SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Schedule
14C Information
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
Check
the appropriate box:
☒ |
Preliminary
Information Statement |
☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
☐ |
Definitive
Information Statement |
QDM
INTERNATIONAL INC.
(Name
of Registrant As Specified In Its Charter)
Payment
of Filing Fee (Check the Appropriate Box):
☒ |
No
fee required |
☐ |
Fee
paid previously with preliminary materials |
☐ |
Fee
computed on table in exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a–101) per Item 1 of this Schedule and Exchange
Act Rules 14c–5(g) and 0–11 |
QDM
INTERNATIONAL INC.
NOTICE
OF STOCKHOLDER ACTION BY WRITTEN CONSENT
November
28, 2023
Dear
Stockholders of QDM International Inc.:
We are furnishing the accompanying
Information Statement on Schedule 14C (the “Information Statement”) to the stockholders of shares of common stock, par value
$0.0001 per share (the “Common Stock”), of QDM International Inc., a Florida corporation (the “Company,” “we,”
“us” or “our”). The purpose of the Information Statement is to notify the stockholders that, in lieu of a special
meeting of the stockholders of the Company, and pursuant to the Florida Business Corporation Act (the “FBCA”), the Board of
Directors of the Company (the “Board”) and stockholders holding approximately 60.9% of our outstanding voting power as of
the record date (the “Voting Stockholders”), including Huihe Zheng, our Chairman, President and Chief Executive Officer and
Huili Shen, our director, have by written consent approved and adopted an amendment to our Articles of Incorporation, as amended (the
“Articles of Incorporation”), to (i) increase the number of authorized shares of Common Stock we may issue to seven hundred
million (700,000,000), and to increase the number of authorized shares of Preferred Stock we may issue to thirty million (30,000,000)
and (ii) effect a forward stock split of our issued and outstanding Common Stock at a ratio of ten-for-one (the “Forward Split”),
with such Forward Split to be effected at such time and date, if at all, as determined by the Board in its sole discretion (provided that
it is effected within one year of the date on which the stockholders of the Company approve the Forward Split).
The accompanying Information
Statement is being provided to you for your information to comply with the requirements of Regulation 14C of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). This notice and the accompanying Information Statement constitute notice to you
of the aforementioned corporate actions to be taken without a meeting, by the Voting Stockholders taking action by written consent pursuant
to Section 607.0704 of the FBCA. You are urged to read this Information Statement carefully in its entirety. However, no action is required
on your part in connection with this document, including with respect to the approval of the Corporate Actions. No meeting of our
stockholders will be held or proxies requested because we have received written consent to these matters from the Voting Stockholders
who hold a majority of the aggregate issued and outstanding shares of our voting stock.
Under
Rule 14c-2(b) of the Exchange Act, the actions described in the Information Statement may not be taken earlier than 20 calendar days
after we have sent or given the Information Statement to our stockholders. We intend to distribute this notice and the accompanying Information
Statement to our stockholders on or about [_], 2023. The record date established for purposes of determining the number of issued
and outstanding shares of voting stock, and thus voting power, was November 28, 2023.
THIS
IS FOR YOUR INFORMATION ONLY. YOU DO NOT NEED TO DO ANYTHING IN RESPONSE TO THIS INFORMATION STATEMENT. THIS IS NOT A NOTICE OF SPECIAL
MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTERS DESCRIBED HEREIN.
|
Sincerely
|
|
|
|
|
|
Name:
Huihe Zheng |
|
Title:
President and Chief Executive Officer |
QDM
INTERNATIONAL INC.
Room 1030B, 10/F, Ocean Centre, Harbour City
5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong
+852 34886893
INFORMATION
STATEMENT
We
Are Not Asking You for a Proxy and
You
Are Requested Not To Send Us a Proxy
INTRODUCTION
This
Information Statement on Schedule 14C (the “Information Statement”) is being furnished to the stockholders of QDM International
Inc. (the “Company,” “we,” “us,” or “our”) in connection with the actions to be taken
by us as a result of a written consent in lieu of a special meeting of stockholders pursuant to the Florida Business Corporation Act
(the “FBCA”), dated November 28, 2023.
