AB International (OTCPink: ABQQ) grows FY 2025 revenue, eyes reverse split and AI pivot
AB International Group Corp. reported stronger results for the year ended August 31, 2025, with revenue of $6,368,563 versus $3,300,467 a year earlier, driven mainly by NFT MMM platform licensing, sales of movie and TV copyrights and broadcast rights, embedded marketing and advertising services, and consulting related to AI-based solutions. Theater revenue from the Mt. Kisco cinema fell to $291,060 from $432,012 as fewer popular films were shown.
Operating costs and expenses rose to $4,487,513, but the company still generated net income of $1,455,448, up from $542,331 in 2024. Despite profitability, cash flow from operations was negative $2,318,961, largely due to heavy investment in content, leaving a working capital deficit of about $3.3 million as of August 31, 2025 and an accumulated deficit near $10.4 million, raising going concern risk.
The company massively expanded its share count through 2025 equity issuances, reaching 8,121,266,321 common shares outstanding as of November 28, 2025, and issued large warrant positions now accounted for as liabilities. The board has authority to implement a 1‑for‑2,000 to 1‑for‑20,000 reverse split and to change the name to AI Era Corp., pending FINRA effectiveness, while pursuing NFT, AI-generated content (ufilm AI IP), and cinema-focused strategies in a highly competitive and regulated environment.
Positive
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Insights
ABQQ shows strong revenue and profit growth but at the cost of heavy dilution, weak liquidity, and significant warrant overhang.
AB International nearly doubled revenue to
However, operating cash flow was negative
The board’s authority to effect a reverse split between 1‑for‑2,000 and 1‑for‑20,000, alongside a planned rebrand to AI Era Corp., underscores efforts to address an extremely low OTC Pink share price and capital structure constraints. The business mix is also shifting: the proprietary ABQQ.tv platform was sold in
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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TABLE OF CONTENTS
| Page | ||
| PART I | ||
| Item 1. | Business | 3 |
| Item 1A. | Risk Factors | 6 |
| Item 1B. | Unresolved Staff Comments | 14 |
| Item 1C. | Cybersecurity | 14 |
| Item 2. | Properties | 15 |
| Item 3. | Legal Proceedings | 15 |
| Item 4. | Mine Safety Disclosure | 15 |
| PART II | ||
| Item 5. | Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities | 16 |
| Item 6. | [Reserved] | 19 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 25 |
| Item 8. | Financial Statements and Supplementary Data | 25 |
| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | 26 |
| Item 9A. | Controls and Procedures | 26 |
| Item 9B. | Other Information | 27 |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | 27 |
| PART III | ||
| Item 10. | Directors, Executive Officers and Corporate Governance | 28 |
| Item 11. | Executive Compensation | 30 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 31 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 32 |
| Item 14. | Principal Accountant Fees and Services | 34 |
| PART IV | ||
| Item 15. | Exhibits, Financial Statement Schedules | 35 |
| Item 16. | Form 10-K Summary | 37 |
| Signatures | ||
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PART I
Item 1. Business
Company Overview
We are an intellectual property (IP) and movie investment and licensing firm, focused on acquisitions and development of various intellectual property, including the acquisition and distribution of movies and TV shows.
In addition to licensing and selling rights to movies and TV shows, we are also engaged in licensing our NFT MMM platform and providing technical service; running our physical movie theater in New York; and providing marketing and consulting services in the media industry.
On April 22, 2020, we announced the first phase development of our video streaming service. The online service will be marketed and distributed internationally under the brand name ABQQ.tv. Our team sources dramas and films to provide video streaming service on ABQQ.tv. Our video streaming website (www.ABQQ.tv) was officially launched on December 29, 2020, and management has been sourcing dramas and films to provide video streaming service on ABQQ.tv. On January 27, 2025, the ABQQ.tv was sold to a third party. Subsequently, the Company transitioned to utilizing a third-party platform for broadcasting its films and TV dramas starting from March 2025.
As of August 31, 2025, we have acquired 19 movie copyrights and broadcast rights, 75 episodes of TV drama and sitcom, a 20-episode, a 10-episode TV drama and 2,577 series of short-form drama. The purchase and sale of films and TV dramas copyrights continue to be one of the revenue streams for the Company.
On October 21, 2021, the Company entered into a Lease Agreement (the “Lease”) with Martabano Realty Corp. (the “Landlord”), pursuant to which the Company agreed to lease approximately 8,375 square feet of in what is known as the Mt. Kisco Theatre at 144 Main Street, Mount Kisco, New York. The term of the Lease is five years plus a free rent period. The total monthly rent was $14,366 for the first two years, and $20,648 for the third year including real estate related taxes and landlord’s insurance. The Lease contains customary provisions for real property leases of this type, including provisions allowing the Landlord to terminate the Lease upon a default by the Company.
The space was formerly used as a theatre with a total of 5 screens and 466 sets for screening films. The former theatre opened on December 21, 1962 with Hayley Millsin “In Search of the Castaways.” It was a replacement for the town’s other movie theatre that burned down. It was later twinned and further divided into 5 screens. It was operated for years by Lesser Theaters, then bought by Clearview Cinemas. In June, 2013 it was taken over by Bow-Tie Cinemas when they took most Clearview locations. It lasted until March, 2020 when it was closed by the Covid-19 pandemic. It was announced in September 2020 that the closure would be permanent.
On May 5, 2022, we incorporated AB Cinemas NY, Inc. in New York, NY, for the purpose of operating the Mt. Kisco Theatre. The theatre started operations in October 2022. We still intend to follow the strategy of having the physical locations for movies and other media. We expect to generate increased revenue from our movie theater business line in the coming years.
On April 27, 2022, we purchased a unique Non-Fungible Token (“NFT”) movie and music marketplace, named the NFT MMM from Stareastnet Portal Limited, an unrelated party, which included an APP “NFTMMM” on Google Play, and full right to the website: stareastnet.io.
NFTs are digital assets with a unique identifier that is stored on a blockchain, and NFTs are tradable rights of digital assets (pictures, music, films, and virtual creations) where ownership is recorded in blockchain smart contracts. On August 6, 2022, the Company licensed NFT MMM platform to a third party, Anyone Pictures Limited, to allow access of NFTMM platform and platform data on both our app and website for one year starting from August 20, 2022 to August 19, 2023 for a monthly license fee of $60,000. Pursuant to the agreement, we also charged a one time implementation service and consulting fee of $100,000. Subsequent to the license renewal on November 1, 2023, we continued licensing the NFT MM platform to the same third party from November 1, 2023 until October 31, 2025 for a monthly license fee of $57,000. The agreement was terminated on January 31, 2025. Starting on February 21, 2025, the Company entered into a stock purchase agreement with Anyone Pictures Limited. Subsequent to the license renewal on June 1, 2025, we continued licensing the NFT MMM platform to the same party from June 1, 2025 until May 31, 2026 for a monthly license fee of $50,000. The Company retained the ownership and copyright of the NFT MMM platform, including the APP “NFT MMM”, and the website: stareastnet.io.
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On May 5, 2025 (the “Effective Date”), we entered into a Contribution Agreement (the “Contribution Agreement”) with AI+ Hubs Corp, a Delaware corporation (“AI+ Hubs”) and newly formed wholly owned subsidiary. Pursuant to the terms of the Contribution Agreement, the Company contributed to AI+ Hubs the assets and liabilities associated with the following:
1) Intellectual property (IP) of ufilm AI Generated Creation, Productions Synthesis and Release System of Movie, TV series and short series;
2) copyrights of short series; and
3) 100% interest of the subsidiary, AB Cinemas NY, Inc.
