Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - QDM International Inc. | e2147_ex99-2.htm |
| EX-99.1 - EXHIBIT 99.1 - QDM International Inc. | e2147_ex99-1.htm |
| EX-16.1 - EXHIBIT 16.1 - QDM International Inc. | e2147_ex16-1.htm |
| EX-10.3 - EXHIBIT 10.3 - QDM International Inc. | e2147_ex10-3.htm |
| EX-10.2 - EXHIBIT 10.2 - QDM International Inc. | e2147_ex10-2.htm |
| EX-10.1 - EXHIBIT 10.1 - QDM International Inc. | e2147_ex10-1.htm |
| EX-3.3 - EXHIBIT 3.3 - QDM International Inc. | e2147_ex3-3.htm |
| EX-2.1 - EXHIBIT 2.1 - QDM International Inc. | e2147_ex2-1.htm |
| 8-K - FORM 8-K - QDM International Inc. | e2147_8k.htm |
Exhibit 99.3
Unaudited pro forma condensed combined financial statements
The following unaudited pro forma condensed combined financial statements give effect to the reverse acquisition between QDM International Inc. (“QDM”) and QDM Holdings Limited (“QDM BVI”).
qdm INTERNATIONAL INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEETS
AS OF JUNE 30, 2020
(UNAUDITED)
(US$, except share data and per share data, or otherwise noted)
| QDM International Inc. | QDM Holdings Limited | Pro Forma Adjustments |
Notes | Combined | ||||||||||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Current Assets | ||||||||||||||||||||||||
| Cash and cash equivalents | 282 | 82,564 | 82,846 | |||||||||||||||||||||
| Accounts receivables, net | - | 5,278 | 5,278 | |||||||||||||||||||||
| Prepaid expenses | 21,000 | 16,238 | 37,238 | |||||||||||||||||||||
| Due from related parties | - | 10,009 | (10,009 | ) | 3 | (a) | - | |||||||||||||||||
| Total current assets | 21,282 | 114,089 | 125,362 | |||||||||||||||||||||
| Non-current assets | ||||||||||||||||||||||||
| Property and equipment, net | - | 251 | 251 | |||||||||||||||||||||
| Total assets | 21,282 | 114,340 | 125,613 | |||||||||||||||||||||
| Liabilities and shareholders’ equity | ||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||
| Accounts payable and accrued liabilities | 16,748 | 19,114 | 35,861 | |||||||||||||||||||||
| Due to related parties | 67,224 | 41,890 | (10,009 | ) | 3 | (a) | 99,105 | |||||||||||||||||
| Total current liabilities | 83,972 | 61,004 | 134,967 | |||||||||||||||||||||
| Total liabilities | 83,972 | 61,004 | 134,967 | |||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||||||
| Common stock | 167 | 50,000 | (50,000 | ) | 3 | (b) | 167 | |||||||||||||||||
| Preferred stock | 135 | - | 90 | 3 | (b) | 225 | ||||||||||||||||||
| Treasury stock | (60,395 | ) | - | (60,395 | ) | |||||||||||||||||||
| Subscriptions receivable | - | (48,718 | ) | (48,718 | ) | |||||||||||||||||||
| Additional paid-in-capital | 9,049,699 | 408,974 | 49,910 | (9,052,296 | ) | 3 | (b) | 456,287 | ||||||||||||||||
| Deficit | (9,052,296 | ) | (356,920 | ) | 9,052,296 | 3 | (b) | (356,920 | ) | |||||||||||||||
| Total shareholders’ equity | (62,690 | ) | 53,336 | (9,354 | ) | |||||||||||||||||||
| Total liabilities and shareholders’ equity | 21,282 | 114,340 | 125,613 | |||||||||||||||||||||
F-1
qdm INTERNATIONAL INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2020
(UNAUDITED)
(US$, except share data and per share data, or otherwise noted)
| QDM International Inc. | QDM Holdings Limited | Pro Forma Adjustments |
Notes | Combined | ||||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||||
| Revenue | - | 64,454 | 64,454 | |||||||||||||||
| Costs of sales | - | 61,070 | 61,954 | |||||||||||||||
| Gross profit | - | 3,384 | 3,384 | |||||||||||||||
| Operating costs and expenses | ||||||||||||||||||
| General and administrative | 121,187 | 60,727 | 181,914 | |||||||||||||||
| Total operating costs and expenses | 121,187 | 60,727 | 181,914 | |||||||||||||||
| Loss from operations | (121,187 | ) | (57,343 | ) | (178,530 | ) | ||||||||||||
| Other (income) expenses: | ||||||||||||||||||
| Finance costs | 2,365 | 77 | 2,442 | |||||||||||||||
| Other expense (income), net | 17 | (3,596 | ) | (3,579 | ) | |||||||||||||
| Total other (income) expenses | 2,382 | (3,519 | ) | (1,137 | ) | |||||||||||||
| Loss before provision for income taxes | (123,569 | ) | (53,824 | ) | (177,393 | ) | ||||||||||||
| Net income (loss) | ||||||||||||||||||
| Basic & diluted net loss per share | (0.09 | ) | - | (0.14 | ) | |||||||||||||
| Weighted average number of ordinary shares-basic and diluted | 1,312,996 | - | 1,312,996 | |||||||||||||||
F-2