This
Information Statement and the Notice of Stockholder Action by Written Consent (the “Notice”) is being furnished by us to
our stockholders of record as of November 28, 2023 (the “Record Date”), to inform our stockholders that the Board
of Directors of the Company (the “Board”) and the Voting Stockholders, including Huihe Zheng, our Chairman, President and
Chief Executive Officer and Huili Shen, our director,, have taken and approved the following actions (the “Corporate Actions”)
by written consent to approve an amendment (the “Amendment”) to our Articles of Incorporation, as amended (the “Articles
of Incorporation”) to (i) increase the number of authorized shares of Common Stock we may issue from two hundred million (200,000,000)
to seven hundred million (700,000,000), and to increase the number of authorized shares of Preferred Stock we may issue from five million
(5,000,000) to thirty million (30,000,000) (the “Increase in Authorized Shares”); and (ii) effect a forward stock split of
our issued and outstanding Common Stock at a ratio of 10-for-1 (the “Forward Split”).
This Information Statement
is being sent to you to notify you of the Corporate Actions being taken by written consent in lieu of a special meeting of our stockholders.
On the Record Date, our Board and the Voting Stockholders, representing approximately 60.9% of the voting power of our Company as of the
Record Date, adopted and approved the Increase in Authorized Shares and the Forward Split. Accordingly, your consent is not required and
is not being solicited in connection with the approval of the Increase in Authorized Shares and the Forward Split. The Increase in Authorized
Shares and Forward Split will become effective upon filing of the Amendment with the Secretary of State of the State of Florida. However,
the Forward Split will become effective at the OTCQB Venture Market (the “OTCQB”) where our Common Stock is traded following
the approval by the Financial Industry Regulatory Authority, Inc. (“FINRA”).
The
ability to proceed without a special meeting of the stockholders to approve, adopt and/or ratify the Corporate Actions are authorized
by Section 607.0704 of the FBCA which provides that, unless otherwise provided in our Articles of Incorporation, action required or permitted
to be taken at a meeting of our stockholders may be taken without a meeting if a written consent that sets forth the action so taken
is signed by stockholders holding at least a majority of the voting power of the Company and delivered to the Company, except that if
a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.
Such consent shall have the same force and effect as a majority vote of the stockholders and may be stated as such in any document. Our
Articles of Incorporation does not contain any provisions contrary to the provisions of Section 607.0704 of the FBCA. Thus, to eliminate
the costs to us and management time involved in holding a special meeting, and in order to take the Corporate Actions as described in
this Information Statement, one of our stockholders representing in excess of 50% of the voting stock executed and delivered a written
consent to us.
We
are distributing this Information Statement to our stockholders in full satisfaction of any notice requirements we may have under the
FBCA and Regulation 14C of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
This Information Statement
is dated as of and is first being sent or given to our stockholders of record on or about [_], 2023.
On the Record Date, there
were 29,156,393 shares of our Common Stock, 13,500 shares of Series B Preferred Stock and 531,886 shares of Series C Convertible Preferred
Stock issued and outstanding and entitled to notice of and to vote on all matters presented to stockholders. The required vote for the
adoption of the Amendment and the approval of the Increase in Authorized Shares and the Forward Split was a majority of the issued and
outstanding shares of Common Stock, Series B Preferred Stock and Series C Convertible Preferred Stock, voting together as a single class.
On the Record Date, the Voting Stockholders, as the holders of record of approximately 60.9% of the outstanding shares of our voting stock,
executed a written consent adopting, approving and ratifying the Corporate Actions. When actions are taken by written consent of less
than all of the stockholders entitled to vote on a matter, Section 607.0704 of the FBCA requires notice of the action to those stockholders
who did not vote. This Information Statement and the accompanying Notice constitute notice to you of action by written consent as required
by Section 607.0704 of the FBCA. Because we have obtained sufficient stockholder approval of the Corporate Actions, no other consents
or votes will be solicited in connection with the Corporate Actions.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Under
federal securities laws, the Corporate Actions may not be completed until 20 calendar days after the date of distribution of this Information
Statement to our stockholders. Therefore, notwithstanding the execution and delivery of the written consent, the Corporate Actions will
not occur until that time has elapsed.
Dissenters’
Rights of Appraisal
Under
FBCA, the Company’s stockholders of Common Stock are not entitled to appraisal right with respect to the action to amend the Articles
of Incorporation, the Increase in Authorized Shares and the Forward Split.
Information
Statement Costs
The
costs of preparing, printing and mailing this Information Statement will be borne by the Company.
Vote
Required to Approve the Corporate Actions
As
of the Record Date, there were 29,156,393 shares of our Common Stock, 13,500 shares of Series B Preferred Stock and 531,886 shares
of Series C Convertible Preferred Stock issued and outstanding and entitled to notice of and to vote on all matters presented to stockholders.