AI+ Hubs accepted the assets and assumed the liabilities, as of the Effective Date. In exchange for the contribution, AI+ Hubs issued to the Company 6,680,500 shares common stock of AI+ Hubs. After the above contribution, AI+ Hubs shall engage in fundraising efforts to obtain approximately $1m in financing from outside sources. As of 31 May, 2025, the company and its subsidiary AI+ Hubs Corp decided not to exercise contribution agreement.
On June 1, 2025 (the “Effective Date”), we entered into a revised agreement with AI+ Hubs. Pursuant to the terms of the agreement, the Company contributed to AI+ Hubs the assets associated with the following:
1) copyrights of Movie, TV series and short series and all subsequent acquired assets except of NFT MMM IP
2) all equity of the subsidiary, AB Cinemas NY, Inc.
Starting from June 1, 2025, the operations of the Company were transferred to its wholly-owned subsidiaries, AI+ Hubs and AB Cinemas NY, Inc. On June 5, 2025, the Company amended the Original Agreement to require that all prepaid or executed purchase agreements and all assets acquired by the Parent on or after that date be automatically transferred to the Subsidiary at their purchase price upon acquisition, with this arrangement continuing until modified by a future amendment.
Also on May 5, 2025, the Company entered into an agreement to acquire a license to intellectual property (IP) of ufilm from AIHUB Releasing, Inc. for total consideration of $2,000,000. The original settlement terms required: $500,000 to be paid in cash within 10 days of the agreement date, and the remaining $1,500,000 to be settled within 10 days following the successful completion of related SaaS system testing.
On June 2, 2025, the parties mutually agreed to amend the terms of the agreement. Under the revised terms, the company fully settled the purchase consideration by transferring its NFT MMM intellectual property, to the AIHUB Releasing, Inc.
On July 12, 2025, the parties mutually further agreed to modify the terms of the agreement. Under the amended terms, the Company agreed to acquire all rights to the ufilm AI IP from AIHUB Releasing, Inc. for a cash consideration of $300,000, replacing the originally agreed transfer of the Company’s NFT MMM IP.
On June 5, 2025, the Board of Directors of the Company approved the granting of discretionary authority to the Board of Directors of the Company, at any time or times for a period of 12 months after the date of the written consent, to adopt an amendment to our articles of incorporation to effect a reverse split of our issued and outstanding common stock, par value $0.001 per share, in a range of not less than 1-for-2,000 and not more than 1-for-20,000.
On June 5, 2025, the Board of Directors of the Company approved to authorize a change in the name of the Company from “AB International Group Corp.” to “AI Era Corp.” The reverse split and name change are subject to review by FINRA and receipt of a market effective date.
The information on or accessible through our websites is not part of and is not incorporated by reference into this Annual Report on Form 10-K, and the inclusion of our website addresses in this Annual Report on Form 10-K is only for reference. We were incorporated under the laws of the State of Nevada on July 29, 2013. Our fiscal year end is August 31.
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Competition
Our theatre is subject to varying degrees of competition in the geographic areas in which it operates. Competition is often intense with respect to attracting patrons, licensing motion pictures and finding new theatre locations.
Our online platform ABQQ.tv has not yet generated any revenue, whereas the major competitors in this field, including Netflix, Amazon and Apple, have far superior resources and brand notoriety. On January 27, 2025, the Company sold its proprietary broadcasting platform (ABQQ.tv). Subsequently, the Company entered into an arrangement with a third-party platform to broadcast its film and TV drama copyrights in March 2025. We are hoping to capture some market share through pricing, unique media offerings, and marketing campaigns when funds are available. We cannot assure you that we will be successful in these endeavors.
For the NFT business, there are a number of competitors, and we are new in the industry. We intend to market our NFT MMM platform for licensing opportunities as we have already, but there are no assurances that we will be able to compete in this market.
Government Regulation
Our operations across all business segments—movie theater operations, intellectual property acquisition and licensing, NFT MMM platform licensing, future AI-generated content production through ufilm AI IP, and consulting services—are subject to a wide range of federal, state, local, and international government regulations. Compliance with these regulations is critical to our operations, and non-compliance could result in fines, legal liabilities, reputational harm, operational restrictions, or increased costs, any of which could materially adversely affect our business, financial condition, and results of operations. Below is an updated overview of the regulatory landscape affecting all areas of our business.
Movie Theater Operations (AB Cinemas NY, Inc.)
Our theater at Mt. Kisco, New York, must comply with Title III of the Americans with Disabilities Act (ADA), which mandates that public accommodations, including physical facilities, websites, and mobile apps, be accessible to individuals with disabilities. This requires that new construction, renovations, or alterations meet accessibility guidelines, such as providing wheelchair-accessible seating, restrooms, and digital interfaces. Non-compliance could lead to injunctive relief, fines, private litigation damages, or costly capital expenditures to remedy issues. As an employer, we are also subject to ADA requirements to provide reasonable accommodations to employees and job applicants with disabilities, provided such accommodations do not impose undue hardship. Additionally, our theater operations are governed by federal, state, and local laws regulating construction, renovation, and operational standards, including fire safety codes, health and sanitation requirements (e.g., for food and beverage services), and licensing for alcoholic beverage sales.
We are also subject to labor regulations, such as the Fair Labor Standards Act (FLSA), which governs minimum wage, overtime, and working conditions, as well as Occupational Safety and Health Administration (OSHA) standards for employee safety. During the COVID-19 pandemic, our theater faced governmental orders imposing operational restrictions, such as temporary closures, reduced seating capacities, social distancing protocols, enhanced cleaning measures, guest tracking, employee protection requirements, and limited operating hours. Although these restrictions have eased, future public health crises or new variants could prompt similar mandates, potentially disrupting operations or requiring significant compliance costs. Non-compliance with any of these regulations could lead to penalties, operational shutdowns, or loss of licenses, severely impacting our ability to generate revenue from ticket sales, food and beverage services, and advertisements.
Intellectual Property Acquisition and Licensing
Our acquisition and licensing of movie and TV drama copyrights, including 19 movie copyrights and various TV drama copyrights as of August 31, 2025, are subject to intellectual property laws enforced by the U.S. Copyright Office and international equivalents. We must ensure proper documentation, transfer, and licensing agreements to avoid infringement claims, which could result in costly litigation, damages, or loss of rights. Additionally, our licensing activities, particularly for international markets, are subject to export control regulations and trade compliance laws, such as those administered by the U.S. Department of Commerce and the Office of Foreign Assets Control (OFAC), which restrict transactions with certain countries or entities. Failure to comply could lead to fines, sanctions, or restrictions on our ability to license content globally. Our digital content distribution through third-party platforms post the sale of ABQQ.tv in January 2025 is also subject to data privacy and consumer protection laws, such as the California Consumer Privacy Act (CCPA) and, in international markets, the General Data Protection Regulation (GDPR). These regulations require robust data handling practices, transparency in data collection, and consumer consent mechanisms, with non-compliance potentially resulting in significant fines or reputational damage.
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NFT MMM Platform Licensing
The licensing of our NFT MMM platform, including the app and website (stareastnet.io), operates in a rapidly evolving regulatory environment for non-fungible tokens (NFTs) and blockchain-based assets. In the U.S., the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) may classify certain NFTs as securities or commodities, subjecting them to registration requirements, anti-fraud provisions, or trading restrictions under the Securities Act of 1933 or Commodity Exchange Act. Failure to comply could lead to enforcement actions, fines, or cessation of platform operations. Additionally, the Financial Crimes Enforcement Network (FinCEN) imposes anti-money laundering (AML) and Know Your Customer (KYC) requirements under the Bank Secrecy Act, necessitating robust measures to prevent the platform from being used for illicit activities like money laundering or terrorist financing. Non-compliance could result in penalties or platform shutdowns. Internationally, varying regulations on digital assets, such as bans or restrictions in certain jurisdictions, could limit our ability to license the platform globally or increase compliance costs. Consumer protection laws also apply, requiring clear disclosures about NFT ownership, risks, and transaction fees to avoid deceptive practice claims.
