{"url_path":"/sec/qdmi/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-29","source_url":"https://www.sec.gov/Archives/edgar/data/1094032/0001213900-26-073119-index.html","accession_number":"0001213900-26-073119","cik":"0001094032","ticker":"QDMI","issuer_name":"QDM International Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1094032/0001213900-26-073119-index.html","primary_entity_key":"0001094032","primary_entity_name":"QDM International Inc."},"word_count":16747,"has_tables":true,"body_markdown":"**Item 1. Business.**\n\n** **\n\n**Overview** \n\n \n\nQDM is a holding company incorporated in Florida\nwith no material operations of its own, and we conduct our insurance brokerage business through our indirectly wholly-owned subsidiary,\nYeeTah, primarily in Hong Kong.\n\n \n\nYeeTah sells a wide range of insurance products\nconsisting of two major categories: (i) life and medical insurance, such as individual life insurance; and (ii) general insurance, such\nas automobile insurance, commercial property insurance, liability insurance and homeowner insurance. In addition, as a Mandatory Provident\nFund (“MPF”) intermediary, YeeTah is also licensed to provide customers with assistance on information collection, explanation\nof MPF products and policies (excluding investment advisory services), assistance with applications to set up MPF accounts, and transfer\nof funds across their respective MPF schemes. The MPF and the Occupational Retirement Schemes Ordinance (“ORSO”) in\nHong Kong are retirement protection schemes set up for employees who are Hong Kong residents.\n\n \n\nYeeTah sells insurance\nproducts underwritten by insurance companies operating in Hong Kong to individual customers who are either Hong Kong residents or visitors\nfrom mainland China and is compensated for its services by commissions paid by insurance companies, typically based on a percentage of\nthe premium paid by the insured. Commissions generally depend on the type and term of insurance products and the particular insurance\ncompany, and they are usually paid by the insurance companies the next month after the cooling off period of the policies sold, which\nis generally 21 days after the earlier of the delivery of the policy or the delivery of the cooling off notice to the policy holder, during\nwhich period policy purchasers may cancel the policy at their discretion and receive refunds.\n\n \n\nAs of the date of this\nReport, YeeTah is a party to agreements with 24 insurance companies in Hong Kong, and offers approximately 629 insurance products to its\nindividual customers. For the fiscal year ended March 31, 2026, approximately 31.3%, 26.1% and 11.6% of YeeTah’s total commissions\nwas attributable to three insurance company, respectively. For the fiscal year ended March 31, 2025, approximately 68.1% and 12.4% of\nYeeTah’s total commissions was attributable to two insurance companies, respectively.\n\n \n\nDuring the fiscal year\nended March 31, 2026 and March 31, 2025, YeeTah had a total of 880 and 263 customers who purchased life and medical insurance\nproducts through YeeTah, and 9 and 36 individual customers who purchased general insurance products, as well as one and five customers\nfor MPF related services, respectively. As of the date of this Report, YeeTah has not provided any customer ORSO related services.\n\n \n\nAs an independent insurance\nbroker, YeeTah offers not only a broad range of insurance products underwritten by multiple insurance companies to address the diverse\nneeds and preferences of increasingly sophisticated customers but also provides a range of quality services covering insurance policy\napplication, customer information collection, analysis of policy selection, and after-sale services.\n\n \n\nYeeTah focuses on offering\nlong-term life insurance products including endowment life and annuity life insurance and distributes general insurance products including\nautomobile insurance, individual accident insurance, homeowner insurance, liability insurance and travel insurance. All of YeeTah’s\nsales of life and medical insurance products and general insurance products are conducted through its licensed salespersons (known in\nHong Kong as technical representatives).\n\n \n\nHong Kong’s independent\ninsurance intermediary market is experiencing rapid growth due to increasing demands for insurance products by the Chinese population,\nespecially visitors from mainland China. Although we do not sell any insurance products in mainland China or solicit any customer in mainland\nChina, we intend to grow our business by offering premium services and recruiting talent to join our professional team and sales force,\nexpanding our distribution network through building more connections with business partners in Hong Kong and mainland China, such as wealth\nmanagement companies, funds, trust companies, and overseas immigration agencies.\n\n \n\n1\n\n \n\n \n\n**Holding Company Structure**\n\n \n\nQDM is not an operating company but a Florida\nholding company with operations primarily conducted through its indirectly wholly-owned subsidiary based in Hong Kong. Our investors hold\nshares of common stock in QDM, the Florida holding company.\n\n \n\nWe do not have or intend to set up any subsidiary\nor enter into any contractual arrangements to establish a variable interest entity (“VIE”) structure with any entity in China.\nOur corporate organizational structure is as follows as of the date of this Report:\n\n \n\n \n\n \n\nOur holding company structure presents unique\nrisks as our investors may never directly hold shares in our Hong Kong operating subsidiary and we will be dependent upon dividends and\nother distributions from our subsidiaries to finance our cash flow needs. Our ability to receive dividends and other contributions from\nour subsidiaries may be significantly affected by regulations promulgated by Hong Kong and PRC authorities. Any change in the interpretation\nof existing rules and regulations or the promulgation of new rules and regulations may materially affect our operations and or the value\nof our securities, including causing the value of our securities to significantly decline or become worthless. For a detailed description\nof the risks facing the Company associated with our structure, please refer to “*Item 1A. Risk Factors – Risks Related to\nDoing Business in Hong Kong.*”\n\n \n\nCurrently, PRC laws and regulations do not prohibit\ndirect foreign investment in our Hong Kong operating subsidiary. Nonetheless, in light of the statements and regulatory actions by the\nPRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership\nof companies incorporated in mainland China operating in certain industries, which are constantly evolving, and anti-monopoly concerns,\nwe may be subject to the risks of the uncertainty of any future actions of the PRC government in this regard, which would likely result\nin a material change in our operations, including our ability to continue our existing holding company structure, carry on our current\nbusiness, accept foreign investments, and offer or continue to offer securities to our investors, and the resulting adverse change in\nvalue to our common stock. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the China\nSecurities Regulatory Commission, or CSRC, if we fail to comply with such rules and regulations, which would likely adversely affect the\nability of the Company’s securities to continue to trade on the OTCQB Venture Market operated by the OTC Markets Group Inc. (the\n“OTCQB”), which would likely cause the value of our securities to significantly decline or become worthless.\n\n \n\n2\n\n \n\n \n\n**The Holding Foreign Companies Accountable Act** \n\n \n\nThe Holding Foreign Companies Accountable Act\n(the “HFCA Act”) was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed\naudit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight\nBoard of the United States (the “PCAOB”) for three consecutive years beginning in 2021, the SEC shall prohibit the\ncompany’s shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.\n\n \n\nOn December 16, 2021, the PCAOB, issued a report\nto notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms\nheadquartered in mainland China and Hong Kong. Our auditor, ZH CPA, LLC (“ZH CPA”), the independent registered public accounting\nfirm that issues the audit report included in this Report, is headquartered in Denver, Colorado, and has been inspected by the PCAOB on\na regular basis, with the last inspection in 2025. As of the date of this Report, our auditor is not among the firms listed on the PCAOB\nDetermination List issued in February 2025. On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and the Ministry\nof Finance of the PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting\nfirms headquartered in mainland China and Hong Kong completely, consistent with U.S law, rules, and regulations. On December 15,\n2022, the PCAOB vacated its previous Determination List, which concluded in December 2021 that the PCAOB could not inspect or investigate\ncompletely registered public accounting firms based in mainland China or Hong Kong. However, if in the future the PCAOB is prohibited\nfrom conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong,\nthen the companies audited by those registered public accounting firms could be subject to a trading prohibition on U.S. markets\npursuant to the HFCA Act. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland\nChina and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and\ninvestigate completely accounting firms in certain jurisdictions and we use an accounting firm headquartered in one of such jurisdictions\nto issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following\nthe filing of the annual report on Form 10-K for the relevant fiscal year. On December 29, 2022, the Consolidated Appropriations Act,\n2023 was signed into law, which, among others, amended the HFCA Act to reduce the number of consecutive years an issuer can be identified\na Commission-Identified Issuer before the SEC must impose an initial trading prohibition on the issuer’s securities from three years\nto two. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if\nwe were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act. See “*Item\n1.A. Risk Factors — Risks Related to Doing Business in Hong Kong — The HFCA Act and the related regulations continue to evolve.\nFurther implementations and interpretations of or amendments to the HFCA Act or the related regulations, or a PCAOB determination of its\nlack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us*.” on page 37.\n\n \n\n**Transfers of Cash and Other Assets to and from Our Subsidiaries**\n\n \n\nQDM is a holding company incorporated in Florida\nwith no material operations of its own, and we primarily conduct our insurance brokerage business through our indirectly wholly-owned\nsubsidiary, YeeTah, in Hong Kong. We may rely on dividends and other distributions on equity to be paid by our Hong Kong operating subsidiary,\nYeeTah, to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our\nshareholders, to service any debt we may incur and to pay our operating expenses. Currently, substantially all of our operations are in\nHong Kong. We do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure with\nany entity in mainland China. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong\nKong are reflected in the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (the “Basic\nLaw”), providing Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including\nthat of final adjudication under the principle of “one country, two systems.” The laws and regulations of the PRC do not currently\nhave any material impact on transfer of cash from us to YeeTah or from YeeTah to us and the investors in the U.S. In addition, there are\nno restrictions or limitations under the laws of Hong Kong imposed on the conversion of Hong Kong dollar into foreign currencies and the\nremittance of currencies out of Hong Kong or across borders and to U.S. investors.\n\n \n\n3\n\n \n\n \n\nWe are permitted under the Florida law to provide\nfunding to our subsidiaries, including YeeTah, through loans or capital contributions without restrictions on the amount of the funds.