The affirmative vote of a majority of the shares of Common Stock, Series B Preferred Stock and Series C Convertible Preferred Stock,
voting as a single class, entitled to vote is required for approval of the Corporate Actions.
Proposals
by Security Holders
No
stockholder has requested that we include any additional proposals in this Information Statement.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTERS DESCRIBED HEREIN.
PLEASE NOTE THAT THE COMPANY’S
VOTING STOCKHOLDERS HAVE VOTED TO APPROVE THE CORPORATE ACTIONS. THE NUMBER OF VOTES HELD BY THE VOTING STOCKHOLDERS EXECUTING THE CONSENT
IS SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT FOR SUCH MATTERS UNDER APPLICABLE LAW AND THE COMPANY’S CHARTER, SO NO
ADDITIONAL VOTES WILL BE NEEDED TO APPROVE THESE ACTIONS.
FORWARD-LOOKING
STATEMENTS
Certain
statements included in this Information Statement regarding the Company are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. This information may involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future
results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve
assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,”
“will,” “should,” “expect,” “anticipate,” “estimate,” “believe,”
“intend” or “project” or the negative of these words or other variations on these words or comparable terminology.
Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors. In
light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Information Statement
will in fact occur. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking
statements, whether as a result of new information, future events or otherwise.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information known to us with respect to the beneficial ownership of Common Stock by (i) each person,
entity or group (as that term is used in Section 13(d)(3) of the Exchange Act) known to us to be the beneficial owner of more than 5%
of the outstanding shares of Common Stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive
officers as a group. The percentage of class is based on 29,156,393 shares of Common Stock issued and outstanding as of the Record Date.
Name of Beneficial Owner 5% Stockholders | |
Number of
Shares of
Common
Stock
Owned | | |
Percentage
of Shares
of
Common
Stock
Owned | | |
Number
of Shares
of Series B
Preferred
Stock
Owned | | |
Percentage
of Shares
of Series B
Preferred
Stock
Owned | | |
Number of
Shares of
Series C
Preferred
Stock
Owned | | |
Percentage
of Shares
of Series C
Preferred
Stock
Owned | | |
Percentage of
Aggregate
Voting
Power | |
HW FUND(3) | |
| 12,000,000 | | |
| 41.2 | % | |
| — | | |
| — | | |
| — | | |
| — | | |
| 39.1 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Willington Capital Limited(4) | |
| 5,000,000 | | |
| 17.2 | % | |
| — | | |
| — | | |
| — | | |
| — | | |
| 16.3 | % |
Ruiyin Capital Limited(5) | |
| 4,800,000 | | |
| 16.5 | % | |
| — | | |
| — | | |
| — | | |
| — | | |
| 15.6 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Bakelai Capital Limited(6) | |
| 5,000,000 | | |
| 17.2 | % | |
| — | | |
| — | | |
| — | | |
| — | | |
| 16.3 | % |
Directors and Officers | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Huihe Zheng(3) | |
| 12,158,810 | | |
| 41.7 | % | |
| 13,500 | | |
| 100 | % | |
| 531,886 | | |
| 100 | % | |
| 44.6 | %(1)(2) |
Tim Shannon(7) | |
| 8,196 | | |
| * | | |
| — | | |
| — | | |
| — | | |
| — | | |
| * | |
Huili Shen(4) | |
| 5,000,167 | | |
| 17.1 | % | |
| — | | |
| — | | |
| — | | |
| — | | |
| 16.3 | % |
Timothy Miles(8) | |
| 8,167 | | |
| * | | |
| — | | |
| — | | |
| — | | |
| — | | |
| * | |
All officers and directors as a group (four persons) | |
| 17,326,680 | | |
| 59.4 | % | |
| 13,500 | | |
| 100 | % | |
| 531,886 | | |
| 100 | % | |
| 60.9 | % |
(1) |
Each
share of Series B Preferred Stock entitles the holder to 100 votes on all corporate matters submitted for stockholder approval. |
(2) |
Each
share of Series C Preferred Stock entitles the holder to 0.37 vote initially on all corporate matters submitted for stockholder approval. |
(3) |
12,000,000
shares of Common Stock directly held by HW FUND, of which Huihe Zheng, our Chief Executive Officer and President, is the controlling
shareholder and holds the voting and dispositive power over the shares of Common Stock held by such entity. The address for this
stockholder is Vistra (Cayman) Limited, P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205,
Cayman Islands. |
(4) |
5,000,000
shares of Common Stock directly held by Willington Capital Limited, of which Huili Shen, our director, is the sole shareholder and
director and holds the voting and dispositive power over the shares of Common Stock held by such entity. The address for this stockholder
