QDM INTERNATIONAL INC.

Red flags

• Disclosure controls and internal control over financial reporting were ineffective as of March 31, 2026, with material weaknesses in segregation of duties, formal control documentation, risk assessment, and independent governance.
• The CEO, President, and Chairman beneficially controls 99.2% of voting power through 6,013,500 Series B preferred shares, each carrying 100 common-stock-equivalent votes.
• Three insurance company partners accounted for 31.3%, 26.1%, and 11.6% of FY2026 commissions, while two partners accounted for 68.1% and 12.4% in FY2025.
• Gross margin dropped from 87.3% in FY2025 to 53.6% in FY2026 as cost of sales increased 836.3% to $10.0 million, despite revenue increasing 156.2%.
• The Series B preferred stock was reclassified to temporary equity at a carrying amount of $812,851 because it is contingently redeemable upon qualifying change-of-control events.
• The company warns that an active market may never develop, may not maintain OTCQB qualification, and that its common stock may be a penny stock subject to additional trading restrictions.