\nThere are no restrictions or limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the\nU.S. investors or to settle amounts owed. YeeTah is permitted under the laws of Hong Kong to provide funding to QDM HK and QDM BVI, the\nholding company incorporated in Hong Kong and the British Virgin Islands, respectively, through dividend or other distribution without\nrestrictions on the amount of the funds, subject to availability of distributable profits and sufficient cash to maintain going concern\nand solvency of YeeTah and any contractual obligations owed to third parties prohibiting or restricting dividend distributions. As of\nthe date of this Report, there has been no dividends or distributions between our holding company and our subsidiaries nor do we expect\nsuch dividends or distributions to occur in the near future among our holding company and its subsidiaries.\n\n \n\nHowever, the PRC government has significant authority\nto intervene or influence the operations of an offshore holding company in mainland China at any time, and such oversight may also extend\nto our Hong Kong operating company. We cannot assure you that the PRC government will not prevent us from transferring the cash we maintain\nin Hong Kong outside of Hong Kong, or restrict our ability to deploy our cash into business or to pay dividends. We could also be subject\nto limitations on the transfer or the use of our cash if we expand our business operations into mainland China or conduct our operations\nin some other ways such that we become subject to PRC laws that regulate these activities. In addition, if YeeTah incurs debt on its own\nbehalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.\nAny limitation on our ability to transfer or use our cash could materially and adversely limit our ability to grow, make investments or\nacquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.\n\n \n\nWe have never paid or declared any cash dividends\non our common stock. We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of\nour business and do not anticipate paying cash dividends in the near future. The declaration of dividends on any class of shares is within\nthe discretion of our board of directors (the “Board”), subject to the Florida law, out of legally available funds, and will\ndepend on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. If we determine\nto pay dividends on any of our capital stock in the future, we will be dependent on receipt of funds from our Hong Kong operating subsidiary,\nYeeTah. None of our subsidiaries has made any dividends or distributions to us. Under the current practice of the Inland Revenue Department\nof Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. There are no restrictions or limitation under the laws\nof Hong Kong imposed on the conversion of HKD into foreign currencies and the remittance of currencies out of Hong Kong. See\n“*Item 1A. Risk Factors – Risks Related to Our Business and Industry – We rely on dividends and other distributions\non equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries\nto make payments to us could have a material adverse effect on our ability to conduct our business*” on page 32 and “*Item\n1A. Risk Factors – Risks Related to Doing Business in Hong Kong* - *Our Hong Kong subsidiaries may be subject to restrictions\non paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business\nand pay dividends to holders of our common stock. Dividends payable to our foreign investors and gains on the sale of our shares of common\nstock by our foreign investors may become subject to tax by the PRC*” on page 35.\n\n** **\n\n**Regulatory Permissions and Developments**\n\n** **\n\nOur PRC counsel has advised us that the laws and\nregulations of mainland China do not currently have any material impact on our business, financial condition or results of operations.\nHowever, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the\nfuture. If there is a significant change to current political arrangements between mainland China and Hong Kong, companies operating in\nHong Kong such as us may face similar regulatory risks as those operated in mainland China, including their ability to offer securities\nto investors, list their securities on a U.S. or other foreign exchange, conduct their business or accept foreign investment. In light\nof the PRC government’s expansion of authority in Hong Kong, there are risks and uncertainties which we cannot foresee for the time\nbeing, and rules and regulations in mainland China and Hong Kong can change quickly. The Chinese government may intervene or influence\nour current and future operations in Hong Kong or may exert more control over offerings conducted overseas and/or foreign investment in\nissuers like ourselves. See “*Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong*.”\n\n \n\n4\n\n \n\n \n\nThe PRC government initiated a series of regulatory\nactions and statements to regulate business operations in certain areas in mainland China with little advance notice, including cracking\ndown on illegal activities in the securities market, enhancing supervision over mainland China-based companies listed overseas using variable\ninterest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly\nenforcement.\n\n \n\nFor example, on June 10, 2021, the Standing Committee\nof the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data\ncollection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing\nactivities must be conducted based on data classification and hierarchical protection system for data security.\n\n \n\nThe General Office of the Central Committee of\nthe Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on\nIllegal Securities Activities, which were available to the public on July 6, 2021. These opinions emphasized the need to strengthen\nthe administration over illegal securities activities and the supervision on overseas listings by mainland China-based companies. These\nopinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks\nand incidents facing mainland China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. Moreover,\nthe State Internet Information Office issued the Measures of Cybersecurity Review (Revised Draft for Comments, not yet effective) on July 10,\n2021, which require operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity\nreview with the Office of Cybersecurity Review.\n\n \n\nOn December 28, 2021, the Cyberspace Administration\nof China (the “CAC”) jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which\ntook effect on February 15, 2022, replacing the former Measures for Cybersecurity Review (2020) issued on July 10, 2021.\nMeasures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products\nand services, and online platform operators (together with the operators of critical information infrastructure, the “Operators”)\ncarrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online\nplatform operator who controls more than one million users’ personal information must undergo a cybersecurity.\n\n \n\nOn July 7, 2022, the CAC issued the Measures\nfor the Security Assessment of Cross-border Transfer of Data, which stipulates that data processor who provides overseas the important\ndata collected and generated during operations within the PRC and personal information that shall be subject to security assessment shall\nconduct a security assessment. Furthermore, if the data processor provides data overseas and meets one of the following circumstances,\nit shall declare the security assessment: (i) where a data processor provides critical data abroad; (ii) where a key information\ninfrastructure operator or a data processor processing the personal information of more than one million people provides personal information\nabroad; (iii) where a data processor has provided personal information of 100,000 people or sensitive personal information of 10,000\npeople in total abroad since January 1 of the previous year; and (iv) other circumstances prescribed by the CAC for which declaration\nfor security assessment for outbound data transfers is required.\n\n \n\nOn February 17, 2023, with the approval of\nthe State Council, the CSRC promulgated the Trial Measures and five supporting guidelines, which came into effect on March 31, 2023.\nOn May 16, 2023 and May 7, 2024, the CSRC promulgated the supporting guidelines No. 6 and No. 7 to the Trial Measures, respectively. Pursuant\nto the Trial Measures and their supporting guidelines, (i) domestic companies incorporated in mainland China that seek to offer or\nlist securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of\nthe Trial Measures within three working days following their submission of initial public offerings or listing applications. If a\ndomestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its\nfiling documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings and fines, and\nits controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject\nto administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria, the overseas offering\nand listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a domestic company: (A) more than\n50% of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated\nfinancial statements for the most recent fiscal year is accounted for by domestic companies; and (B) the majority of the issuer’s\nbusiness activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority\nof its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of\nresidence located in mainland China; and (iii) domestic companies listed on overseas over-the-counter markets are not required to file\nwith the CSRC in accordance with the Trail Measures; however, domestic companies that seek to offer or list securities in overseas markets\nthrough an uplisting shall file with the CSRC pursuant to the requirements of the Trial Measures within three working days following their\nfirst submission of uplisting applications. In such circumstances, where a domestic company is seeking an indirect overseas offering and\nlisting in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with\nthe CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit\nfilings with the CSRC within three business days after such application is submitted.\n\n \n\n5\n\n \n\n \n\nOn February 24, 2023, the CSRC, together\nwith the Ministry of Finance of China, National Administration of State Secrets Protection and National Archives Administration of China,\nrevised the Provisions on Strengthening Confidentiality and Archive Administration in Overseas Issuance and Listing of Securities issued\nby the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised\nProvisions were issued under the title Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities\nOffering and Listing by Domestic Companies,” (the “Revised Provisions”) and became effective on March 31, 2023\ntogether with the Trial Measures. One of the major revisions to the revised Provisions is to expand their application to cover indirect\noverseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a\ndomestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant\nindividuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials\nthat contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according\nto law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly\nor indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities\ncompanies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental\nto national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.\n\n \n\nOn March 22, 2024, the CAC issued the Provisions\non Promoting and Regulating Cross-border Data Flows, which stipulates that a data handler providing personal information abroad may be\nexempted from declaring security assessment for data to be provided abroad, concluding a standard contract for personal information to\nbe provided abroad or passing authentication for protection of personal information if it satisfies certain conditions. In addition, providing\nthe data collected and generated in such activities as international trade, cross-border transport, academic cooperation, transnational\nmanufacturing and marketing, which do not contain personal information or important data, to overseas parties is exempted from all these\nprocedures aforementioned.\n\n \n\nExcept for the Basic Law, national laws of the\nPRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.\nNational laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense\nand foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong. We are advised by our PRC counsel that,\nPRC national laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III of the\nBasic Law and do not apply directly to our Hong Kong subsidiaries.