is Rm 4F, 15/F, Sunwise Industrial Building, 16-26 Wang Wo Tsai Street, Tsuen Wan, Hong Kong. |
(5) |
Erkai
Wang is the sole shareholder and director of Ruiyin Capital Limited. The address for this stockholder is Rm 4G, 15/F, Sunwise Industrial
Building, 16-26 Wang Wo Tsai Street, Tsuen Wan, Hong Kong. |
(6) |
Shimei
Zhou is the sole shareholder and director of Bakelai Capital Limited. The address for this stockholder is Rm 4, 15/F, Sunwise Industrial
Building, 16-26 Wang Wo Tsai Street, Tsuen Wan, Hong Kong. |
(7) |
The
address for this stockholder is 2035 Highway A1A, #306 Indian Harbour Beach, FL 32937. |
(8) |
The
address for this stockholder is PO Box 30, Dundee, MI 48131. |
DESCRIPTION
OF CORPORATE ACTIONS
ACTION
ONE - INCREASE IN AUTHORIZED SHARES
Introduction
On November 28, 2023, our
Board approved, among other things, an amendment to our Articles of Incorporation to increase the number of authorized shares of Common
Stock we may issue from two hundred million (200,000,000) to seven hundred million (700,000,000), and to increase the number of authorized
shares of Preferred Stock we may issue from five million (5,000,000) to thirty million (30,000,000). On November 28, 2023, the Voting
Stockholders, acting by written consent, approved the Increase in Authorized Shares and the Amendment, among other things.
The
text that will be incorporated into our Articles of Incorporation upon effecting the Increase in Authorized Shares is attached as Annex
A to this Information Statement. The Amendment, which will not be filed until at least twenty days following the mailing date of
this Information Statement, will be effective upon the filing of such Amendment to the Articles of Incorporation in the form attached
as Annex A with the Secretary of State of Florida with such filing to occur, if at all, at the sole discretion of the Board.
Reasons
for the Increase in Authorized Shares
Our
Board believes it is in our best interests to increase the number of authorized shares of Common Stock and Preferred Stock in order to
give us greater flexibility in considering and planning for future corporate needs, including, but not limited to, potential strategic
transactions, including mergers, acquisitions and business combinations, stock dividends, grants under equity compensation plans, stock
splits or financings, as well as other general corporate transactions. The Board believes that additional authorized shares will enable
us to take timely advantage of acquisition opportunities that become available to us, as well as market conditions and favorable financing.
We do not have any definitive plans, arrangements, understandings or agreements regarding the issuance of the additional shares that
will result from the Increase in Authorized Shares. Except as otherwise required by law, the newly authorized shares will be available
for issuance at the discretion of our Board (without further action by our stockholders) for various future corporate needs, including
those outlined above.
We
presently do not have in place provisions which may have an anti-takeover effect. The increase in the authorized number of shares of
our Common Stock or Preferred Stock did not result from our knowledge of any specific effort to accumulate our securities or to obtain
control of us by means of a merger, tender offer, proxy solicitation in opposition to management or otherwise, and we did not take such
action to increase the authorized shares to enable us to frustrate any efforts by another party to acquire a controlling interest or
to seek representation on our Board.
Effect
of the Increase in Authorized Shares
While
effecting the Increase in the Authorized Shares would not have any immediate dilutive effect on the proportionate voting power or other
rights of existing stockholders, any future issuance of additional authorized shares of our Common Stock and Preferred Stock may, among
other things, dilute the earnings per share of our Common Stock and Preferred Stock and the equity and voting rights of those holding
equity at the time the additional shares are issued.
The
Increase in Authorized Shares will not affect the rights of current holders of our Common Stock or Preferred Stock, none of whom have
preemptive or similar rights to acquire the newly authorized shares.
Board
Discretion to Implement the Increase in Authorized Shares
The
Board will implement the Increase in Authorized Shares only upon a determination that it is in the best interests of the stockholders
at that time. The Board may determine, in its sole discretion, not to effect the Increase in Authorized Shares.