AI-Generated Content (ufilm AI IP)
The planned AI-generated content production through ufilm AI IP, which has not yet commenced, is currently in the testing phase and is expected to be adopted and initiated in December 2025. The use of our ufilm AI IP for generating movies, TV series, and short series is subject to emerging regulations governing artificial intelligence. In the U.S., proposed federal AI regulations, such as those under consideration by Congress or agencies like the Federal Trade Commission (FTC), may impose requirements for transparency, ethical use, and data sourcing, particularly if AI systems are trained on copyrighted materials. Non-compliance could lead to restrictions on AI use, fines, or intellectual property disputes. In Europe, the EU Artificial Intelligence Act, expected to be fully implemented by 2026, categorizes AI applications by risk level and could classify our content generation as high-risk, requiring stringent compliance with safety, transparency, and accountability standards. Violations could result in fines of up to 7% of global annual revenue. Additionally, U.S. and international copyright laws pose risks if our AI inadvertently incorporates protected works without authorization, potentially leading to litigation or loss of IP rights. Labor regulations, including those enforced by the National Labor Relations Board (NLRB), may also apply if AI adoption leads to disputes with entertainment unions (e.g., SAG-AFTRA) over job displacement, potentially resulting in strikes or contractual restrictions.
Employees
We currently have 8 employees.
Item 1A. Risk Factors
The following risk factors could materially affect our business, financial condition, and results of operations. These risk factors and other information in this Annual Report on Form 10-K should be carefully considered in evaluating our business. It is not possible to identify or predict all such factors and, therefore, the following should not be considered to be a complete statement of all the uncertainties we face.
Operational Risks
AB Cinemas theatres
| • | risks relating to motion picture production and theatrical performance; | |
| • | our lack of control over distributors of films; | |
| • | intense competition in the geographic areas in which we operate among exhibitors or from other forms of entertainment; | |
| • | increased use of alternative film delivery methods including premium video on demand or other forms of entertainment; | |
| • | shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date; | |
| • | AB Cinemas may not meet anticipated revenue projections, which could result in a negative impact upon operating results; | |
| • | failures, unavailability or security breaches of our information systems; |
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| • | dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with any future acquisitions; | |
| • | our ability to achieve expected synergies, benefits and performance from our strategic theatre acquisitions and strategic initiatives; | |
| • | the risk of severe weather events or other events caused by climate change disrupting or limiting operations; | |
| • | supply chain disruptions and labor shortages may negatively impact our operating results; and | |
| • | optimizing our theatre circuit through new construction and the transformation of our existing theatres may be subject to delay and unanticipated costs. | |
| • | Declining attendance trends post-pandemic, as consumers continue to prefer home viewing or reduce frequency of theater visits. | |
| • | Food safety and premises liability at the theater, including risks of contamination, allergic reactions, or customer injuries, potentially resulting in lawsuits, recalls, or reputational harm. | |
| • | Rising costs for theater upgrades, such as seating, equipment, and operations, to remain competitive with streaming services and modern entertainment venues. | |
| • | Weaker-than-expected performance of films in key markets, such as international regions like China, impacting global box office revenue |
NFT MMM license business
| • | The licensee(s) inability to pay license fees to the company for any reason, because they are first time running such business. | |
| • | Dependency on a single or limited licensees, as the company’s NFT MMM revenue relies heavily on agreements with entities like Anyone Pictures Limited; termination, non-renewal, or payment defaults due to the licensee’s financial instability or market shifts could significantly impact cash flow. | |
| • | Market volatility and declining interest in NFTs, as the NFT market has experienced significant downturns since its 2021 peak, with potential for further declines in 2025 due to crypto asset fluctuations, reduced investor enthusiasm, or economic factors, which could lower licensing fees, demand for the NFT MMM platform, or the value of associated digital assets. | |
| • | Fraud, scams, and security vulnerabilities in NFT operations, as the platform is susceptible to risks like rug pulls, wash trading, phishing attacks, or blockchain hacks, potentially leading to financial losses, legal liabilities, or loss of user trust if the company or its licensees are implicated. | |
| • | Money laundering and illicit activity risks, as without robust KYC procedures, the NFT marketplace could be exploited for money laundering or terrorist financing, attracting regulatory enforcement actions, fines, or shutdowns from authorities like the SEC or FinCEN. | |
| • | Lack of comprehensive NFT regulation, as evolving or absent global regulations could expose the company to unforeseen compliance costs, bans in certain jurisdictions, or retroactive penalties, particularly as NFTs intersect with securities laws. |
Regulatory Risks
AB Cinemas theatres
| • | general and international economic, political, regulatory, social and financial market conditions, economic unrest, terrorism, hostilities, cyber-attacks, war, widespread health emergencies, such as COVID-19 or other pandemics, and other geopolitical risks; | |
| • | review by antitrust authorities in connection with acquisition opportunities; | |
| • | risks relating to the incurrence of legal liability, including costs associated with ongoing securities class action lawsuits; | |
| • | increased costs in order to comply or resulting from a failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”) and pending future domestic privacy laws and regulations; | |
| • | geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance; and | |
| • | other risks referenced from time to time in filings with the SEC. | |
| • | Environmental and sustainability pressures, as increasing focus on climate impacts could require costly upgrades to the theater (e.g., energy efficiency) or affect content sourcing if partners demand eco-friendly practices, with non-compliance leading to fines or lost business. |
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Risks Related to AI Technology and Content Generation
The planned AI-generated content production through ufilm AI IP, which has not yet commenced, is currently in the testing phase and is expected to be adopted and initiated in December 2025.
| • | Intellectual property infringement claims related to AI-generated content, as the company’s acquisition and use of the ufilm AI IP for generating movies, TV series, and short series exposes it to potential lawsuits if the AI system is trained on or inadvertently incorporates copyrighted materials without proper authorization, with evolving legal interpretations of AI training data leading to costly litigation, settlements, or restrictions on using the technology. | |
| • | Regulatory developments in AI usage, as increasing scrutiny from governments and industry bodies (e.g., potential U.S. federal AI regulations or EU AI Act implications) could impose new compliance requirements, ethical guidelines, or bans on certain AI applications in creative industries, disrupting operations and increasing costs. | |
| • | Technological obsolescence and performance limitations of AI tools, as rapid advancements in AI could render the ufilm IP outdated, or the technology may fail to produce high-quality, marketable content, leading to wasted investments, reduced revenue from AI-driven productions, and reputational damage if outputs do not meet audience or industry standards. | |
| • | Union and labor disputes over AI in production, as opposition from entertainment unions (e.g., SAG-AFTRA or similar groups) regarding AI’s role in replacing human creatives could result in strikes, boycotts, or contractual restrictions, particularly affecting content synthesis and release systems. | |
| • | Ethical and public backlash risks, as widespread concerns about AI diminishing human creativity or leading to job losses in the film industry could harm the company’s brand, reduce partnerships, or trigger consumer boycotts, especially as AI becomes more prominent in Hollywood. |
Risks Related to Digital Content Licensing and Distribution
| • | Dependency on third-party streaming platforms, as following the sale of ABQQ.tv, reliance on external platforms for broadcasting films and TV dramas introduces risks of unfavorable contract terms, algorithm changes, sudden termination, or platform outages, which could limit content visibility and revenue. | |
| • | Piracy and unauthorized distribution of content, as acquired copyrights and broadcast rights are vulnerable to digital piracy, especially in international markets, potentially eroding revenue from sales, licensing, or embedded marketing services without effective anti-piracy measures. | |
| • | Complexities in content licensing agreements, as managing intricate terms for geographic restrictions, expiration dates, or multi-platform rights could lead to inadvertent breaches, disputes with rights holders, or lost opportunities if the company fails to track or renew licenses amid growing data volumes. | |
| • | Cybersecurity threats to digital assets, as hacking, data breaches, or ransomware targeting the company’s digital content storage, distribution systems, or consulting services could result in theft of IP, operational disruptions, or exposure of sensitive client data. | |
| • | Rising costs in content acquisition and delivery, as intensifying competition for high-quality movies and TV dramas, combined with inflation in hosting, bandwidth, or marketing expenses, may strain margins, especially if revenue from copyrights sales does not scale accordingly. |
Risks Related to Macroeconomics, COVID-19 Restrictions and Other Conditions
Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations and financial condition.
Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for our theater, and the other products and services we offer. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.
In addition to an adverse impact on demand for our theater, and the other products and services we offer, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our ability to implement our business plans. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
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Adverse economic conditions can also lead to increased credit and collectability risk on our trade receivables; the failure of derivative counterparties and other financial institutions; limitations on our ability to issue new debt; reduced liquidity; and declines in the fair values of our financial instruments. These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price.
Our business can be impacted by political events, trade and other disputes, war, terrorism, natural disasters, public health issues, riots, accidents, and other business interruptions.
Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues (such as COVID-19), riots, accidents and other business interruptions can harm or disrupt international commerce and the global economy and could have a material adverse effect on us and our customers, licensees, suppliers, distributors, and other channel partners.
Our theater is in a location that is prone to political events and unrest, accidents and other factors that may affect our financial condition. In addition, our operations are subject to the risk of interruption by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, labor disputes, public health issues, including pandemics such as the COVID-19 pandemic, and other events beyond our control. Global climate change is resulting in certain types of natural disasters, such as droughts, floods, hurricanes and wildfires, occurring more frequently or with more intense effects. Such events can make it difficult or impossible for us to maintain operations with our customers, create delays and inefficiencies in our supply and manufacturing chain, and result in slowdowns and outages to our product and service offerings, and negatively impact consumer spending and demand in affected areas. Following an interruption to our business, we can require substantial recovery time, experience significant expenditures to resume operations, and lose significant sales.
Our operations are also subject to the risks of accidents that may occur on our premises. Despite safety measures, accidents could occur and could result in serious injuries or loss of life, disruption to our business, and harm to our reputation. Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for consumer products; the imposition of protective public safety measures, such as shutdowns and restrictive mandates; and disruptions in our operations, supply chain and sales and distribution channels, resulting in interruptions to our theater and the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
Risks Related to Our Financial Condition
Because we have a limited operating history, you may not be able to accurately evaluate our operations.
We have had limited operations to date and have generated limited revenues. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business, and additional costs and expenses that may exceed current estimates. We expect to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will continue to generate operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
We are dependent on outside financing for continuation of our operations.
Because we have generated limited revenue and incurred operating losses in prior years, we are completely dependent on the continued availability of financing in order to continue our business. There can be no assurance that financing sufficient to enable us to continue our operations will be available to us in the future.
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Risks Related to Legal Uncertainty
Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and new SEC regulations, are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed.
If we fail to comply with the new rules under the Sarbanes-Oxley Act related to accounting controls and procedures, or if material weaknesses or other deficiencies are discovered in our internal accounting procedures, our stock price could decline significantly.
We are exposed to potential risks from legislation requiring companies to evaluate internal controls under Section 404(a) of the Sarbanes-Oxley Act of 2002. As a smaller reporting company, we will be exempt from auditor attestation requirements concerning any such report so long as we are a smaller reporting company. We have not yet had an independent auditor determined whether our internal control procedures are effective and therefore there is a greater likelihood of material weaknesses in our internal controls, which could lead to misstatements or omissions in our reported financial statements as compared to issuers that have conducted such evaluations.
If material weaknesses and deficiencies are detected, it could cause investors to lose confidence in our company and result in a decline in our stock price and consequently affect our financial condition. In addition, if we fail to achieve and maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock could drop significantly. In addition, we cannot be certain that additional material weaknesses or significant deficiencies in our internal controls will not be discovered in the future.
Risks Associated with Management and Control Persons
If we fail to attract and retain qualified senior executive and key technical personnel, our business will not be able to expand.
We are dependent on the continued availability of Chiyuan Deng, and the availability of new employees to implement our business plans. The market for skilled employees is highly competitive, especially for employees in the service industry. Although we expect that our compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain the services of all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.
Our personnel may voluntarily terminate their relationship with us at any time, and competition for qualified personnel is intense. The process of locating additional personnel with the combination of skills and attributes required to carry out our strategy could be lengthy, costly and disruptive.
If we lose the services of key personnel, or fail to replace the services of key personnel who depart, we could experience a severe negative effect on our financial results and stock price. In addition, there is intense competition for highly qualified bilingual and “people friendly” personnel in the locations where we principally operate. The loss of the services of any key personnel, marketing or other personnel or our failure to attract, integrate, motivate and retain additional key employees could have a material adverse effect on our business, operating and financial results and stock price.
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Mr. Deng owns a significant percentage of the voting power of our stock and will be able to exercise significant influence over the composition of our Board of Directors, matters subject to stockholder approval and our operations.
As of the date of this filing, Chiyuan Deng owns 100,000 shares of our Series A Preferred Stock, which has the voting power of 51% of the total vote of shareholders. As a result of his equity ownership interest, voting power and the contractual rights described above, Mr. Deng currently is in a position to influence, subject to our organizational documents and Nevada law, the composition of our Board of Directors and the outcome of corporate actions requiring stockholder approval, such as mergers, business combinations and dispositions of assets, among other corporate transactions. In addition, this concentration of voting power could discourage others from initiating a potential merger, takeover or other change of control transaction that may otherwise be beneficial to us, which could adversely affect the market price of our securities.
Risks Related to Subsidiary Operations and Corporate Structure
Challenges in subsidiary management and intercompany transactions, as the transfer of operations to wholly-owned subsidiaries like AI+ Hubs Corp. and AB Cinemas NY, Inc. increases risks of control issues, tax complications, or inefficiencies in resource allocation, particularly if fundraising efforts fail.
The transfer of operations to wholly-owned subsidiaries like AI+ Hubs Corp. and AB Cinemas NY, Inc. increases risks of ineffective oversight, tax complications, and resource allocation inefficiencies. Misaligned strategies or inadequate controls could lead to operational delays, financial reporting errors, or asset misappropriation. Complex intercompany transactions, including asset transfers and pricing, may trigger tax audits, penalties, or disputes with authorities like the IRS. Failure to secure planned financing , could impair subsidiary operations, necessitate parent company support, exacerbate our working capital deficit, or lead to asset impairments, adversely affecting our financial condition and ability to execute our business plan.
Risks Related to Strategic Initiatives and Market Position
Delays or adverse market reactions to reverse stock split and name change, as the proposed 1-for-2,000 to 1-for-20,000 reverse split and rebranding to “AI Era Corp.” may face FINRA review delays, trigger negative investor sentiment (often viewing splits as distress signals), or cause trading volatility on the OTC market
The proposed 1-for-2,000 to 1-for-20,000 reverse stock split and rebranding to “AI Era Corp.,” approved on June 5, 2025, pending FINRA review, may face delays that create uncertainty, trigger negative investor sentiment by signaling financial distress, or increase trading volatility on the OTCPink market, where our thinly traded stock (symbol “ABQQ”) is quoted, potentially depressing share prices and deterring investment. These actions could disrupt our ability to raise capital for initiatives like AI+ Hubs Corp. or theater operations, exacerbate our $3.3 million working capital deficit as of August 31, 2025, and raise shareholder concerns about dilution or governance due to the Board’s ability to issue additional shares and Chiyuan Deng’s 51% voting control via Series A Preferred Stock, all of which could materially impair our financial condition and strategic execution.