\n\n \n\nOur PRC counsel has advised us that that we are\nnot currently required to obtain any permission or approval from the CSRC, the CAC or any other regulatory authority in mainland China\nfor our operations, the trading of our securities on the OTCQB and the offering of our securities to foreign investors. The business of\nour subsidiary is not subject to cybersecurity review with the CAC, given that laws and regulations of mainland China on data protection\nand cybersecurity do not currently apply to Hong Kong. To the extent that if we become subject to such laws and regulations of mainland\nChina in the future, we do not believe we are required to conduct a cybersecurity review because (i) we do not possess a large amount\nof personal information in our business operations; and (ii) data processed in our business does not have a bearing on national security\nand thus may not be classified as core or important data by the authorities. In addition, we are not subject to merger control review\nby mainland China’s anti-monopoly enforcement agency as such PRC enforcement agency does not currently have jurisdiction over our\nHong Kong operating subsidiary. However, our operations could be adversely affected, directly or indirectly, by existing or future laws\nand regulations relating to our business or industry, if we inadvertently conclude that such approvals are not required when they are,\nor applicable laws, regulations, or interpretations change and we are required to obtain approval in the future. We may be subject to\npenalties and sanctions imposed by the PRC regulatory agencies, including the CSRC, if we fail to comply with such rules and regulations,\nwhich could adversely affect the ability of the Company’s securities to continue to trade on the OTCQB, which may cause the value\nof our securities to significantly decline or become worthless.\n\n \n\nIn addition, in light of the statements and regulatory\nactions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting\nforeign ownership of mainland China companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns,\nwe may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that the PRC\ngovernment could disallow our holding company structure, which may result in a material change in our operations, including our ability\nto continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to\noffer securities to our investors. These adverse actions could cause the value of our securities to significantly decline or become worthless.\n\n \n\n6\n\n \n\n \n\nFurthermore, there may be prominent risks associated\nwith our operations being in Hong Kong. For example, as a U.S.-listed public company operating primarily in Hong Kong, we may face heightened\nscrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock.\nWe are also subject to certain legal and operational risks associated with our business operations in Hong Kong, which is subject to political\nand economic influence from China. PRC laws and regulations are sometimes vague and uncertain, and we may face the risk that changes in\nthe policies of the PRC government could have a significant impact upon the business we conduct in Hong Kong and the profitability of\nsuch business. Therefore, these risks associated with being based in or having the majority of our operations in Hong Kong could likely\ncause the value of our securities to significantly decline or be worthless. Furthermore, these risks would likely result in a material\nchange in our business operations or a complete hinderance of our ability to offer or continue to offer our securities to investors.\n\n \n\nWe face competition in the market due to the presence\nof a large number of insurance brokers and service providers. We may be subject to the Competition Ordinance (Chapter 619 of the Laws\nof Hong Kong) (“Competition Ordinance”), which came into force on December 14, 2015, laying down three forms of behaviors\nand imposing three rules intended to prevent and discourage anti-competitive conducts: (i) the first conduct rule prohibits (a) the making\nof agreements by any entity, regardless of its legal status or the way in which it is financed, engaged in economic activity, and includes\na natural person engaged in economic activity (“Undertakings”); (b) the engagement in concerted practice by Undertakings;\nor (c) the making or giving effect of decisions by members of an association of Undertakings, that have the object or effect of preventing,\nrestricting distorting competition in Hong Kong; (ii) the second conduct rule prohibits undertakings with a substantial degree of market\npower in a market from abusing that power by engaging in conduct that has the object or effect of preventing, restricting or distorting\ncompetition in Hong Kong; and (iii) the merger rule prohibits Undertakings from directly or indirectly carrying out mergers that have\nor are likely to have the effect of substantially lessening competition in Hong Kong. Currently, the merger rule only applies where an\nUndertaking that holds or, directly or indirectly controls an Undertaking that holds a “carrier license” within the meaning\nof the Telecommunications Ordinance (Chapter 106 of the Laws of Hong Kong) is involved in a merger. As we are not engaged in the telecommunication\nindustry and do not hold such carrier license, such merger rule is currently not applicable to our business.\n\n \n\nThe Competition Commission is an independent statutory\nbody in Hong Kong established under the Competition Ordinance to investigate any contravention against the competition rules and enforce\nthe provisions of the Competition Ordinance, and the Competition Tribunal is a superior court of record set up by the Competition Ordinance,\nas part of the Hong Kong judiciary, to hear and decide cases relating to competition law in Hong Kong. Under the guidelines and policies\npublished by the Competition Commission, possible outcomes of the investigation of a contravention of the Competition Ordinance may include\nthe acceptance by the Competition Commission of a commitment given by the infringer to take any action or refrain from taking any action,\nthe issuance of a warning notice or infringement notice, the commencement of proceedings in the Competition Tribunal, the application\nfor a consent order, the referral of the complaint to a government agency and the conduct of a market study. The Competition Tribunal\nmay order remedies including imposing a pecuniary penalty as well as making disqualification order or other orders under the Competition\nOrdinance. The guidelines and policies published by the Competition Commission in Hong Kong did not mention any remedies which may affect\nan entity’s ability to accept foreign investment or list on a U.S./foreign exchange as a result of the non-compliance of the Competition\nOrdinance. See “*Risk Factors — Risks Related to Doing Business in Hong Kong — Failure to comply with Hong Kong Competition\nLaw may result in material and adverse effect on our business, financial condition and results of operations.*” beginning on\npage 31.\n\n \n\nOperating our business in Hong Kong, we are subject\nto the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the “PDPO”) which sets out the principles\nthat a person who, either alone, jointly or in common with other persons, controls the collection, holding, processing or use of personal\ndata (“Data User”) must follow in any acts concerning information, existing in a form which access to or processing of is\npracticable, which relates to a living individual and can be used to identify that individual. Alleged failure to comply with applicable\nlaws and regulations regarding data security or failure to protect user privacy, regardless of their validity, may result in negative\nnews or media coverage of our business which may in turn damage our reputation, erosion of customer faith in us and material negative\nimpact on our business, results of operations, and financial condition. Contravention with the PDPO may entitle the Privacy Commissioner\nfor Personal Data to issue a written enforcement notice directing such Data User to take prescribed steps within a specified timeframe\nto remedy and prevent recurrence of contravention. Contravention with the above enforcement notice issued by the Privacy Commissioner\nfor Personal Data is an offence and on first conviction, the offender is liable to a maximum fine of HK$50,000 and imprisonment for 2\nyears, with a daily penalty of HK$1,000. Subsequent convictions can result in a maximum fine of HK$100,000 and imprisonment for 2 years,\nwith a daily penalty of HK$2,000.  The PDPO does not prescribe any express remedies regarding an entity’s ability to accept\nforeign investment or list on a U.S./foreign exchange as a result of the non-compliance of the PDPO. See “*Risk Factors —\nRisks Related to Doing Business in Hong Kong — Failure to comply with the Personal Data (Privacy) Ordinance (Chapter 486 of the\nLaws of Hong Kong may result in material and adverse effect on our business, financial condition and results of operations.*”\nbeginning on page 30.\n\n \n\nFor a detailed description of the risks facing\nthe Company and the risks associated with having our operations in Hong Kong, please refer to “*Item 1A. Risk Factors –\nRisks Related to Doing Business in Hong Kong.*”\n\n \n\n7\n\n \n\n \n\n**Corporate History**\n\n \n\nQDM was incorporated in Florida on March 10, 2020\nas the successor to 24/7 Kid, which was incorporated in Florida in November 1998. 24/7 Kid was a telemedicine company that provided Connect-a-Doc\ntelemedicine kits to schools with its services aiming at providing an alternative to schools that desire to provide a higher level of\nhealthcare to their students but are unable to keep a full-time school nurse available.\n\n \n\nOn March 3, 2020, a stock purchase agreement (the\n“Purchase Agreement”) was entered into by and between Huihe Zheng, our Chief Executive Officer and Chairman, and Tim Shannon,\nour then controlling shareholder as well as Chief Executive Officer, Chief Financial Officer, President and director. Pursuant to the\nPurchase Agreement, Mr. Shannon sold to Mr. Zheng (i) 236,666 shares of common stock of 24/7 Kid, representing 42.6% of the total issued\nand outstanding shares of common stock of 24/7 Kid as of March 9, 2020 and (ii) 13,500 shares of Series B Preferred Stock, each entitling\nthe holder to 100 votes on all corporate matters submitted for shareholder approval, in consideration of $500,000 in cash from Mr. Zheng’s\npersonal funds. The shares of common stock and Series B Preferred Stock acquired by Mr. Zheng, in the aggregate, represented 68.3% of\nthe outstanding voting securities of 24/7 Kid as of March 9, 2020, and the acquisition of such shares resulted in a change in control\nof 24/7 Kid.\n\n \n\nOn March 10, 2020, QDM was incorporated in Florida\nas a wholly owned subsidiary of 24/7 Kid, and QDM Merger Sub, Inc. (“Merger Sub”) was incorporated in Florida as the wholly\nowned subsidiary of QDM, for the purposes of effectuating a name change by implementing a reorganization of the corporate structure of\n24/7 Kid through a merger (the “Merger”). On March 13, 2020, an Agreement and Plan of Merger (the “Merger Agreement”)\nwas entered into by and among 24/7 Kid, QDM, and the Merger Sub. On April 8, 2020, the Articles of Merger were filed with the State of\nFlorida to effect the Merger as stipulated by the Merger Agreement.\n\n \n\nPursuant to the Merger Agreement, Merger Sub merged\nwith and into 24/7 Kid, with 24/7 Kid being the surviving entity. As a result, the separate corporate existence of Merger Sub ceased and\n24/7 Kid became a direct, wholly-owned subsidiary of QDM. Pursuant to the Merger Agreement and as a result of the Merger, all issued and\noutstanding shares of common stock and Series B Preferred Stock of 24/7 Kid were converted into shares of QDM’s common stock and\nSeries B Preferred Stock, respectively, on a one-for-one basis, with the QDM securities having the same designations, rights, powers and\npreferences and the qualifications, limitations and restrictions as the corresponding share of the securities of 24/7 Kid being converted.\nAs a result, upon consummation of the Merger, all of the shareholders of 24/7 Kid immediately prior to the Merger became shareholders\nof QDM and all the directors and officers of 24/7 Kid became the directors and officers of QDM. Upon consummation of the Merger, QDM became\nthe successor issuer to 24/7 Kid pursuant to 12g-3(a) and as a result of shares of our common stock were deemed to be registered under\nSection 12(g) of the Exchange Act.