ACTION
TWO – FORWARD SPLIT
Introduction
On November 28, 2023, our
Board approved, among other things, an amendment to our Articles of Incorporation to effect a Forward Split of our issued and outstanding
Common Stock at a ratio of 10-for-1. On November 28, 2023, the Voting Stockholders, acting by written consent, approved the Amendment
and the Forward Split, among other things.
Effecting
the Forward Split requires that our Articles of Incorporation be amended. The text that will be incorporated into our Articles of Incorporation
to effect the Forward Split is attached as Annex A to this Information Statement. The Amendment, which will not be filed until
at least twenty days following the mailing date of this Information Statement, will be effective upon the filing of such Amendment to
the Articles of Incorporation in the form attached as Annex A with the Secretary of State of Florida with such filing to occur,
if at all, at the sole discretion of the Board.
Reasons
for the Forward Split
The
Board’s primary objectives in effecting the Forward Split, if necessary or if the Board otherwise desires, is to enable the Board
to (i) increase the amount of stock available for trading, which is currently trading on the OTCQB, thereby boosting its liquidity, providing
current stockholders with more flexibility to enter and exit their positions, further enhancing the attractiveness of our Common Stock;
and (ii) facilitate capital raising by reducing the price per share, making our Common Stock more accessible to smaller investors and
appeal a broader audience of potential investors. Immediately following the Forward Split, the per-share price of our Common Stock should
generally decrease proportionately with the Forward Split ratio, and the expectation is that the liquidity in our Common Stock will increase.
In the longer term, however, depending upon market and industry conditions and the status of our Company, the Forward Split may have
no effect, a positive effect or a negative effect, on the value of the post-Forward Split Common Stock. Additionally, we cannot assure
you that the liquidity in our Common Stock after the Forward Split will increase in proportion to the increase in the number of shares
of our Common Stock outstanding before the Forward Split, or at all. Accordingly, the total market capitalization of our Common Stock
after the Forward Split could be lower or higher than the total market capitalization before the Forward Split.
Effects
of the Forward Split
One
principal effect of the Forward Split would be to increase the number of outstanding shares of our Common Stock. The Forward Split will
not have any dilutive effect on our stockholders since each stockholder would hold the same percentage of our Common Stock outstanding
immediately following the Forward Split as such stockholder held immediately prior to the Forward Split. The relative voting and other
rights that accompany the shares of Common Stock would not be affected by the Forward Split.
The
table below sets forth the number of shares of our Common Stock outstanding before and after the Forward Split based on 29,156,393
shares of Common Stock outstanding as of the Record Date.
If
the Forward Split is implemented, the number of shares our Common Stock owned by each stockholder will be increased in the same proportion
as the reduction in the total number of shares outstanding, such that the percentage of our Common Stock owned by each stockholder will
remain unchanged. The number of shares of our Common Stock that may be purchased upon conversion or exercise of outstanding Preferred
Stock, options or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise
or conversion prices for these securities will also be ratably adjusted in accordance with their terms as of the Effective Time.
The
par value of our Common Stock will not change as a consequence of the Forward Split. Accordingly, the par value of our Common Stock will
remain at $0.0001 per share. The Forward Split will not have any effect of changing the number of authorized shares of Common Stock of
the Company.
We
are subject to the periodic reporting and other requirements of the Exchange Act. The proposed Forward Split will not affect the registration
of our Common Stock. Our Common Stock will continue to trade under the symbol “QDMI” on the OTCQB.
Effecting
the Forward Split
Any
time twenty calendar days following the mailing date of this Information Statement, if our Board concludes that it is in the best interests
of our Company and our stockholders to effect the Forward Split, the Amendment will be filed with the Secretary of State of Florida.
The actual timing of the filing of the Amendment with the Secretary of State of Florida to effect the Forward Split will be determined
by our Board (provided that it is effected within one year of the date on which the stockholders of the Company approve the Forward Split).
In addition, if for any reason our Board deems it advisable to do so, the Forward Split may be abandoned at any time prior to the filing
of the Amendment, without further action by our stockholders. The Forward Split will be effective as of the date of filing with the Secretary
of State of Florida (the “Effective Time”). Upon the filing of the Amendment, without further action on our part or our stockholders,
the outstanding shares of Common Stock held by stockholders of record as of the Effective Time would be converted into a higher number
of shares of Common Stock based on a Forward Split ratio of 10-for-1. For example, if you presently hold 1,500 shares of our Common Stock,
you would hold 15,000 shares of our Common Stock following the Forward Split.