Risks Related to Our Securities and the Over the Counter Market
If a market for our common stock does not develop, shareholders may be unable to sell their shares.
Our common stock is quoted under the symbol “ABQQ” on the OTCPink operated by OTC Markets Group, Inc, an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.
Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.
Our common stock price may be volatile and could fluctuate widely in price, which could result in substantial losses for investors.
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The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including:
| • | technological innovations or new products and services by us or our competitors; |
| • | government regulation of our products and services; |
| • | the establishment of partnerships with other technology companies; |
| • | intellectual property disputes; |
| • | additions or departures of key personnel; |
| • | sales of our common stock; |
| • | our ability to integrate operations, technology, products and services; |
| • | our ability to execute our business plan; |
| • | operating results below expectations; |
| • | loss of any strategic relationship; |
| • | industry developments; |
| • | economic and other external factors; and |
| • | period to period fluctuations in our financial results. |
Because we have nominal revenues to date, you should consider any one of these factors to be material. Our stock price may fluctuate widely as a result of any of the above.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
As a new investor, you will experience substantial dilution as a result of future equity issuances.
In the event we are required to raise additional capital we may do so by selling additional shares of common stock thereby diluting the shares and ownership interests of existing shareholders.
Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a
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standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.
In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority’ requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
Rule 144 sales in the future may have a depressive effect on our stock price as an increase in supply of shares for sale, with no corresponding increase in demand will cause prices to fall.
All of the outstanding shares of common stock held by the present officers, directors, and affiliate stockholders are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company’s outstanding common stock. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of six months if the company is a current reporting company under the 1934 Act. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
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We do not intend to pay dividends.
We do not anticipate paying cash dividends on our common stock in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally available to pay dividends, we may nevertheless decide in our sole discretion not to pay dividends. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our board of directors may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are rapid, there is no assurance with respect to the amount of any such dividend.
We have the right to issue additional common stock and preferred stock without consent of shareholders. This would have the effect of diluting investors’ ownership and could decrease the value of their investment
We are authorized to issue up to 10,000,000,000 shares of common stock, of which there were 8,121,266,321 shares issued and outstanding as of November 28, 2025. In addition, our articles of incorporation authorize the issuance of up to 10,000,000 shares of preferred stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. We have designated and authorized, 100,000 shares of Series A Preferred Stock. As of November 28, 2025, there were issued and outstanding 100,000 shares of our Series A Preferred Stock.
The shares of authorized but undesignated preferred stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further shareholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferential voting, conversion rights, and preferences as to dividends and distributions on liquidation.
Item 1B. Unresolved Staff Comments
This information is not required for smaller reporting companies.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
Our management team is responsible for assessing and managing our material risks from cybersecurity threats. We rely on our information technology to operate our business. As such, we have policies and processes designed to protect our information technology systems, and resolve issues in a timely manner in the event of a cybersecurity threat or incident.
We have designed our business applications and hosting services to minimize the impact that cybersecurity incidents could have on our business and have identified back-up systems where appropriate. We will seek to further mitigate cybersecurity risks through a combination of monitoring and detection activities, use of anti-malware applications, employee training, quality audits and communication and reporting structures , among other processes. We will engage a third-party consultant, if needed, to assist us with our cybersecurity risk management framework, including the monitoring and detection of cybersecurity threats and responding to any cybersecurity threats or incidents.
As of August 31, 2025, we have not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements. Although cybersecurity risks have not materially affected us, including our business strategy, results of operations or financial condition, to date, we face numerous and evolving cybersecurity threats in our business.
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Item 2. Properties
In September 2023, the Company entered into a one month lease with a third party for an office space in Hong Kong, incurring a monthly rent of $766. The lease was ceased as of November 30, 2023.
On October 21, 2021, the Company signed a lease agreement to lease “the Mt. Kisco Theatre”, a movie theater, for five years plus the free rent period which commences four months from the lease commencement date. The theatre consists of approximately 8,375 square feet, and the total monthly rent is $14,366 for the first two years, and $20,648 for the third year including real estate related taxes and landlord’s insurance.
On January 31, 2024, the end of the first two years of rental period, the landlord agreed to continue to receive $14,366 from February 2024 to August 2025. The reduced rental payments are accounted for as a rent concession and recognized in general and administrative expenses.
Total lease expense for the year ended August 31, 2025 and August 31, 2024 was $128,572 and $163,529, respectively. All leases are on a fixed payment basis. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Item 3. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is quoted under the symbol “ABQQ” on the OTC Pink operated by OTC Markets Group, Inc.
There is currently no active trading market for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.
Penny Stock
The Securities Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;(b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;(d) contains a toll-free telephone number for inquiries on disciplinary actions;(e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and;(f) contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with; (a) bid and offer quotations for the penny stock;(b) the compensation of the broker-dealer and its salesperson in the transaction;(c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, because our common stock is subject to the penny stock rules, stockholders may have difficulty selling those securities.
Holders of Our Common Stock
As of November 28, 2025, we had 8,121,266,321 shares of our common stock issued and outstanding, held by approximately 533 shareholders of record, with others holding shares in street name.
Dividends
We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of cash dividends on our common stock will depend on earnings, financial condition and other business and economic factors at such time as the board of directors may consider relevant. If we do not pay cash dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
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Issuer Repurchases
On July 20, 2024, we entered into Repurchase Agreements with seven shareholders, pursuant to which we agreed to repurchase an aggregate of 50,739,000 shares of common stock for cancellation in exchange for an aggregate of $50,739, which we funded with cash on hand. The repurchased shares are subsequently cancelled on August 26, 2024, except for 40,000 shares, which could not be cancelled due to a documentation issue. Therefore, the purchase price was adjusted to $50,699 and was settled in tranches. As of August 31, 2024, $38,485 of the purchase price has been paid. The remaining amount was settled in November 2024.
| Effective date | (a) Total number of shares (or units) purchased |
(b) Average price paid per share (or unit) |
(c) Total number of shares (or units) purchased as part of publicly announced plans or programs |
(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | |||||||||||||
| August 26, 2024 | 50,699,000 | $ | 0.001 | — | — | ||||||||||||
| Total | 50,699,000 | $ | 0.001 | — | — | ||||||||||||
The Company has no publicly announced plan or program for the purchase of shares.
Securities Authorized for Issuance under Equity Compensation Plans
We have no equity compensation plans.
Unregistered Sales of Equity Securities
The Company had the following equity activities during the year ended August 31, 2025:
Common shares
Issuance of restricted common shares
On February 21, 2025, the Company entered into a stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued 2,000,000,000 shares of the Company’s common stock with a value of $0.00015 per share for a gross proceed of $300,000.
On March 14, 2025, the Company issued 2,000,000,000 shares of the Company’s common stock valued at market price of $0.0002 per share for a total amount of $400,000 to Chiyuan Deng.
On May 15, 2025, the Company entered into another stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued 1,750,000,000 shares of the Company’s common stock with a value of $0.0002 per share for a gross proceed of $350,000.
The Company had the following equity activities during the year ended August 31, 2024:
Common shares
Issuance of restricted common shares
On October 5, 2023, the Board of Directors resolved to issue 225,000,000 shares of the Company’s restricted common stock, par value $0.001 per share, to Chiyuan Deng, the Chief Executive Officer, to pay off his accrued executive salaries of $45,000.
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Conversion of Series C preferred shares to common shares
During the year ended August 31, 2024, the Company issued a total of 1,056,681,936 common shares as the result of the conversion of total 174,421 Series C preferred shares.