\n\n \n\nOn October 21, 2020, QDM entered into a share\nexchange agreement (the “Share Exchange Agreement”) with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI, who is\nalso the principal shareholder and Chairman and Chief Executive Officer of QDM, to acquire all the issued and outstanding capital stock\nof 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\nSeries C Preferred Stock being currently convertible into approximately 3.67 shares of our common stock, subject to certain adjustments\nand limitations (the transaction, the “Share Exchange”). The Share Exchange closed on October 21, 2020. As a result of the\nconsummation of the Share Exchange, QDM acquired 100% of the share capital of QDM BVI, and indirectly all of the share capital of QDM\nHK and YeeTah.\n\n \n\nOn November 3, 2021, we acquired 100% of the issued\nand outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. We acquired QDMS through an intermediary holding\ncompany, LGL, which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole shareholder of QDMS.\nAs part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000 and at the same time the sole\nshareholder of LGL, Mengting Xu, transferred all her shares in LGL to us for a consideration of USD$1.00. As a result, we acquired 100%\nownership of LGL, which, in turn, owned 100% of QDMS.\n\n \n\nIn 2022, 24/7 Kid was administratively dissolved\nwith the State of Florida. \n\n \n\nIn March 2023, the Company consummated a closing\nof a public offering of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued and\nsold an aggregate of 289,104,000 shares of its common stock at a price of $0.081 per share to certain investors, generating gross proceeds\nto the Company of $2,339,937.\n\n \n\n8\n\n \n\n \n\nOn October 4, 2023, the Company sold QDMS to Mr.\nZheng for no consideration. As a result of the disposition, the Company recognized a gain of $33,165. \n\n \n\nOn March 28, 2024, the Company filed an Articles\nof Amendment to Articles of Incorporation of the Company (the “Amendment”) with the Florida Department of State to (i) increase\nits authorized shares of common stock, par value $0.0001 per share, from 200,000,000 shares to 700,000,000 shares and its authorized shares\nof 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 its issued\nand outstanding shares of common stock at a ratio of 10-for-1, which became effective as of April 5, 2024 (the “2024 Forward Stock\nSplit”). The foregoing amendments were approved by the Board and shareholders holding approximately 60.9% of the voting power of\nthe Company.\n\n \n\nAs a result of the 2024 Forward Stock Split, each\nissued and outstanding share of the Company’s common stock prior to the effective time of the 2024 Forward Stock Split are split\ninto ten shares of common stock and the total number of issued and outstanding shares of common stock increases from 29,156,393 shares\nto 291,563,930 shares. The 2024 Forward Stock Split has no impact on the Company’s issued and outstanding shares of preferred stock\nother than that the conversion rate and voting rights of our Series C Convertible Preferred Stock were proportionately adjusted.\n\n \n\nOn October 9, 2024, the Company entered into a\nsecurities subscription agreement with Mr. Huihe Zheng, the Company’s Chief Executive Officer, President, and Chairman of the Board\n(the “Securities Subscription Agreement”). Pursuant to the Securities Subscription Agreement, the Company agreed to issue\n6,000,000 shares of Series B Preferred Stock, par value $0.0001 per share (the “Series B Shares”) to Mr. Zheng at a purchase\nprice of $0.10 per share, and Mr. Zheng agreed to cancel and forgive a portion of the currently outstanding principal amount of the debt\nowed 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\ncapital and general corporate expenses.\n\n \n\nOn September 16, 2025, the Company filed\nan Articles of Amendment to Articles of Incorporation of the Company with the Florida Division of Corporation to effect the 2025 Reverse\nStock Split. The foregoing amendments were approved by the Company’s board of directors and shareholders holding approximately 93.6%\nof the voting power of the Company. As a result of the 2025 Reverse Stock Split, each 34 shares of the common stock issued and outstanding\nprior to the split were combined into one share of the common stock issued and outstanding after the 2025 Reverse Stock Split and the\ntotal number of issued and outstanding shares of common stock decreased from 291,563,930 shares to 8,575,679 shares. The 2025\nReverse Stock Split had no impact on the Company’s issued and outstanding shares of preferred stock other than that the conversion\nrate and voting rights of our Series C Preferred Stock were proportionately adjusted. The 2025 Reverse Stock Split was announced by the\nFinancial Industry Regulatory Authority with an effective date of September 19, 2025. All numbers in this Report give effect to the\n2025 Reverse Stock Split unless indicated otherwise.\n\n \n\n**Competitive Advantages**\n\n \n\nWe believe that the following competitive strengths\ncontribute to our growth and differentiate us from our competitors:\n\n \n\n \n●\n**Premium Customer Service Experience.**We believe providing superior customer service to our existing and potential customers is the most important aspect of our business in terms of brand building and product differentiation. We have designed our services to provide personalized customer service throughout the whole insurance purchase process, including in-depth customer needs analysis, product and plan customization, product evaluation and selection, and claim settlement related assistance.\n\n \n\n \n●\n**Concentrated Insurance Product Offerings**. Hong Kong’s independent insurance intermediary companies generally focus on both life insurance and property insurance, but our strategy has been to focus on life insurance because of generally higher commissions. As of March 31, 2026, YeeTah was a party to agreements with 24 insurance companies in Hong Kong and offers approximately 629 insurance products to its individual customers. We believe our ability to offer concentrated products and services makes us an attractive distributor for our insurance company partners and enables us to provide quality service to our customers.\n\n \n\n9\n\n \n\n \n\n \n●\n**Good Relationships with Insurance Companies.**We maintain good relationships with the leading insurance companies in Hong Kong, which have very stringent requirements on selection of brokers. YeeTah has been working with them since 2015 and has been able to pass their annual evaluations and receive favorable commission rates.\n\n \n\n \n●\n**Experienced Management Team in the Insurance Industry.**YeeTah’s responsible officer has more than ten years of experience serving as a senior executive in the insurance industry and is familiar with the insurance intermediary industry and the regulatory environment in Hong Kong. In addition, YeeTah’s sales team includes three sales directors and two sales managers, each of whom have more than 10 years of experience in the insurance industry.\n\n \n\n \n●\n**Strong Commitment to Rigorous Training and Development.**Given the rapid development of new insurance products and the heavy reliance on face-to-face sales efforts in Hong Kong’s insurance industry, we believe that YeeTah’s strong in-house training program, which covers regulatory requirements, product knowledge and sales skills, gives it a competitive edge over the other professional insurance intermediaries and helps YeeTah retain its sales force and improve our sales. The training also emphasizes inculcating in YeeTah’s technical representatives our corporate culture of customer service and commitment to high ethical standards.\n\n \n\n**Growth Strategy**\n\n \n\nOur goal is to further expand our distribution\nnetwork. To achieve this goal, we intend to capitalize on the growth potential of Hong Kong’s insurance industry and the insurance\nintermediary sector, leverage our competitive strengths and pursue the following strategy:\n\n \n\n \n●\n**Further Participation in the Growing Life-Insurance Sector in Hong Kong.**Life insurance products that require periodic premium payments have the potential to generate sustained revenue over an extended period of time. In order to take advantage of the significant growth potential of Hong Kong’s life issuance market and generate recurring income, we intend to continue to devote significant resources to growing this business line. We intend to actively recruit sales and marketing professionals to help increase sales of life insurance products in Hong Kong. We also intend to improve the productivity of individual technical representatives through rigorous training. In addition, we plan to leverage our existing customer base to cross-sell life insurance products to our non-life insurance customers.\n\n \n\n \n●\n**Further Expand Our Distribution Network Through Building Relationships with Strategic Partners.**The insurance intermediary sector in Hong Kong is highly competitive. We plan to grow our distribution network by building relationships with partners in mainland China that have the potential of generating large premium in sales such as financial institutes, real estate companies and other public entities and with wealth management companies, high net-worth clients and strategic partners in the Hong Kong market through recruiting and hiring more sales professionals to cover strategic partners. We believe that expanding our distribution network will help us generate more business and grow our sales.\n\n \n\n \n●\n\n**Continue to Strengthen Our Relationships\nwith Leading Insurance Companies**.\n\nWe currently establish and maintain most of our\nbusiness relationships with insurance companies in Hong Kong. As we plan to expand our distribution network through partners in mainland\nChina in an effort to increase our sales volumes in the future, we hope to obtain favorable commission rates and exclusive rights to distribute\nhigh-margin products or collaborate with our insurance company partners to custom-develop products to suit the needs of our prospective\ncustomers.\n\n \n\n10\n\n \n\n \n\n**Products and Services**\n\n \n\nWe market and sell two broad categories of insurance\nproducts: (i) life and medical insurance products, and (ii) general insurance products. As of the date of March 31, 2026, insurance\nproducts we sell are underwritten by 24 insurance companies in Hong Kong. In addition, as an MPF Intermediary, we also assist our\ncustomers with their MPF schemes in Hong Kong. Such services primarily include information collection, explanation of MPF products\nand policies (excluding investment advisory services), assistance with applications to set up MPF accounts, and transfer of funds across\ntheir respective MPF schemes.\n\n \n\n**Life and Medical Insurance Products**\n\n \n\nDuring the fiscal year\nended March 31, 2026 and 2025, our life and medical insurance products collectively accounted for approximately 99.9% and 93.5%,\nrespectively, of our net revenues. For life and medical insurance products purchased by our customers, we generally receive commissions\nin the range of 2.75% to 144% of the first-year premiums and in the range of 0% to 64.8% of renewal premiums.\n\n \n\nThe sale of life and medical insurance products\nis, and we currently expect it to continue to be, the major source of our revenue in the next several years. We began offering life insurance\nproducts in 2015 with a focus on individual life products with periodic payment schedules. The major life and medical insurance products\nwe sell can be broadly classified into the categories set forth below. Due to constant product innovation by insurance companies, some\nof the insurance products we sell combine features of one or more of the categories listed below:\n\n \n\n \n●\n**Individual Health Insurance***.*The individual health insurance products we sell primarily consist of critical illness insurance products, which provide guaranteed benefits when the insured is diagnosed with specified serious illnesses, and medical insurance products, which provide conditional reimbursement for medical expenses during the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.\n\n \n\n \n●\n**Individual Annuity**. The individual annuity products we sell generally provide annual benefit payments after the insured attains a certain age, or for a fixed time period, and provide a lump sum payment at the end of the coverage period. In addition, the beneficiary designated in the annuity contract will receive guaranteed benefits upon the death of the insured during the coverage period. In return, the purchaser of the annuity products makes periodic payments of premiums during a pre-determined accumulation period.\n\n \n\n \n●\n**Individual Endowment Life Insurance***.