Our
Common Stock is currently quoted on the OTCQB. Accordingly, the Forward Split must be approved and processed by FINRA in order for it
to be recognized for trading purposes. Accordingly, the Forward Split, if implemented, will not be effective on the OTCQB until it is
processed by FINRA. In no event, however, will the Forward Split be effective prior to the 20th calendar day after this Information Statement
is mailed.
Exchange
of Stock Certificates
As
of the Record Date, we had 380 holders of record of our Common Stock. Because some of our Common Stock is held by brokers and other
institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders.
On
or after the Effective Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be able to obtain a certificate
evidencing his, her or its post-Forward Split shares only by sending the exchange agent (who will be the Company’s transfer agent)
the stockholder’s old stock certificate(s), together with the properly executed and completed letter of transmittal and such evidence
of ownership of the shares as we may require. Stockholders will not receive certificates for post-Forward Split shares unless and until
their old certificates are surrendered. Stockholders should not forward their certificates to the exchange agent until they receive the
letter of transmittal, and they should only send in their certificates with the letter of transmittal. The exchange agent will send each
stockholder, if elected in the letter of transmittal, a new stock certificate after receipt of that stockholder’s properly completed
letter of transmittal and old stock certificate(s). A stockholder that surrenders his, her or its old stock certificate(s) but does not
elect to receive a new stock certificate in the letter of transmittal will be deemed to have requested to hold that stockholder’s
shares electronically in book-entry form with our transfer agent.
Certain
of our registered holders of Common Stock hold some or all of their shares electronically in book-entry form with our transfer agent.
These stockholders do not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided with a
statement reflecting the number of shares registered in their accounts. If a stockholder holds registered shares in book-entry form with
our transfer agent, the stockholder may return a properly executed and completed letter of transmittal.
Stockholders
who hold shares in street name through a nominee (such as a bank or broker) will be treated in the same manner as stockholders whose
shares are registered in their names, and nominees will be instructed to effect the Forward Split for their beneficial holders. However,
nominees may have different procedures and stockholders holding shares in street name should contact their nominees. Stockholders will
not have to pay any service charges in connection with the exchange of their certificates.
Accounting
Consequences
As of the Effective Time,
the stated capital attributable to Common Stock and Preferred Stock on our balance sheet will be reduced proportionately based on the
Forward Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited
with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer
shares of our Common Stock outstanding.
Federal
Income Tax Consequences
The
following summary describes certain material U.S. federal income tax consequences of the Forward Split to holders of our Common Stock.
This summary addresses the tax consequences only to a beneficial owner of our Common Stock that is a citizen or individual resident of
the United States, a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia
or otherwise subject to U.S. federal income taxation on a net income basis in respect of our Common Stock (a “U.S. holder”).
This summary does not address all of the tax consequences that may be relevant to any particular stockholder, including tax considerations
that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be
known by investors. This summary also does not address the tax consequences to persons that may be subject to special treatment under
U.S. federal income tax law or persons that do not hold our Common Stock as “capital assets” (generally, property held for
investment). This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, administrative
rulings and judicial authority, all as in effect as of the date hereof. Subsequent developments in U.S. federal income tax law, including
changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income
tax consequences of the Forward Split. Each stockholder should consult his, her or its own tax advisor regarding the U.S. federal,
state, local and foreign income and other tax consequences of the Forward Split.
If
a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our Common
Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the
activities of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should consult their own tax
advisors regarding the U.S. federal income tax consequences of the Forward Split.
The
Forward Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss should be recognized
by a U.S. holder upon the Forward Split. Accordingly, the aggregate tax basis in the Common Stock received pursuant to the Forward Split
should equal the aggregate tax basis in the Common Stock surrendered and the holding period for the Common Stock received should include
the holding period for the Common Stock surrendered.
INTEREST
OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON
Except
in their capacity as stockholders (which interest does not differ from that of the other holders of Company’s Common Stock), none
of our officers, directors or any of their respective affiliates or associates will have any interest in the matters being acted upon.
ADDITIONAL
INFORMATION
Information
Available
The
Company is subject to the information and reporting requirements of the Exchange Act and in accordance with the Exchange Act, the Company
files periodic reports, documents and other information with the SEC relating to its business, financial statements and other matters.