qdm INTERNATIONAL INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR FISCAL YEAR PERIODS
(UNAUDITED)
(US$, except share data and per share data, or otherwise noted)
QDM International Inc. (Fiscal year ended December 31, 2019) | QDM Holdings Limited (Fiscal year ended March 31, 2020) | Pro Forma Adjustments |
Notes | Combined | ||||||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||||||
| Revenue | - | 221,289 | 221,289 | |||||||||||||||||
| Costs of sales | - | 200,011 | 200,011 | |||||||||||||||||
| Gross profit | - | 21,278 | 21,278 | |||||||||||||||||
| Operating costs and expenses | ||||||||||||||||||||
| General and administrative | 440,165 | 151,893 | 592,058 | |||||||||||||||||
| Total operating costs and expenses | 440,165 | 151,893 | 592,058 | |||||||||||||||||
| Loss from operations | (440,165 | ) | (130,615 | ) | (570,780 | ) | ||||||||||||||
| Other (income) expenses: | ||||||||||||||||||||
| Finance costs | 27,069 | 84 | 27,153 | |||||||||||||||||
| Other expense (income), net | - | (105,616 | ) | (105,616 | ) | |||||||||||||||
| Total other (income) expenses | 27,069 | (105,532 | ) | (78,463 | ) | |||||||||||||||
| Loss before provision for income taxes | (467,234 | ) | (25,083 | ) | (492,317 | ) | ||||||||||||||
| Net income (loss) | ||||||||||||||||||||
| Basic & diluted net loss per share | (0.91 | ) | - | (0.96 | ) | |||||||||||||||
| Weighted average number of ordinary shares-basic and diluted | 513,251 | - | 513,251 | |||||||||||||||||
F-3
qdm Internatonal INc.
NOTES TO PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Share exchange transaction
On October 21, 2020, QDM, a Florida corporation, entered into a share exchange agreement (the “Share Exchange Agreement”) with QDM BVI, a private operating corporation, and Huihe Zheng, the sole shareholder and director of QDM BVI, to acquire all the issued and outstanding capital stock of QDM BVI in exchange for 900,000 shares of a newly designated Series C Convertible Preferred Stock, par value $0.0001 per share, of QDM.
2. Basis of presentation
The acquisition was accounted for as a reverse acquisition effected by the Share Exchange Agreement, wherein QDM BVI is considered the acquirer and QDM is considered the acquiree for accounting purposes. The acquisition is of a private operating company (QDM BVI) by a corporation (QDM) resulted in the owners and management of the private company having actual or effective voting and operating control of the combined company. Therefore, the reverse acquisition is deemed to be a capital transaction in substance, rather than a business combination. Accordingly, the assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill or other intangible assets have been recognized.
The pro forma condensed combined financial statements are based on QDM’s historical financial statements and QDM BVI’s historical consolidated financial statements as adjusted to give effect to the reverse acquisition. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2020 and the 12 months ended December 31, 2020 for QDM and 12 months ended March 31, 2020 for QDM BVI give effect to these transactions as if they had occurred on the first date the above respective periods. The unaudited pro forma condensed combined balance sheets as of June 30, 2020 give effect to these transactions as if they had occurred on June 30, 2020.
The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the reverse acquisition, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the reverse acquisition.
The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein.
The pro forma condensed financial statements should be read in conjunction with a reading of the historical financial statements and accompanying notes of the QDM included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and of QDM BVI’s consolidated financial statements for the year ended March 31, 2020 included in this Form 8-K.
3. Pro forma adjustments
The adjustments included in the pro forma combined balance sheets are as follows:
| (a) | The elimination of intercompany receivable and payable between QDM and QDM BVI; and |
| (b) | The elimination of historical equity of QDM BVI of $50,000 common stock and issuance of 900,000 preferred shares of QDM at par value of $0.0001 per share to the shareholder of QDM BVI as a result of the reverse acquisition; and ii) the elimination of QDM’s accumulated deficit before the reverse acquisition. |
F-4