* The individual endowment products we sell generally provide insurance coverage for the insured for a specified time period and maturity benefits if the insured reaches a specified age. The individual endowment products we sell also provide to a beneficiary designated by the insured guaranteed benefits upon the death of the insured within the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.\n\n \n\nWe believe due to mainland\nChina and Hong Kong’s rapidly aging population, high national savings rate, sustained economic development, rising household\nincome, strong support from government policies and regulations, and enhanced risk protection awareness, Hong Kong’s life and\nmedical insurance sector will experience faster growth than the other insurance sectors, and currently we continue to allocate greater\nresources to develop our life and medical insurance business.\n\n \n\n**General Insurance Products**\n\n \n\nDuring the fiscal year\nended March 31, 2026 and 2025, our general insurance products accounted for less than 1.0% of our net revenues. For general insurance\nproducts purchased by our customers, we generally receive commissions from the insurance companies in the range of 8.0% – 57.5%\nof the premiums. The major general insurance products we offer or facilitate to individual customers can be further classified into the\nfollowing categories:\n\n \n\n \n●\n**Individual Accident Insurance***.*The individual accident insurance products we sell generally provide a guaranteed benefit during the coverage period in the event of death or disability of the insured as a result of an accident, or a reimbursement of medical expenses to the insured in connection with an accident. These products typically require only a single premium payment for each coverage period. Because most of the individual accident insurance products we sell are underwritten by general insurance companies, we classify individual accident insurance products as general insurance products.\n\n \n\n11\n\n \n\n \n\n \n\n \n●\n**Travel Insurance***.*The travel insurance products we sell are short-term insurance providing guaranteed benefit in the event of death or disability and covering travel-related emergencies and losses, either within one’s own country or internationally. These products typically require only a single premium payment for each coverage period.\n\n \n\n \n●\n**Homeowner Insurance***.*The homeowner insurance products we sell primarily cover damages to the insured house, along with furniture and household electrical appliance in the house caused by a number of incidents such as fire, flood and explosion.\n\n \n\n \n●\n**Auto Insurance***.*We facilitate both standard auto insurance policies and supplemental policies, which we refer to as riders. The standard auto insurance policies we facilitate generally have a term of one year and cover damages caused to the insured vehicle by collision and other traffic accidents, falling or flying objects, fire, explosion and natural disasters. We also facilitate standard third-party liability insurance policies, which cover bodily injury and property damage caused by an accident involving an insured vehicle to a person not in the insured vehicle. The riders we facilitate cover additional losses, such as liability to passengers, losses arising from vehicle theft and robbery, broken glass and vehicle body scratches.\n\n** **\n\n**MPF and ORSO Services**\n\n \n\nThe MPF is a compulsory\nsaving scheme (pension fund) for the retirement of residents in Hong Kong. Most employees and their employers are required to contribute\nmonthly to the MPF schemes provided by approved private organizations based on the salary and period of employment of the employee. ORSO\nschemes are retirement schemes set up voluntarily by employers to provide retirement benefits for their employees. MPF is the mainstream\nretirement plan in Hong Kong. We introduce customers to the service providers of the MPF and ORSO schemes approved by MPFA as trustees\nto administer the MPF and ORSO schemes. As of March 31, 2026, there were a total 15 approved trustees in Hong Kong, of which, four\nhave signed agreements with us in connection with its provision of MPF and ORSO related services. We assist employees who are Hong Kong\nresidents to open personal accounts with a new approved trustee and employers in Hong Kong to set up corporate accounts. We receive\nservice fees in the range of 1.0% – 5.0% of the total investment transferred by an employee/employer to the new trustee and are\npaid by the trustee once the transaction is completed. During the fiscal year ended March 31, 2026 and 2025, we serviced one and\none customer, respectively, with account opening and transfer of funds across their respective MPF schemes.\n\n \n\n**Referral Business**\n\n** **\n\nSince December 2023, we have expanded our business\nmodel by entering into collaborative relationships with trust companies and other insurance brokerage companies in Hong Kong. Leveraging\nour existing customer resources, we refer customers to these partners, who will sell their applicable products to the referred customers\nbased on their needs. In return for these referrals, we earn commissions based on a percentage of the transaction amount of products\npurchased by such customers referred by us. In the course of such business cooperation, we act solely as an intermediary providing referral\nservices and are not involved in the issuance of financial products or the management of investment funds. Specifically, the provision\nof investment product referral services is deemed completed upon the confirmation of successful customer subscription and full receipt\nof relevant funds by the partnering trust companies. For insurance product referral services, the services are fully completed only after\nthe expiry of the 21-day insurance policy cooling-off period. This mutually beneficial arrangement enables us to diversify our revenue\nstreams while providing additional value to our customers by connecting them with trusted investment opportunities. During the year ended\nMarch 31, 2026 and 2025, we generated $1,572,446 and $1,252,973 from our referral business, respectively.\n\n \n\n**Distribution Network and Marketing**\n\n \n\nWe rely on our technical representatives to market\nand sell insurance products in Hong Kong. As of March 31, 2026, our team included 23 technical representatives who exclusively work in\ninsurance brokerage services for YeeTah in Hong Kong. YeeTah enters into referral agreements with business partners, pursuant to which\nthe business partners will refer clients to YeeTah and are compensated for their referrals if referred clients purchase insurance through\nYeeTah. \n\n \n\n12\n\n \n\n \n\n**Customers**\n\n \n\nBy providing premium customer services to our\ncustomers, we strive to build a loyal customer base that generates referral and cross-selling opportunities, and that becomes returning\ncustomers, who purchase more than one product from us. During the fiscal year ended March 31, 2026 and 2025, we serviced a total\nof 880 and 263 customers with life and medical insurance, respectively, and 9 and 36 customers with general insurance, respectively. Of\nall of our customers in life and medical insurance, we had 41 from Hong Kong and 839 from mainland China for the fiscal year ended\nMarch 31, 2026, and 7 from Hong Kong and 256 from mainland China for the fiscal year ended March 31, 2025.\n\n \n\n**Collaboration with Insurance Companies**\n\n \n\nAs of March 31, 2026, YeeTah is a party to long-term agreements\nwith 24 insurance companies in Hong Kong, pursuant to which YeeTah is authorized to market and distribute certain insurance products\nof those companies to its customers. These agreements establish, among other things, the scope of our authority, the pricing of the insurance\nproducts YeeTah sells and its commission rates.\n\n \n\nFor the fiscal years ended March 31, 2026 and\n2025, our top insurance company partners by commissions are as follows:\n\n \n\n  \nFiscal Year Ended\nMarch 31, 2026  \nFiscal Year Ended\nMarch 31, 2025 \n\nCompany Name \nCommissions\n(In US$)  \nPercentage\nof\nRevenue  \nCommissions\n(In US$)  \nPercentage\nof\nRevenue \n\nCompany A \n 2,484,189.99  \n 11.6% \n 1,042,291.63  \n 12.4%\n\nCompany B \n 6,725,920.54  \n 31.3% \n 5,708,644.81  \n 68.1%\n\nCompany C \n 5,615,230.24  \n 26.1% \n 95,444.97  \n 1.1%\n\n \n\n**Competition**\n\n \n\nA number of industry players are involved in the\ndistribution of insurance products in Hong Kong. We compete for customers on the basis of our competitive product offerings, premium customer\nservices and reputation. Our principal competitors include:\n\n \n\n \n●\n**Professional insurance brokerages.**As of March 31, 2026, there were a total of 1,480 and 810 insurance agencies and insurance broker companies in Hong Kong, respectively. The insurance agencies represent insurance companies, and the insurance broker companies represent customers who purchase insurance products. The rest of the insurance brokerages are other businesses which sell insurance products, such as commercial banks. With an increasing consolidation expected in the insurance brokerage sector in the coming years, we expect competition within this sector to intensify.\n\n \n\n \n●\n**Insurance companies.**We compete against insurance companies that rely on their own sales force to distribute their products. All large insurance companies use both in-house sales force and exclusive sales agents to distribute their own products. We believe that we can compete effectively with insurance companies because we focus only on distribution and are able to offer our customers a broader range of insurance products underwritten by multiple insurance companies.\n\n \n\n \n●\n**Other business entities.**In Hong Kong, some business entities may distribute insurance products as an ancillary business, primarily commercial banks. However, the insurance products distributed by these entities are usually confined to those related to their main lines of business. We believe that we can compete effectively with these business entities because we offer our customers a broader variety of insurance products and professional services.\n\n \n\nAlthough some of our competitors have operated\nfor a longer period of time than us, with more market shares and greater brand influence, we believe that our team’s years\nof experience in the insurance industry, as well as our quality customer service, enable us to better respond and adapt to fast changing\ninsurance market conditions compared to the larger competitors.\n\n \n\n13\n\n \n\n \n\n**Seasonality**\n\n \n\nOur income is subject to quarterly fluctuations\nas a result of the seasonality of the insurance business, the timing of policy renewals and the net effect of new and lost business. In\nthe life insurance industry, the insurance companies, under pressure to meet their annual sales targets, would usually increase their\nsales efforts during the fourth quarter of a year by, for example, offering more incentives for insurance brokerages to increase sales.\nAs a result, income derived from life insurance products for the fourth quarter of a calendar year is generally the highest among all\nfour quarters. Additionally, business activities, including buying and selling insurance, usually slow down during the Chinese New Year\nholiday, which occurs during the first quarter of each year. However, as a result of our initiatives to mitigate the seasonal trends and\ngrowth strategy to expand our business, we did not see the same seasonality as the industry. We recorded our best performing quarter in\nthe fourth quarter of our fiscal year ended March 31, 2026 (i.e., the first quarter of the calendar year).\n\n \n\n**Intellectual Property**\n\n \n\nAs of March 31, 2026, we had no registered or registration-pending\nintellectual property.\n\n \n\n**Employees and Technical Representatives**\n\n \n\nAs of March 31, 2026, we had 11\nfull-time employees, including two executive officers and nine full-time employees. Eight of the 11 full-time employees\nare qualified technical representatives. We also have 15 representatives who are independent contractors. Technical representatives\nare licensed individuals who provide advice to a policy holder or potential policy holder on insurance matters for an insurance\nagent or broker, or arrange contracts of insurance in or from Hong Kong on behalf of that insurance agent or broker.