These reports and other information filed by the Company with the SEC may be inspected and are available for copying at the public reference
facilities maintained at the SEC at 100 F Street NW, Washington, D.C. 20549.
The Company’s filings
with the SEC are also available to the public from the SEC’s website, http://www.sec.gov. The Company’s Annual Report on Form
10-K for the fiscal year ended March 31, 2023 filed on June 29, 2023 and Amendment No. 1 to the Annual Report on Form 10-K for the fiscal
year ended March 31, 2023 filed on June 30, 2023, and other reports filed under the Exchange Act, are also available to any stockholder
at no cost upon request to: Room 1030B, 10/F, Ocean Centre, Harbour City, 5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong, telephone
number +852 34886893.
Stockholder
Communications
Stockholders
wishing to communicate with the Board may direct such communications to the Board c/o the Company, Attn: Huihe Zheng. Mr. Zheng will
present a summary of all stockholder communications to the Board at subsequent Board meetings. The directors will have the opportunity
to review the actual communications at their discretion.
Delivery
of Documents to Security Holders Sharing an Address
If
hard copies of the materials are requested, we will send only one Information Statement and other corporate mailings to stockholders
who share a single address unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate
copy of the Information Statement to a stockholder at a shared address to which a single copy of the Information Statement was delivered.
You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your shared address and
(iii) the address to which the Company should direct the additional copy of the Information Statement, to the Company at Room 1030B,
10/F, Ocean Centre, Harbour City, 5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong.
If
multiple stockholders sharing an address have received one copy of this Information Statement or any other corporate mailing and would
prefer the Company to mail each stockholder a separate copy of future mailings, you may send notification to or call the Company’s
principal executive offices. Additionally, if current stockholders with a shared address received multiple copies of this Information
Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to stockholders at the shared
address, notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
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By Order of the Board of Directors |
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|
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Name: Huihe Zheng |
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Title: President and Chief Executive Officer |
ANNEX
A
ARTICLES
OF AMENDMENT
TO
ARTICLES
OF INCORPORATION
OF
QDM
INTERNATIONAL INC.
Pursuant
to Section 607.1006 of the Florida Business Corporation Act (the “FBCA”), it is hereby certified that:
|
1. |
The
name of the Corporation is: QDM International Inc. (the “Corporation”). |
|
2. |
The
Articles of Incorporation of the Corporation were filed with the Secretary of State of the State of Florida on March 9, 2020, and
were amended by Articles of Amendment to Articles of Incorporation filed on August 16, 2021. |
|
3. |
Upon
the filing and effectiveness (the “Effective Time”) pursuant to the FBCA of this amendment to the Corporation’s
Articles of Incorporation, the total number of shares of capital stock which this Corporation shall have authority to issue is increased
to Seven Hundred Thirty Million (730,000,000) shares, consisting of Seven Hundred Million (700,000,000) shares of common stock (the “Common
Stock”), par value $0.0001 per share and Thirty Million (30,000,000) shares of Preferred Stock (the “Preferred Stock”),
par value $0.0001 per share. |
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|
|
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3. |
Upon
the Effective Time, each one (1) shares of Common Stock, par value $0.0001 per share issued and outstanding immediately prior to
the Effective Time either issued and outstanding or held by the Corporation as treasury stock shall be split into ten (10) validly
issued, fully paid and non-assessable shares of Common Stock without any further action by the Corporation or the holder thereof
(the “Forward Split”). Each certificate that immediately prior to the Effective Time represented shares of Common
Stock (“Old Certificates”) shall thereafter represent that number of shares of Common Stock into which the shares
of Common Stock represented by the Old Certificate shall have been split. |
|
4. |
This
Articles of Amendment were duly adopted in accordance with Section 607.1001 of the FBCA. The Board of Directors duly adopted resolutions
setting forth and declaring advisable this Articles of Amendment and directed that the proposed amendments be considered by the stockholders
of the Corporation. The Articles of Amendment were duly approved and adopted by written consent of stockholders holding a majority
of the Corporation’s voting power as of the record date pursuant to Section 607.0704 of the FBCA. |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE FOLLOWS]
IN
WITNESS WHEREOF, QDM International Inc. has caused this Articles of Amendment to Articles of Incorporation to be executed by its
duly authorized officer as of this ______ day of _____, 2023.
|
QDM
INTERNATIONAL INC. |
|
|
|
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By: |
|
|
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Name:
Huihe Zheng |
|
|
Title:
President and Chief Executive Officer |
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