system in Hong Kong. This pegged rate was used to translate Company's balance sheets, income statement items and cash flow items for both the years ended March 31, 2025 and 2024.

Liquidity and Capital Resources

Our working capital requirements mainly comprise of commissions paid to technical representatives and referral fees, operating lease payments and employee salaries. We have financed our operations primarily through cash generated by operating activities, equity financings and advances from our principal shareholder. QDM is a holding company and conducts substantially all of its operations through YeeTah, which is its only entity that has operating cash inflows. Our expenses are paid by the cash provided by our operating activities.

YeeTah is a licensed insurance broker company in Hong Kong and subject to certain Hong Kong insurance broker requirements regarding its share capital and net assets. According to the requirements, a licensed insurance broker company must at all times maintain a paid-up share capital of not less than US$64,103 (HK$500,000) and net assets of not less than US$64,103 (HK$500,000), subject to the phase-in transitional arrangement applicable to specified insurance broker companies, including YeeTah, pursuant to which, YeeTah is required to maintain the amount of paid-up share capital and net assets of (i) not less than US$12,821 (HK$100,000) for the period from September 23, 2019 to December 31, 2021 and (ii) not less than US$38,462 (HK$300,000) for the period from January 1, 2022 to December 31, 2023. YeeTah was in compliance with the applicable minimum paid-up share capital and net assets requirements as of March 31, 2025.

There have been no cash and any asset transactions between QDM and our subsidiaries since the Share Exchange. As of March 31, 2025 and March 31, 2024, we had $8,557,305 and $5,158,223, respectively, in cash and cash equivalents, which primarily consisted of cash deposited in banks.

		Year Ended March 31, 2025				Year Ended March 31, 2024
Net cash provided by operating activities		$	4,082,303			$	2,208,037
Net cash used in investing activities			-				(100,241	)
Net cash (used in) provided by financing activities			(683,221	)			332,886
Effect of Exchange rate changes on cash			-				(204	)
Net increase in cash, cash equivalents			3,399,082				2,440,478
Cash and cash equivalents at beginning of period			5,158,223				2,717,745
Cash and cash equivalents at end of period		$	8,557,305			$	5,158,223

Operating Activities:

Net cash generated from operating activities was approximately $4.1 million for the year ended March 31, 2025, compared to net cash generated from operating activities of approximately $2.2 million for the same period in 2024, representing an increase of approximately $1.9 million in the net cash inflow in operating activities. The increase in net cash generated from operating activities was primarily due to an increase of net income of approximately $3.3 million in the year ended March 31, 2025 as compared to the same period of 2024. The significant increase in net income was primarily driven by a substantial reduction in cost of sales, which was mainly attributable to lower referral fees paid to the referrers. The increase in operating cash flow also reflects the following major working capital changes:

	(1)	Increase in accounts receivable resulted in an approximately $1.5 million cash outflow for the year ended March 31, 2025 compared to an approximately $108,000 cash inflow for the same period of 2024, which led to an approximately $1.6 million increase in net cash outflow from operating activities.
	(2)	Decrease in accounts payable and accrued liabilities resulted in an approximately $281,000 cash outflow for the year ended March 31, 2025 compared to an approximately $344,000 cash inflow for the same period of 2024, which led to an approximately $625,000 increase in net cash outflow from operating activities.
	(3)	Increase in short-term and long-term prepaid expenses resulted in an approximately $68,000 cash outflow for the year ended March 31, 2025 compared to an approximately $116,000 cash outflow for the same period of 2024, which led to an approximately $48,000 decrease in net cash outflow from operating activities. The increase in prepaid expenses was primarily due to a substantial commission prepayment to a newly contracted referrer. During this period, the Company prepaid HK$1,000,000 (US$128,205) to this referrer for future referral fees payable. As of March 31, 2025, the outstanding prepaid balance to this referrer was HK$773,116 (US$99,117), and the prepaid amount was subsequently fully credited against the referral fees payable to the referrer in April 2025.

(4)

Increase in income tax payable resulted in an approximately $1.1 million cash inflow for the year ended March 31, 2025 compared to an approximately $309,000 cash inflow for the same period of 2024, which led to an approximately $777,000 increase in net cash inflow from operating activities.

Investing Activities:

Net cash used in investing activities was nil for the year ended March 31, 2025 compared to net cash used in investing activities of approximately $100,000 for the same period of 2024. Net cash used in investing activities for the year ended March 31, 2024 was solely attributable to acquisitions of fixed assets and disposition of subsidiaries.

Financing Activities:

Net cash used in financing activities was approximately $683,000 for the year ended March 31, 2025, which was solely attributable to the net repayment to related parties.

Net cash generated from financing activities was approximately $333,000 for the year ended March 31, 2024, which was fully attributable to shareholder advances to the Company during the period.

Material Commitments

We have no material commitments for the next twelve months.

We had two office lease agreements and our lease commitments as of March 31, 2025 are summarized as follows:

Operating lease

		2023 Office Lease				2025 Office Lease				Total
2026			88,744				38,128				126,872
2027			6,441				38,128				44,569
2028			-				31,773				31,773
Total future minimum lease payments		$	95,185			$	108,029			$	203,214
Less: imputed interest			(5,457	)			(11,249	)			(16,706	)
Total operating lease liability		$	89,728			$	96,780			$	186,508
Less: operating lease liability - current			83,342				31,783				115,125
Total operating lease liability - non current		$	6,386			$	64,997			$	71,383

Critical Accounting Estimates

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

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

Off-balance Sheet Commitments and Arrangements

As of March 31, 2025, the Company did not have any material off-balance sheet arrangements that had or were reasonably likely to have any effect on their respective financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.