\nYeeTah’s affiliated technical representatives (who are not our employees) are solely compensated via commissions on sales of\ninsurance policies. The commissions YeeTah pays its technical representatives vary from 100% to 170% of the basic commission rate\nprovided by each insurance company.\n\n \n\n**Government Regulation** \n\n \n\nAs a business operating in Hong Kong, we\nare subject to various regulations and rules promulgated by the Hong Kong government. The following is a brief summary of the Hong Kong\nlaws and regulations that currently materially affect our business. This section does not purport to be a comprehensive summary of all\npresent and proposed regulations and legislation relating to the industry in which we operate our business.\n\n \n\n**Regulations Related to Insurance Intermediaries**\n\n \n\nEffective September 23, 2019, IA took over\nthe regulation of insurance agents and brokers (collectively, “Insurance Intermediaries”) from the three self-regulatory organizations\n(i.e., the Insurance Agents Registration Board established under The Hong Kong Federation of Insurers, The Hong Kong Confederation\nof Insurance Brokers and The Professional Insurance Brokers Association) and becomes the sole regulator to license and supervise all Insurance\nIntermediaries in Hong Kong. The Insurance Authority of Hong Kong (the “IA”) is responsible for supervising Insurance Intermediaries’ compliance with the provisions\nof Insurance Ordinance (Chapter 41 of the Laws of Hong Kong) (the “IO”), and the relevant regulations, rules, codes\nand guidelines issued by the IA. The IA is also responsible for promoting and encouraging proper standards of conduct of Insurance\nIntermediaries, and has regulatory powers in relation to licensing, inspection, investigation and disciplinary sanctions.\n\n \n\nThe regulatory regime for Insurance Intermediaries\nis activity-based. Under section 64G of the IO, a person must not carry on a regulated activity, or must not hold out that the person\nis carrying on a regulated activity, in the course of business or employment, or for reward unless the person holds an appropriate type\nof Insurance Intermediary license or is exempt under the IO. It is an offence for contravening section 64G of the IO.\n\n \n\n14\n\n \n\n \n\n*Regulated Activity*\n\n \n\nUnder section 3A(a) of the IO and Schedule 1A to the IO,\na person carries on a regulated activity if the person does any of the following:\n\n \n\n \n●\nnegotiating or arranging a contract of insurance;\n\n \n\n \n●\ninviting or inducing, or attempting to invite or induce, a person to enter into a contract of insurance;\n\n \n\n \n●\ninviting or inducing, or attempting to invite or induce, a person to make a decision in relation to (a) the making of an application or proposal for a contract of insurance; (b) the issuance, continuance or renewal of a contract of insurance; (c) the cancellation, termination, surrender or assignment of a contract of insurance; (d) the exercise of a right under a contract of insurance; (e) the change in any term or condition of a contract of insurance; or (f) the making or settlement of an insurance claim; or\n\n \n\n \n●\ngiving advice in relation to (a) the making of an application or proposal for a contract of insurance; (b) the issuance, continuance or renewal of a contract of insurance; (c) the cancellation, termination, surrender or assignment of a contract of insurance; (d) the exercise of a right under a contract of insurance; (e) the change in any term or condition of a contract of insurance; or (f) the making or settlement of an insurance claim (such advice is referred to as “Regulated Advice”).\n\n \n\n*Types of Licensed Insurance Brokers*\n\n* *\n\nThe licensing regime under the IO prescribes two\ntypes of licensed insurance brokers: licensed insurance broker companies and licensed technical representatives (broker).\n\n \n\n \n●\nA licensed insurance broker company is a company which is granted an insurance broker company license under section 64ZA of the IO to carry on regulated activities in one or more lines of business, and to perform the act of negotiating or arranging an insurance contract as an agent of any policy holder or potential policy holder.\n\n \n\n \n●\nA licensed technical representative (broker) is an individual who is granted a technical representative (broker) license under section 64ZC of the IO to carry on regulated activities in one or more lines of business, as an agent of any licensed insurance broker company.\n\n \n\nA license granted under section 64ZA or 64ZC of\nthe IO is valid for 3 years or, if the IA considers it appropriate in a particular case, another period determined by the IA, beginning\non the date on which it is granted.\n\n \n\n*Responsible Officer*\n\n* *\n\nUnder section 64ZF of the IO, a licensed insurance\nbroker company should appoint a fit and proper person to discharge his or her responsibilities as a responsible officer of the insurance\nbroker company, and should provide sufficient resources and support to that person for discharging his or her responsibilities. Prior\napproval of the IA is required for appointment of the responsible officer.\n\n \n\n*“Fit and Proper” Requirements*\n\n* *\n\nUnder the IO, a person who is, is applying to\nbe, or is applying for a renewal of a license to be, a licensed insurance broker is required to satisfy the IA that he/she/it is a fit\nand proper person. In addition, the responsible officer(s), controller(s), and director(s) (where applicable) of a licensed insurance\nbroker company are also required to be fit and proper persons. These “fit and proper” requirements aim at ensuring that the\nlicensed insurance brokers are competent, reliable and financially sound, and have integrity. Pursuant to the IO, in determining whether\na person is a fit and proper person, the IA must consider, among others, the following factors:\n\n \n\n \n●\nthe person’s education or other qualifications or experience;\n\n \n\n \n●\nthe person’s ability to carry on a regulated activity competently, honestly and fairly;\n\n \n\n \n●\nthe persons’ reputation, character, reliability and integrity;\n\n \n\n \n●\nthe person’s financial status or solvency;\n\n \n\n15\n\n \n\n \n\n \n●\nwhether any disciplinary action has been taken against the person by the Monetary Authority, the Securities and Futures Commission, the Mandatory Provident Fund Schemes Authority; or any other authority or regulatory organization (in Hong Kong or elsewhere), which, in the IA’s opinion, performs a function similar to those of the IA;\n\n \n\n \n●\nif the person is a company in a group of companies, any information in the possession of the IA, whether provided by the person or not, relating to any other company in the group of companies or any controller or director of the person or of such company;\n\n \n\n \n●\nthe state of affairs of any other business which the person carries on or proposes to carry on; and\n\n \n\n \n●\nin respect of an application to be licensed as a licensed insurance broker company or renewal of such license, any information in the possession of the IA whether provided by the person or not relating to (i) any other person who is or is to be employed by, or associated with the person for the purposes of carrying on regulated activities, (ii) any other person who is or will be acting for or on behalf of the person in relation to carrying on regulated activities and (iii) the question as to whether the person has established effective internal control procedures and risk management systems to ensure its compliance with the IO.\n\n \n\nThe IA also issued the Guideline on “Fit\nand Proper” Criteria for Licensed Insurance Intermediaries under the Insurance Ordinance (Cap. 41) to further explain the criteria\nthat the IA would adopt in determining whether a person is a fit and proper person. In addition, continuing professional development is\npart of the fit and proper requirement and the IA issued the Guideline on Continuing Professional Development for Licensed Insurance Intermediaries\nto provide guidance for complying with the continuing professional development requirements.\n\n \n\n*Financial and Other Requirements for Licensed Insurance Broker Companies*\n\n* *\n\nA licensed insurance broker company is required\nto comply with the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Chapter 41L of the\nLaws of Hong Kong) (“Broker Rules”), which came into force on September 23, 2019 and set out, inter alia, some of\nthe key requirements in relation to:\n\n \n\n \n●\nShare Capital and Net Assets\n\n \n\nAs per the requirements, a licensed insurance\nbroker 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\nUS$64,103 (HK$500,000). In respect of licensed insurance broker companies which were previously registered under the self-regulatory regime\n(and which continue to be licensed under the new regulatory regime effective from September 23, 2019 mentioned above) (“specified\ninsurance broker companies”), the Broker Rules stipulated a 4-year plus phase-in transitional arrangement, pursuant to\nwhich, “specified insurance broker company” is required to maintain the amount of paid-up share capital and net assets\nof (i) not less than HK $100,000 ($12,821) for the period from September 23, 2019 to December 31, 2021 and (ii) not\nless than HK $300,000 ($38,462) for the period from January 1, 2022 to December 31, 2023.\n\n \n\n \n●\nProfessional Indemnity Insurance\n\n \n\nA licensed insurance broker company must maintain\na professional indemnity insurance policy that provides coverage for claims made against the company for liabilities arising from breaches\nof duty in the course of carrying on its regulated activities.\n\n \n\n \n●\nClient Accounts\n\n \n\nA licensed insurance broker company that receives\nor holds client monies must maintain at least one client account with an authorized institution in the name of the licensed insurance\nbroker company in the title of which the word “client” appears.\n\n \n\n16\n\n \n\n \n\n \n●\nRecord Keeping\n\n \n\nA licensed insurance broker company must keep,\nin relation to its business which constitutes the carrying on of regulated activities, where applicable, sufficient accounting and other\nrecords (including records relating to the assets or affairs of the company’s clients).\n\n \n\nLicensed insurance broker companies are required\nto file their audited financial statements and auditor’s compliance reports to the IA annually, which statements and reports are\nreviewed by the IA annually. Any issue noted or qualified opinion expressed by the auditor will be followed up and where applicable, further\nactions will be taken as the IA considers necessary.\n\n \n\nThe Broker Rules also provide certain exemptions\nfor the broker insurance companies subject to the transitional requirements referenced above during the specified transitional period\nin complying with the requirements in relation to professional indemnity insurance, client monies reconciliation and audited financial\nstatements.\n\n \n\n*Conduct Requirements*\n\n* *\n\nLicensed insurance brokers are required to comply\nwith the statutory conduct requirements set out in sections 90 and 92 of the IO. The IA also issued the Code of Conduct for Licensed\nInsurance Brokers (“Code of Conduct”) to set out the general principles, together with the standards and practices relating\nto each general principle, serving as the minimum standards of professionalism to be met by licensed insurance brokers when carrying on\nregulated activities.\n\n \n\nThe general principles that a licensed insurance broker should comply\nwith include:\n\n \n\n \n●\nacting honestly, ethically, with integrity and in good faith;\n\n \n\n \n●\nacting in the best interests of its clients and treating its clients fairly;\n\n \n\n \n●\nacting with due care, skill and diligence;\n\n \n\n \n●\npossessing appropriate levels of professional knowledge and experience and only carrying on regulated activities in respect of which the broker has the required competence;\n\n \n\n \n●\nproviding clients with accurate and adequate information to enable them to make informed decisions;\n\n \n\n \n●\nproviding Regulated Advice suitable for the client taking into account the client’s circumstances;\n\n \n\n \n●\nusing best endeavors to avoid conflicts of interests and when such conflicts cannot be avoided, and managing them with appropriate disclosure to ensure clients are treated fairly at all times; and\n\n \n\n \n●\nhaving sufficient safeguards in place to protect client assets received by the broker or which are in the broker’s possession.\n\n \n\nA licensed insurance broker company is required\nto have proper controls and procedures in place to ensure that the broker company and its licensed technical representatives (broker)\nmeet the general principles, standards and practices set out in the Code of Conduct.