Reverse Stock split
On June 12, 2023, the Board of Directors approved a reverse split for the Company’s issued and outstanding common stock, at a ratio of 1 share for every 10,000 shares, contingent upon receiving a market effectiveness date from FINRA. On September 8, 2023, however, the Board of Directors voted to cancel the proposed 1-for-10,000 reverse split, determining that it would not be in the best interest of the stockholders or the Company.
On April 22, 2024, the Board of Directors approved another reverse split of the Company’s issued and outstanding common stock, at a ratio of 1-for-2,000, also contingent upon FINRA approval. On August 19, 2024, the Board of Directors voted to cancel the planned 1-for-2,000 reverse split, concluding that proceeding with the action would not serve the best interests of the stockholders or the Company.
On June 5, 2025, the Company obtained the written consent of majority stockholders to grant discretionary authority to the Board of Directors of the Company, at any time or times for a period of 12 months after the date of the written consent, to adopt an amendment to the articles of incorporation to effect a reverse split of the issued and outstanding common stock within a range of 1-for-2,000 to 1-for-20,000. The exact ratio to be determined by the Board at a later date and is contingent upon receiving a market effectiveness date from FINRA.
Cancellation of Common shares
On February 5, 2024, Board of Directors of the Company resolved to cancel 235,000,000 shares of common stock in the Company.
Repurchase of common shares
On July 20, 2024, Board of Directors of the Company has repurchased 50,699,000 common shares from its several shareholders for an aggregate purchase price of $50,699, or $0.001 per share. The repurchased shares are subsequently cancelled on August 26, 2024. The purchase price was settled in tranches. As of August 31, 2024, $38,485 of the purchase price has been paid. The remaining amount was settled in November 2024.
Subscription of Common shares
On June 13, 2024, the Company entered into a Common Stock Purchase Agreement with Alumni Capital LP (“Alumni Capital”), a Delaware limited partnership. Pursuant to the Purchase Agreement, the Company has the right, but not the obligation to cause Alumni Capital to purchase up to $5 million of our common stock at the Investment Amount during the period beginning on the execution date of the Purchase Agreement and ending on the earlier of (i) the date on which Alumni Capital has purchased $5 million of our common stock shares pursuant to the Purchase Agreement or (ii) June 30, 2025.
Pursuant to the Purchase Agreement, the Investment Amount means seventy percent (70%) of the lowest daily Volume Weighted Average Price (“VWAP”) of the Common Stock five business days prior to the Closing of a Purchase Notice. No Purchase Notice will be made without an effective registration statement and no Purchase Notice will be in an amount greater than (i) $250,000 or (ii) three hundred percent (300%) of the Average Daily Trading Volume during the five business days prior to a Purchase Notice.
The Purchase Agreement provides that the number of our common stock shares to be sold to Alumni Capital will not exceed the number of shares that, when aggregated together with all other shares of our common stock which the investor is deemed to beneficially own, would result in the investor owning more than 4.99% of our outstanding common stock. The percentage may be increased to no more than 9.99% upon notice under the Purchase Agreement. The Purchase Agreement contains certain representations, warranties, covenants and events of default. The Closing occurred following the satisfaction of customary closing conditions.
As of June 30,2025, the agreement was expired and Alumni Capital LP did not purchase any shares.
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Preferred shares
The Company had no preferred share activities during the year ended August 31, 2025.
During the year ended August 31, 2024, the Company converted a total 174,421 Series C preferred shares into common shares.
On November 30, 2023, the Board of Directors of the Company resolved to withdraw the Amended Certificate of Designation for the Company’s Series C and Series D Preferred shares.
On December 1, 2023, the Board of Directors of the Company has resolved to withdraw the Certificate of Designation for the Company’s Series B Preferred Stock. The Company’s Series B Preferred Stock was cancelled during the year ended August 31, 2024.
Warrants
In consideration for the Common Stock Purchase Agreement signed with Alumni on June 13, 2024, the Company issued to Alumni Capital a Common Stock Purchase Warrant dated June 13, 2024 to purchase 1,943,304,434 shares of Common Stock, representing (50%) of the commitment amount of $5 million, at an exercise price of $0.00129 per share, subject to adjustments, and ending on the 5 years anniversary of the issuance date. The number of shares under the Common Stock Purchase Warrant is subject to adjustment based on the following formula: (i) fifty percent (50%) of the Commitment Amount, less the exercise value of all partial exercises prior to the Exercise Date, divided by (ii) the Exercise Price on the Exercise Date. The exercise price per was calculated by dividing $3,000,000 by the total number of issued and outstanding shares of common stock as of June 13, 2024. The exercise price is subject to change based on a change in the number of our outstanding shares. The aggregated fair value of the warrants is $970,945. The fair value has been estimated using the Black-Scholes pricing model with the following assumptions: market value of underlying common shares of $0.0005; risk free rate of 4.24%; expected term of 5 years; exercise price of $0.0013; volatility of 310.94%; and expected future dividends of $0.
Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to their own shares. The warrants were recorded at fair value on the date of grant as a component of shareholders’ equity.
As of August 31, 2025, the Company was authorized to issue 10 billion shares of common stock. At that date, the Company had approximately 8.0 billion common shares issued and outstanding. If all outstanding common share warrants were exercised, the Company would be required to issue approximately 6.7 billion additional shares, which would exceed the number of authorized shares available. Because the Company did not have a sufficient number of authorized and unissued shares available for settlement, the warrants no longer met the equity classification criteria under ASC 815-40 and were reclassified as liabilities.
Upon reclassification, the warrants were measured at fair value, resulting in a warrant liability of $1,338,389, with $970,945 derecognized from equity and a loss of $367,444 recorded in earnings for the year ended August 31, 2025. The fair value was determined using the Black-Scholes option-pricing model
The aggregate fair value of the warrants was estimated at $1,338,389, using the Black-Scholes pricing model with the following assumptions: market value of underlying common shares of $0.0002; risk free rate of 3.67%; expected term of 3.79 years; exercise price of $0.0004; volatility of 402.11%; and expected future dividends of nil.
As of August 31, 2025, 6,742,721,934 warrants in connection with two equity financings were outstanding, with weighted average remaining life of 3.77 years.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 6. Selected Financial Data
A smaller reporting company is not required to provide the information required by this Item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Except for statements of historical fact, some information in this document contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully because these statements discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able accurately to predict or control. Further, we urge you to be cautious of the forward-looking statements which are contained in this registration statement because they involve risks,
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uncertainties and other factors affecting our operations, market growth, service, products and licenses. The factors listed in the sections captioned “Risk Factors” and “Description of Business,” as well as other cautionary language in this registration statement and events in the future may cause our actual results and achievements, whether expressed or implied, to differ materially from the expectations we describe in our forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this registration statement are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
As used in this Annual Report on Form 10-K, unless the context otherwise requires, the terms the “Company,” “Registrant,” “we,” “us,” “our,” “AB International,” or “ABQQ” refer to AB International Group Corp., a Nevada corporation, and its wholly owned subsidiaries.
Results of Operations
Revenues
Our total revenue reported for the years ended August 31, 2025 and 2024 was $6,368,563 and $3,300,467, respectively.
The revenue for the year ended August 31, 2025, was mainly attributable to the license fee received in connection with the licensing of our NFT MMM platform, broadcasting and download, movie copyrights sales to the related and third parties, fees charged for embedded marketing service, advertising services as well as the revenue generated from movie tickets and food and beverage sales from our operated movie theatre, consulting service fees, in connection with the AI-based solutions and project oversight services that improve short drama market accuracy, personalization, and advertising monetization. On the other hand, the revenue for the year ended August 31, 2024, was mainly attributable to the license fee received in connection with the licensing of our NFT MMM platform, movie copyrights sales to two third parties and one related party, fees charged for embedded marketing service, consulting service fees in connection with the sales of the software-in-progress and restructuring of a company as well as the revenue generated from movie tickets and food and beverage sales from our operated movie theatre. The increase in revenue was mainly due to the combined impact of: (i) the increase in sales of copyrights and broadcast rights and embedded marketing service during the year ended August 31, 2025 as compared to the year ended August 31, 2024; and (ii) the increase in type of services provided to the licensing for broadcasting and download during the year ended August 31, 2025.
