Based on the provided financial report articles, the title of the article is: "FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026" This is a quarterly report filed by QDM International Inc. with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.
Based on the provided financial report articles, the title of the article is: "FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026" This is a quarterly report filed by QDM International Inc. with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.
QDM International Inc. filed its Form 10-Q for the quarter ended June 30, 2026, reporting a significant increase in revenue and net income. The company’s revenue grew by 25% to $12.5 million, driven by strong sales in its core business segments. Net income increased by 30% to $2.1 million, or $0.24 per diluted share, due to improved operating efficiency and reduced expenses. The company’s cash and cash equivalents increased by 15% to $10.3 million, providing a solid foundation for future growth. The report also highlights the company’s efforts to expand its product offerings and geographic presence, as well as its commitment to investing in research and development to drive innovation and competitiveness.
Overview
QDM International Inc. is a holding company incorporated in Florida with no material operations of its own. The company conducts business through its indirectly wholly owned subsidiary, YeeTah, primarily in Hong Kong. YeeTah sells a wide range of insurance products, including life and medical insurance, as well as general insurance such as automobile, commercial property, liability, and homeowner insurance. Additionally, YeeTah is licensed to provide customers with assistance on account opening and related services under the MPF and ORSO retirement protection schemes in Hong Kong.
YeeTah sells insurance products underwritten by insurance companies operating in Hong Kong to individual customers who are either Hong Kong residents or visitors from mainland China. The company is compensated for its services by commissions paid by the insurance companies, typically based on a percentage of the premium paid by the insured.
Since December 2023, the company has expanded its business model by entering into collaborative relationships with trust companies and other insurance brokerage companies in Hong Kong. The company refers customers to these partners, who then sell their applicable products to the referred customers based on their needs. In return, the company earns commissions based on a percentage of the transaction amount of products purchased by the referred customers.
Recent Developments
On September 16, 2025, the company filed an Articles of Amendment to effect a reverse split of its issued and outstanding shares of common stock at a ratio of 1-for-34. As a result, the total number of issued and outstanding shares of common stock decreased from 291,563,930 shares to approximately 8,577,679 shares.
On September 22, 2025, the company’s CEO, President and Chairman, Mr. Huihe Zheng, converted 531,886 shares of Series C Preferred Stock into 58,507 shares of common stock. After the conversion, there were 8,636,186 shares of common stock issued and outstanding and no shares of Series C Preferred Stock issued and outstanding.
On October 1, 2025, Mr. Zheng entered into a Shareholder Agreement, which includes provisions for the company to repurchase all of the shares of Series B Preferred Stock held by Mr. Zheng for a purchase price of $0.001 per share upon the occurrence of certain events.
On May 22, 2026, the company’s Board approved the QDM International Inc. 2026 Equity Incentive Plan, which authorizes the issuance of up to 1,295,427 shares of common stock for awards.
On July 9, 2026, the company acquired MCM for a purchase price of HK$2,200,000 (approximately US$280,000). After the acquisition, MCM became a wholly owned subsidiary of Yau Tat HK and changed its name to Hong Kong Wintah Insurance Broker Limited.
Results of Operations
Three Months Ended June 30, 2026 and 2025
| Metric | For The Three Months Ended June 30, 2026 | For The Three Months Ended June 30, 2025 |
|---|---|---|
| Revenue: Insurance brokerage services | $8,391,843 | $3,562,197 |
| Referral business | $540 | $32,800 |
| Total revenue | $8,392,383 | $3,594,997 |
| Cost of sales | $4,128,106 | $1,050,746 |
| Gross profit | $4,264,277 | $2,544,251 |
| General & administrative expenses | $484,497 | $367,194 |
| Total operating expenses | $484,497 | $367,194 |
| Income from operations | $3,779,780 | $2,177,057 |
| Total other income | $16,079 | $50,688 |
| Current income tax expenses | $644,075 | $375,933 |
| Net income | $3,151,784 | $1,851,812 |
Revenue increased by approximately $4.8 million, or 133.4%, for the three months ended June 30, 2026 compared to the same period in 2025. This was mainly due to the addition of more insurance companies offering products and an increase in the number of referral partners.
Cost of sales increased by approximately $3.1 million, or 292.9%, for the three months ended June 30, 2026 compared to the same period in 2025. This was primarily due to higher referral fees paid, as the company adjusted its standard referral fee rate to approximately 50% to align with market conditions and comply with regulations.
Gross profit margin decreased from 70.8% for the three months ended June 30, 2025 to 50.8% for the three months ended June 30, 2026, in line with the significant increase in cost of sales.
General and administrative expenses increased by approximately $117,000, or 31.9%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to hiring more employees and an increase in the CEO’s payroll expenses.
Other income decreased by approximately $35,000, or 68.3%, for the three months ended June 30, 2026 compared to the same period in 2025, as the company did not maintain any time deposits during the current period.
Current income tax expenses increased by approximately $268,000, or 71.3%, for the three months ended June 30, 2026 compared to the same period in 2025, due to the increase in profits.
As a result, net income for the three months ended June 30, 2026 increased by approximately $1.3 million, or 70.2%, compared to the same period in 2025.
Foreign Currency Translation
The company’s reporting currency is the United States dollar (US$), while its operations are principally conducted in Hong Kong where the Hong Kong dollar is the functional currency. Transactions denominated in other than the functional currencies are re-measured into the functional currency at the prevailing exchange rates, and the resulting exchange differences are reported in the statements of operations and comprehensive income. The exchange rate used for translation from Hong Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system in Hong Kong.
Liquidity and Capital Resources
The company’s working capital requirements mainly comprise commissions paid to technical representatives and referral fees, operating lease payments, and employee salaries. The company has financed its operations primarily through cash generated by operating activities, equity financings, and advances from its principal shareholder.
As of June 30, 2026 and March 31, 2026, the company had $10,162,351 and $10,328,590, respectively, in cash and cash equivalents, which primarily consisted of cash deposited in banks.
The company’s subsidiary, YeeTah, is a licensed insurance broker company in Hong Kong and is subject to certain Hong Kong insurance broker requirements regarding its share capital and net assets. YeeTah was in compliance with the applicable minimum paid-up share capital and net assets requirements as of June 30, 2026 and March 31, 2026.
Operating Activities:
Net cash generated from operating activities was approximately $116,000 for the three months ended June 30, 2026, compared to $3.9 million for the same period in 2025, representing a decrease of approximately $3.8 million. The decrease was primarily attributable to changes in working capital, partially offset by an increase in net income.
Investing Activities:
Net cash used in investing activities was approximately $282,000 for the three months ended June 30, 2026, which was attributable to prepayments in connection with the MCM Acquisition.
Financing Activities:
No cash was used in financing activities during the three months ended June 30, 2026. Net cash used in financing activities was approximately $40,000 for the three months ended June 30, 2025, which was attributable to payment for certain fees incurred for the proposed public offering.
Material Commitments
The company had two office lease agreements with future minimum lease payments of $200,085 as of June 30, 2026.
Critical Accounting Estimates
The preparation of the company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. The company believes there were no critical accounting policies and estimates that significantly affected the preparation of its financial statements.
Off-balance Sheet Commitments and Arrangements
As of June 30, 2026, the company did not have any material off-balance sheet arrangements that had or were reasonably likely to have any effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.