\n\n \n\n17\n\n \n\n \n\nThe Code of Conduct does not have the force of\nlaw, in that it is not subsidiary legislation, and should not be interpreted in a way that would override the provision of any law. A\nfailure by a licensed insurance broker to comply with the Code of Conduct shall not by itself render the broker liable to any judicial\nor other proceedings. However, in any proceedings under the IO before a court, the Code of Conduct is admissible in evidence, and if a\nprovision in the Code of Conduct appears to the court to be relevant to a question arising in the proceedings, the court must, in determining\nthe question, take into account any compliance or non-compliance with the Code of Conduct.\n\n \n\n**Regulation of Mandatory Provident Fund Intermediaries**\n\n** **\n\nWith the implementation of the Mandatory Provident\nFund Schemes (Amendment) Ordinance 2012, a new statutory regulatory regime for MPF intermediaries came into operation as of November 1,\n2012. Under this statutory regime, only registered MPF intermediaries (such as our operating subsidiary) are allowed to engage in conducting\nsales and marketing activities and giving advice in relation to MPF schemes.\n\n \n\nUnder the statutory regime, the Mandatory Provident\nFund Schemes Authority (“MPFA”) is the authority to administer MPF intermediaries, issue guidelines on compliance with statutory\nrequirements applicable to registered MPF intermediaries, and impose disciplinary sanctions. On the other hand, the IA is given the statutory\nrole for monitoring the compliance of the registered MPF intermediaries. As a frontline regulator, the IA supervises the conduct requirements\nstipulated in the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) (“MPFSO”). If\nthe IA has reasonable cause to believe that the registered MPF intermediaries may have failed to comply with the statutory conduct requirements,\nit may exercise the investigation powers under the MPFSO for investigating the suspected non-compliance.\n\n \n\nRegistered MPF intermediaries must comply with\na set of statutory conduct requirements when they engage in conducting sales and marketing activities and giving advice in relation to\nMPF schemes. The MPFA has issued the Guidelines on Conduct Requirements for Registered Intermediaries to assist the registered MPF intermediaries\nin understanding how to comply with the conduct requirements.\n\n \n\nThe minimum standards of conduct that a registered MPF intermediary\nshould adopt include:\n\n \n\n \n●\nacting honestly, fairly, in the best interests of the client and with integrity;\n\n \n\n \n●\nacting with care, skill and diligence;\n\n \n\n \n●\nadvising on matters within competence;\n\n \n\n \n●\nhaving regard to client’s particular circumstances as is necessary for ensuing that the regulated activity is appropriate to the client;\n\n \n\n \n●\ndisclosing necessary information to the client;\n\n \n\n \n●\ndisclosing conflict of interest;\n\n \n\n \n●\nprompt and proper accounting for client assets;\n\n \n\n \n●\nkeeping records of regulated activities;\n\n \n\n \n●\nestablishing, maintaining and observing proper controls and procedures for securing compliance by the principal intermediary;\n\n \n\n \n●\nusing the principal intermediary’s best endeavors to secure observance by subsidiary intermediaries attached to the principal intermediary of the controls and procedures established above;\n\n \n\n18\n\n \n\n \n\n \n●\nensuring that the responsible officer has sufficient authority within the principal intermediary for carrying out specified responsibilities in relation to the principal intermediary;\n\n \n\n \n●\nproviding the responsible officer with sufficient resources and support for carrying out specified responsibilities in relation to the principal intermediary;\n\n \n\n \n●\nappointing a responsible officer to use his or her best endeavors to carry out specified responsibilities in relation to the principal intermediary; and\n\n \n\n \n●\ncomplying with other requirements that are prescribed by the rules made by the MPFA.\n\n \n\n**Regulation Related to Business Registration**\n\n** **\n\nThe Business Registration Ordinance (Chapter 310\nof the Laws of Hong Kong) requires every person carrying on any business in Hong Kong to make an application to the Commissioner\nof Inland Revenue in the prescribed manner for the registration of that business, unless it is exempt under the Business Registration\nOrdinance. The Commissioner of Inland Revenue must register each business for which a business registration application is made and as\nsoon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or\nbranch registration certificate for the relevant business or the relevant branch, as the case may be. Business registration certificate\nwill be issued on submission of the necessary document(s) together with payment of the relevant fee and is renewable every year or\nevery three years (if business operators elect for issuance of business registration certificate that is valid for three years).\nAny person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to\nimprisonment for one year.\n\n \n\n**Regulation Related to Employment and\nLabor Protection**\n\n** **\n\n*Employment Ordinance (Chapter 57 of the\nLaws of Hong Kong)*\n\n* *\n\nThe Employment Ordinance (Chapter 57 of the\nLaws of Hong Kong), or the EO, is an ordinance enacted for, among other things, the protection of the wages of employees and the\nregulation of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst\nother things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of\na pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments;\nsickness allowance; statutory holidays or alternative holidays; and paid annual leave of up to 14 days depending on the period of\nemployment.\n\n \n\nUnder section 25 of the EO, where a contract of\nemployment is terminated, any sum due to the employee shall be paid to him/her as soon as it is practicable and in any case not later\nthan seven days after the day of termination. Any employer who willfully and without reasonable excuse contravenes section 25\nof the EO commits an offence and is liable to a maximum fine of HK$350,000 and imprisonment for three years.\n\n \n\nFurther, under section 25A of the EO, if any wages\nor any sum referred to in section 25(2)(a) of the EO are not paid within seven days from the day on which they become due,\nthe employer shall pay interest at a specified rate on the outstanding amount of wages or sum from the date on which such wages or sum\nbecome due up to the date of actual payment. Under section 63CA of the EO, any employer who willfully and without reasonable excuse contravenes\nsection 25A of the EO commits an offence and is liable on conviction to a maximum fine of HK$10,000.\n\n \n\n*Employees’ Compensation Ordinance (Chapter 282\nof the Laws of Hong Kong)*\n\n* *\n\nThe Employees’ Compensation Ordinance (Chapter 282\nof the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees\ninjured in the course of employment. As stipulated by the ECO, no employer shall employ any employee in any employment unless there is\nin force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified\nin the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured\namount shall be not less than HK$100,000,000 (approximately $12,900,000) per event if a company has no more than 200 employees. Any employer\nwho contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$100,000 (approximately $12,900)\nand imprisonment for two years. An employer who has taken out an insurance policy under the ECO is required to display a prescribed\nnotice of insurance in a conspicuous place on each of its premises where any employee is employed. Any employer who, without reasonable\ncause, contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$10,000 (approximately $1,290).\nWe believe that we have taken sufficient employee compensation insurance for our employees required under the ECO.\n\n \n\n19\n\n \n\n \n\nUnder section 15 of the ECO, an employer must\nnotify the Commissioner for Labor of any work accident by submitting Form 2 (within 14 days for general work accidents and within\nseven days for fatal accidents), irrespective of whether the accident gives rise to any liability to pay compensation. If the happening\nof such accident was not brought to the notice of the employer or did not otherwise come to his knowledge within such period of seven\nor 14 days (as the case may be), then such notice shall be given not later than seven days or, as may be appropriate, 14 days\nafter the happening of the accident was first brought to the notice of the employer or otherwise came to his knowledge.\n\n \n\n*Mandatory Provident Fund Schemes Ordinance (Chapter 485 of\nthe Laws of Hong Kong)*\n\n* *\n\nThe MPFSO is an ordinance enacted for the purposes\nof providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every\nemployer of an employee (other than exempt persons) of 18 years of age or above but under 65 years of age to take all practical\nsteps to ensure the employee becomes a member of a registered MPF Scheme. Subject to the minimum and maximum relevant income levels, it\nis mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. For a\nmonthly-paid employee, the maximum relevant income level is HK$30,000 (approximately $3,870) per month and the maximum amount of\ncontribution payable by the employer to the MPF Scheme is HK$1,500 (approximately $193). Any employer who, without reasonable cause, contravenes\nthis requirement commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $45,200) and imprisonment\nfor three years, and to a daily penalty of HK$500 (approximately $65) for each day on which the offence is continued. As of\nthe date of March 31, 2025, we believe that we have made all contributions required under the MPFSO.\n\n \n\n*Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong)*\n\n* *\n\nThe Minimum Wage Ordinance (Chapter 608 of\nthe Laws of Hong Kong), or the MWO, provides for a prescribed minimum hourly wage rate (currently at HK$40.0 per hour) during the\nwage period for every employee engaged under a contract of employment under the EO, save for stipulated exceptions. Any provision of the\nemployment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the MWO is void.\n\n \n\n*Occupational Safety and Health Ordinance (Chapter 509\nof the Laws of Hong Kong)*\n\n* *\n\nThe Occupational Safety and Health Ordinance provides\nfor the safety and health protection of employees in workplaces, both industrial and non-industrial and is therefore applicable to\nHK Subsidiaries’ employees in general. Among others, employer must, as far as reasonably practicable, ensure the safety and health\nof employees at work by:\n\n \n\n(a) providing and maintaining plant and work systems\nthat are, so far as reasonably practicable, safe and without risks to health;\n\n \n\n(b) making arrangement for ensuring, so far as\nreasonably practicable, safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances;\n\n \n\n(c) providing all necessary information, instruction,\ntraining and supervision to employee as may be necessary to ensure, so far as reasonably practicable, safety and health;\n\n \n\n(d) providing and maintaining the workplace, and\nsafe access to and egress from the workplace that are, so far as reasonably practicable, safe and without risks to health; and\n\n \n\n(e) providing and maintaining work environment\nthat is, so far as reasonably practicable, safe and without risks to health.\n\n \n\n20\n\n \n\n \n\nUnder section 6 of the Occupational Safety and\nHealth Ordinance, failure to comply with any of the above provisions constitutes an offence and the employer is liable on conviction to\na fine of HK$10,000,000. An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction\nto a maximum fine of HK$10,000,000 and to imprisonment for two years.\n\n \n\nThe Commissioner for Labor may also issue improvement\nnotices against non-compliance of the Occupational Safety and Health Ordinance, or suspension notices against activity of workplace\nwhich may create imminent hazard to the employees. Failure to comply with such notices constitutes an offence punishable by a maximum\nfine of HK$400,000 and HK$1,000,000 respectively and imprisonment of up to 12 months.\n\n \n\n*Occupiers Liability Ordinance (Chapter 314\nof the Laws of Hong Kong)*\n\n* *\n\nThe Occupiers Liability Ordinance regulates the\nobligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property\nlawfully on the land.