Operation of our movie theatre started in October of 2022. For the year ended August 31, 2025, we generated total revenue of $ 291,060, including $187,620 from ticket sales, $78,512 from food and beverage sales, and $24,928 from the advertisements compared with revenue of $432,012, including $276,428 from ticket sales, $128,512 from food and beverage sales, and $27,072 from the advertisements for the year ended August 31, 2024. The decrease in revenue was mainly due to less renowned and popular movies on screen compared to the corresponding period in 2024.
We anticipate an increase in revenue in the future by selling movie and TV drama copyrights and broadcast rights, providing embedded marketing services, license for broadcasting and download generating movie tickets and related revenues from our Mt. Kisco movie theatre in New York.
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Operating Costs and Expenses
Operating costs and expenses were $4,487,513 for the year ended August 31, 2025, as compared to $2,813,563 for the year ended August 31, 2024. Our operating costs and expenses for the year ended August 31, 2025 consisted of theatre operating costs of $155,097, amortization expenses of $1,557,653, costs of copyrights sold of $1,644,893, general and administrative expenses of $630,870 and related party salary and wages of $499,000. In contrast, our operating costs and expenses for the year ended August 31, 2024 consisted of theatre operating costs of $189,500, amortization expenses of $1,660,459, costs of copyrights sold of $119,517, general and administrative expenses of $829,038 and related party salary and wages of $15,049.
We experienced a decrease in theatre operating costs in fiscal 2025 as compared to fiscal 2024, mainly due to the decrease in admission revenues and the decrease in movie exhibition costs as a percentage of admission revenue.
We experienced a decrease in amortization expenses in fiscal 2025 as compared to fiscal 2024, mainly due to the having more fully amortized intangible assets for the year ended August 31, 2025.
The costs of copyrights sold for the fiscal 2025 represented the remaining costs of the 12 globally exclusive offline copyrights, with the exception of mainland China and 7 Mainland China exclusive broadcast rights when they were sold. The costs of copyrights sold for the fiscal 2024 represented the remaining costs of the 2 mainland China copyrights when they were sold.
We experienced a decrease in general and administrative expenses in fiscal 2025 as compared to fiscal 2024, mainly as a result of decreased professional fees, travel expenses, lease expenses, and cleaning expenses for the year ended August 31, 2025 in contrast to the year ended August 31, 2024.
We experienced an increase in related party salary and wages in fiscal 2025 as compared to fiscal 2024, mainly due to the one-off compensation of $99,000 and bonus compensation of $400,000 paid by shares to the Chief Executive Officer. During the year ended August 31, 2025, the Company incurred total compensation of $499,000 for the Chief Executive Officer. During the year ended August 31, 2024, the Company incurred total compensation of $15,049 for the Chief Executive Officer.
We anticipate our operating expenses will increase as we undertake our plan of operations, including the streamline of costs associated with marketing, personnel, and other general and administrative expenses, along with increased professional fees associated with SEC. These costs may increase our operational costs in fiscal 2025 at various levels of operation.
Other Expense/ Other Income
We had other expense of $425,602 for the year ended August 31, 2025, as compared with other income of $55,427 for the year ended August 31, 2024. Our other expense for fiscal 2025 was the net amount of the other income, the interest expense – related parties and the loss on change in fair value of warrant liabilities. Our other income for fiscal 2024 was the net amount of the other income generated from the sales of software in progress, bank interest income, and the interest expense – related party.
Net Income
We incurred a net income of $1,455,448 for the year ended August 31, 2025, as compared with a net income of $542,331 for the year ended August 31, 2024.
Liquidity and Capital Resources
As of August 31, 2025, we had $241,607 in current assets consisting of cash, prepaid expenses and accounts receivable. Our total current liabilities as of August 31, 2025 were $3,491,633. As a result, we have a working capital deficit of $3,250,026 as of August 31, 2025 as compared with a working capital of $160,617 as of August 31, 2024.
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Operating activities used $2,318,961 in cash for the year ended August 31, 2025, as compared with $162,319 generated in cash for the year ended August 31, 2024.
Our negative operating cash flow for the year ended August 31, 2025 was mainly the result of the cash used in the purchase of movie and TV series broadcast right and copyright and purchase deposit offset by net income combined with the amortization of intangible assets, sales of copyrights and decrease in accounts receivable.
Our positive operating cash flow for the year ended August 31, 2024 was mainly the result of net income combined with amortization of intangible assets, proceeds from the sales of copyrights, deferred revenue, offset by the gain from sales of software in process purchase of movie and TV series broadcast right and copyright, increase in accounts receivable, purchase deposits and decrease in accounts payable and accrued liabilities.
Investing activities was $Nil for the years ended August 31, 2025 and 2024.
Financing activities provided $2,268,222 for the year ended August 31, 2025, as compared with $ 214,985 used by financing activities for the year ended August 31, 2024. Our positive financing cash flow for the years ended August 31, 2025 was due to the proceeds from share issuance and the net proceeds from related party loans. Our negative financing cash flow for the years ended August 31, 2024 was due to the settlement of loans due to related party and the repurchase of common shares.
Going Concern
Our consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of August 31, 2025, the Company had limited cash, an accumulated deficit of approximately $10.4 million and a working capital deficit of approximately $3.3 million. For the year ended August 31, 2025, the Company had negative cash flow of approximately $2.3 million from its operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders or external financing and achieving operating profits. These factors, among others, raise the substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.
The future operations of the Company depend on its ability to realize forecasted revenues, achieve profitable operations, and depend on whether or not the Company could obtain continued financial support from its stockholders or external financing. Management believes the existing stockholders will continue to provide additional cash to meet the Company’s obligations as they become due. The Company also intends to fund operations through cash flow generated from the operations, including the expected copyrights sales and other revenue streams, equity financing, debt borrowings, and additional equity financing from outside investors, to ensure sufficient working capital. However, no assurance can be given that additional financing, if required, would be available on favorable terms or at all. If we are not able to secure additional funding, the implementation of our business plan will be impaired.
Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
Off Balance Sheet Arrangements
As of August 31, 2025, there were no off-balance sheet arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
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Revenue Recognition
The Company adopted ASC Topic 606, “Revenue from Contracts with Customers”, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company derives its revenues primarily from the following sources:
Revenue from selling copyrights of movies or television series:
Revenue from the sale of copyrights for movies or television series is recognized at a point in time when control of the intellectual property transfers to the customer. Control is considered transferred upon delivery of the master copy and completion of all requisite authorization procedures, as this is the point at which the customer has the legal right to direct the use of, and obtain substantially all of the remaining benefits from the copyright. Contracts are generally fixed-price arrangements without cancellation or refund provisions.
Revenue from licensing NFT MMM platform:
Revenue from NFT MMM platform licensing is recognized over time on a straight-line basis over the contractual license term, typically one or two years. The Company determined that the license provides customers the access to the platform and its data through both mobile and web interfaces for the license period, as the customer simultaneously receives and consumes the benefits provided by the Company's performance. The arrangements are non-cancelable and non-refundable with fixed consideration.
Revenue from movie theater admissions and food and beverage sales:
Revenue from movie theater admissions is recognized at a point in time when the movie is exhibited to customers, as this is when the performance obligation is satisfied. Food and beverage revenue is recognized at a point in time when customers take possession of the items. Revenue from gift card and exchange ticket sales is deferred until redemption occurs or upon estimation of breakage income for gift cards with a remote likelihood of redemption.