\n\n \n\nThe Occupiers Liability Ordinance also imposes\na common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable to see that the\nvisitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.\n\n \n\n**Regulations Related to Hong Kong Taxation**\n\n** **\n\n*Inland Revenue Ordinance (Chapter 112\nof the Laws of Hong Kong)*\n\n* *\n\nUnder the Inland Revenue Ordinance (Chapter 112\nof the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable\nto tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months\nafter the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual\nwho is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland\nRevenue not later than one month before such individual ceases to be employed in Hong Kong.\n\n \n\n*Tax on Dividends*\n\n* *\n\nUnder the current practice of the Inland Revenue\nDepartment of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by the Company.\n\n \n\n*Capital Gains and Profit Tax*\n\n* *\n\nNo tax is imposed in Hong Kong in respect\nof capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or\nbusiness in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax\nwhich is imposed at the rates of 8.25% on assessable profits up to HK$2,000,000 (approximately US$258,000) and 16.5% on any part of assessable\nprofits over HK$2,000,000 (approximately US$258,000) on corporations from the year of assessment of 2018/2019 onwards. Certain categories\nof taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading\ngains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment\npurposes.\n\n \n\n21\n\n \n\n \n\n*Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong)*\n\n* *\n\nUnder the Stamp Duty Ordinance (Chapter 117\nof the Laws of Hong Kong), the Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the consideration\nfor or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong\nshares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares). In\naddition, a fixed duty of HK$5 is currently payable on any instrument of transfer of Hong Kong shares. Where one of the parties is\na resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument\nof transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to ten\ntimes the duty payable may be imposed.\n\n \n\n**Regulations Related to Anti-Money Laundering\nand Counter-Terrorist Financing**\n\n** **\n\n*Anti-Money Laundering and Counter-Terrorist\nFinancing Ordinance (Chapter 615 of the Laws of Hong Kong)*\n\n* *\n\nThe Anti-Money Laundering and Counter-Terrorist Financing\nOrdinance (Chapter 615 of the Laws of Hong Kong), or the AMLO, imposes requirements relating to client due diligence and record-keeping and\nprovides regulatory authorities with the powers to supervise compliance with the requirements under the AMLO. In addition, the regulatory\nauthorities are empowered to (i) ensure that proper safeguards exist to prevent contravention of specified provisions in the AMLO;\nand (ii) mitigate money laundering and terrorist financing risks.\n\n \n\n*Drug Trafficking (Recovery of Proceeds) Ordinance\n(Chapter 405 of the Laws of Hong Kong)*\n\n* *\n\nThe Drug Trafficking (Recovery of Proceeds) Ordinance\n(Chapter 405 of the Laws of Hong Kong), or the DTROP, contains provisions for the investigation of assets suspected to be derived\nfrom drug trafficking activities, the freezing of assets on arrest and the confiscation of the proceeds from drug trafficking activities.\nIt is an offense under the DTROP if a person deals with any property knowing, or having reasonable grounds to believe, it to be the proceeds\nfrom drug trafficking. The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly\nor indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure\nto make such disclosure constitutes an offence under the DTROP.\n\n \n\n*Organized and Serious Crimes Ordinance (Chapter 455 of the\nLaws of Hong Kong)*\n\n* *\n\nThe Organized and Serious Crimes Ordinance (Chapter 455\nof the Laws of Hong Kong), or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise\nDepartment to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the\nproceeds from organized and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of\nspecified offences. The OSCO extends the money laundering offence to cover the proceeds of all indictable offences in addition to drug\ntrafficking.\n\n \n\n*United Nations (Anti-Terrorism Measures) Ordinance\n(Chapter 575 of the Laws of Hong Kong)*\n\n* *\n\nThe United Nations (Anti-Terrorism Measures)\nOrdinance (Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offence to: (i) provide\nor collect funds (by any means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole\nor in part, one or more terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly,\nto or for the benefit of a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate. The\nUNATMO also requires a person to report his knowledge or suspicion of terrorist property to an authorized officer, and failure to make\nsuch disclosure constitutes an offence under the UNATMO.\n\n \n\n22\n\n \n\n \n\n*GL3: Guideline on Anti-Money Laundering and Counter-Terrorist Financing\n(“AML/CFT Guideline”)*\n\n* *\n\nThe Guideline on Anti-Money Laundering and\nCounter-Terrorist Financing is issued by the IA, and it sets out the relevant anti-money laundering and counter-financing of\nterrorism (AML/CFT) statutory and regulatory requirements. It also prescribes the AML/CFT standards which authorized insurers and reinsurers\ncarrying on long term business, and licensed individual insurance agents, licensed insurance agencies and licensed insurance broker companies\ncarrying on regulated activities in respect of long term business (hereinafter referred to as “insurance institutions” (“IIs”)),\nshould meet in order to comply with the statutory requirements under the AMLO and the IO. Compliance with the AML/CFT Guideline is\nenforced through the AMLO and the IO. IIs which fail to comply with the AML/CFT Guideline may be subject to disciplinary or other\nactions under the AMLO and/or the IO for non-compliance with the relevant requirements.\n\n \n\n**Regulation Related to Prevention of\nBribery**\n\n** **\n\n*Prevention of Bribery Ordinance (Chapter 201\nof the Laws of Hong Kong)*\n\n* *\n\nUnder the Prevention of Bribery Ordinance (Chapter 201\nof the Laws of Hong Kong) (“PBO”), it is an offense for any agent who, without lawful authority or reasonable excuse,\nsolicits or accepts any advantage as inducement to or reward for or otherwise on account of his doing or forbearing to do, or having done\nor forborne to do, any act in relation to his principal’s affairs or business; or showing or forbearing to show, or having shown\nor forborne to show, favor or disfavor to any person in relation to his principal’s affairs or business. Upon conviction, the agent\nconcerned can be subject to a maximum penalty of a fine of HK$500,000 and imprisonment for 7 years.\n\n \n\n**Regulations Related to Personal Data**\n\n** **\n\n*Personal Data (Privacy) Ordinance (Chapter 486\nof the Laws of Hong Kong)*\n\n* *\n\nThe Personal Data (Privacy) Ordinance (Chapter 486\nof the Laws of Hong Kong) (“PDPO”) imposes a statutory duty on data users to comply with the requirements of the six\ndata protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides\nthat a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice,\nas the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:\n\n \n\n \n●\nPrinciple 1 - purpose and manner of collection of personal data;\n\n \n\n \n●\nPrinciple 2 - accuracy and duration of retention of personal data;\n\n \n\n \n●\nPrinciple 3 - use of personal data;\n\n \n\n \n●\nPrinciple 4 - security of personal data;\n\n \n\n \n●\nPrinciple 5 - information to be generally available; and\n\n \n\n \n●\nPrinciple 6 - access to personal data.\n\n \n\nNon-compliance with a Data Protection Principle\nmay lead to a complaint to the Privacy Commissioner for Personal Data (the “**Privacy Commissioner**”). The Privacy Commissioner\nmay serve an enforcement notice to direct the data user to remedy the contravention and/or instigate prosecution actions. A data user\nwho contravenes an enforcement notice commits an offense that may lead to a fine and imprisonment.\n\n \n\n23\n\n \n\n \n\nThe PDPO also gives data subjects certain rights, inter\nalia:\n\n \n\n \n●\nthe right to be informed by a data user whether the data user holds personal data of which the individual is the data subject;\n\n \n\n \n●\nif the data user holds such data, to be supplied with a copy of such data; and\n\n \n\n \n●\nthe right to request correction of any data the individual considers to be inaccurate.\n\n \n\nThe PDPO criminalizes, including, but not limited\nto, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request, and\nthe unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage,\nincluding injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data may seek compensation from\nthe data user concerned.\n\n \n\n**Enforceability of Civil Liabilities**\n\n** **\n\n*Mainland China*\n\n* *\n\nHalf of our officers and directors are Chinese\nnationals or domiciled in mainland China, and a substantial portion of their assets are located outside the United States. As a result,\nit may be difficult or impossible for a shareholder to effect service of process within the United States upon us or these persons,\nor to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability\nprovisions of the securities laws of the United States or any state in the United States. It may also be difficult for a shareholder\nto enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against\nus and our executive officers and directors.\n\n \n\nOur PRC counsel has advised us that there is uncertainty\nas to whether the PRC courts would (i) recognize or enforce judgments of United States courts obtained against us or our directors\nor officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States,\nor (ii) entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon\nthe securities laws of the United States or any state in the United States.\n\n \n\nOur PRC counsel has further advised us that the\nPRC Civil Procedures Law governs the recognition and enforcement of foreign judgments. The PRC courts may recognize and enforce foreign\njudgments in accordance with the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is\nmade or on principles of reciprocity between jurisdictions.\n\n \n\nThe PRC does not have any treaties or other agreements\nwith the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to\nthe PRC Civil Procedures Law, courts in mainland China will not enforce a foreign judgment against us or our directors and officers if\nthey determine that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result,\nit is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures\nLaw, foreign shareholders may originate actions based on PRC law against us in mainland China, if they can establish sufficient nexus\nto the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have\na direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit.\n\n \n\n24\n\n \n\n \n\n*Hong Kong*\n\n* *\n\nThere is uncertainty as to whether the courts\nof Hong Kong would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated\nupon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain\noriginal actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States\nor any state in the United States.\n\n \n\nA judgment of a court in the United States\npredicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a\nHong Kong court on that judgment for the amount due thereunder and then seeking summary judgment on the strength of the foreign judgment,\nprovided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar\ncharges to a foreign government taxing authority or a fine or other penalty), and (2) final and conclusive on the merits of the claim,\nbut not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud, (b) the\nproceedings in which the judgment was obtained were opposed to natural justice, (c) its enforcement or recognition would be contrary\nto the public policy of Hong Kong, (d) the court of the United States was not jurisdictionally competent, or (e) the\njudgment was in conflict with a prior Hong Kong judgment.\n\n \n\nHong Kong has no arrangement for the reciprocal\nenforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong, in\noriginal actions or in actions for enforcement, of judgments of U.S. courts of civil liabilities predicated solely upon the federal\nsecurities laws of the United States or the securities laws of any state or territory within the United States."}