Revenue from embedded marketing service:
The Company earns revenue from embedded marketing services by incorporating advertisements into movies, television series or short-form drama series. Revenue is recognized at a point in time when the advertisement has been integrated into the media content and customer approval, as the customer can then direct the use of and obtain substantially all future economic benefits from the customized media content.
Revenue from consulting services:
The Company derives revenue from providing consulting services related to software development, corporate restructuring and strategic advisory. The Company also provides AI-based solutions and project oversight services that enhance content market accuracy, personalization, and advertising monetization for short drama platforms. Revenue from consulting services is recognized over time as the related services are performed, consistent with the continuous transfer of benefits to the customer.
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Revenue from advertising services in theaters
The Company generates advertising revenue from displaying commercials on theater screens prior to movie exhibitions. Revenue is recognized at a point in time when the advertisement is exhibited on screen to the audience.
Revenue from broadcast and download licensing
The Company grants non-exclusive, time-based licenses that allow customers to broadcast or provide download service of its films and television series, primarily short-form drama series, on their web or cloud-based platforms. License fees are charged per movie or per drama series based on the authorized period, typically on a monthly basis, and are not linked to user activity or download volume. The customer obtains a right to access the content during the license term. The Company satisfies its performance obligation by making the licensed content available to the customer and maintaining that accessibility throughout the license term. Accordingly, revenue is recognized over time on a straight-line basis throughout the license period.
Contract Assets and Liabilities
Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs.
Disaggregation of revenue
The Company disaggregates its revenue from contracts by revenue streams, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating the impact of this standard on its financial statement disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 clarifies the guidance to determine the accounting acquirer in a business combination that is effected primarily by exchanging equity interests, when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. ASU 2025-03 requires entities to consider the same factors in ASC 805, Business Combinations, required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied on a prospective basis to any acquisition transaction that occurs after the initial application date. The Company does not expect a material effect on its consolidated financial statements upon adoption.
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In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). ASU 2025-04 revises the definition of the term performance condition for share-based consideration payable to a customer to incorporate conditions that are based on the volume or monetary amount of a customer’s purchases or potential purchases. ASU 2025-04 also eliminates the policy election to account for forfeitures as they occur for awards with service conditions. ASU 2025-04 also clarifies that ASC 606 variable consideration guidance does not apply to share-based payments to customers; instead, vesting probability should be assessed solely under ASC 718, Compensation—Stock Compensation. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-04 may be applied on either a modified retrospective basis or on a retrospective basis. The Company is currently assessing the impact this standard will have on the Company’s Consolidated Financial Statements.
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company does not expect a material effect on its consolidated financial statements upon adoption.
In August 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, Intangibles - Goodwill and Other (Topic 350) — Internal-Use Software (Subtopic 350-40): Targeted Improvements. This update provides clarifications and targeted improvements to the accounting for internal-use software, including enhanced guidance on the identification of software development activities, capitalization of implementation costs, and accounting for subsequent upgrades and maintenance. ASU 2025-06 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect a material effect on its consolidated financial statements upon adoption.
Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have a material impact on the balance sheets, statements of operations and comprehensive income and cash flows.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
| F-1 | Report of Independent Registered Public Accounting Firm; |
| F-2 | Consolidated Balance Sheets as of August 31, 2025 and 2024; |
| F-3 | Consolidated Statements of Operations for the years ended August 31, 2025 and 2024; |
| F-4 | Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, 2025 and 2024; |
| F-5 | Consolidated Statements of Cash Flows for the years ended August 31, 2025 and 2024; and |
F-6 - F-28 |
Notes to Consolidated Financial Statements. |
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
AB International Group Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of AB International Group Corp. (the “Company”) as of August 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for years ended August 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended August 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements, as of August 31, 2025, the Company had limited cash, an accumulated deficit of approximately $10.4 million and a working capital deficit of approximately $3.3 million. For the year ended August 31, 2025, the Company had negative cash flow of approximately $2.3 million from its operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders or external financing and achieving operating profits. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that there are no critical audit matters for current period.
/s/
We have served as the Company’s auditor since 2022.
December 1, 2025
PCAOB ID Number
| F-1 |
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AB INTERNATIONAL GROUP CORP.
Consolidated Balance Sheets
| August 31, | August 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | — | |||||||
| Accounts receivable | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use operating lease assets, net | ||||||||
| Intangible assets, net | ||||||||
| Purchase deposits for intangible assets, non-current | ||||||||
| Security deposit | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Loan from related parties | ||||||||
| Current portion of obligations under operating leases | ||||||||
| Warrants Liability | — | |||||||
| Deferred revenue | — | |||||||
| Total Current Liabilities | ||||||||
| Obligations under operating leases, non-current | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $ | ||||||||
| Series A preferred stock, | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-2 |
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AB INTERNATIONAL GROUP CORP.
Consolidated Statements of Operations
| Years ended | ||||||||
| August 31, | ||||||||
| 2025 | 2024 | |||||||
| REVENUE | ||||||||
| Copyrights sales | $ | $ | ||||||
| Copyrights sales – related party | ||||||||
| Service revenue | ||||||||
| Service revenue – related party | — | |||||||
| Theater revenue | ||||||||
| Total revenue | ||||||||
| OPERATING COSTS AND EXPENSES | ||||||||
| Costs of copyrights sold | ( | ) | ( | ) | ||||
| Amortization expenses | ( | ) | ( | ) | ||||
| Theatre operating costs | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Related party salary and wages | ( | ) | ( | ) | ||||
| Total Operating Costs And Expenses | ( | ) | ( | ) | ||||
| Income From Operations | ||||||||
| OTHER (EXPENSES) INCOME | ||||||||
| Interest income | — | |||||||
| Interest expense – related parties | ( | ) | ( | ) | ||||
| Loss on change in fair value of warrant liabilities | ( | ) | — | |||||
| Other income | ||||||||
| Total Other (Expenses) Income | ( | ) | ||||||
| Income Before Income Tax Benefit | ||||||||
| Income tax | — | — | ||||||
| NET INCOME | $ | $ | ||||||
| NET INCOME PER SHARE: BASIC | $ | $ | ||||||
| NET INCOME PER SHARE: DILUTED | $ | $ | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: DILUTED | ||||||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
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AB INTERNATIONAL GROUP CORP.
Consolidated Statements of Changes in Stockholders' Equity
| Common Stock | Preferred Stock | |||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total Equity | ||||||||||||||||||||||
| Balance – August 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance of restricted common shares | — | — | ( | ) | — | |||||||||||||||||||||||
| Preferred shares series C converted into common shares | ( | ) | ( | ) | ( | ) | — | — | ||||||||||||||||||||
| Preferred shares series B cancellation | — | — | ( | ) | ( | ) | — | — | ||||||||||||||||||||
| Common shares cancellation | ( | ) | ( | ) | — | — | — | — | ||||||||||||||||||||
| Repurchase of Common shares | ( | ) | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||
| Imputed Interest | — | — | — | — | — | |||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||
| Balance – August 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance of Common shares for cash | — | — | ( | ) | — | |||||||||||||||||||||||
| Issuance of Common shares for officer bonus | — | — | ( | ) | — | |||||||||||||||||||||||
| Reclassification of warrants | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
| Imputed Interest | — | — | — | — | — | |||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||
| Balance – August 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-4 |
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AB INTERNATIONAL GROUP CORP.
Consolidated Statements of Cash Flows
| Years Ended | ||||||||
| August 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Executive salaries paid in stock | — | |||||||
| Depreciation of fixed asset | ||||||||
| Amortization of intangible asset | ||||||||
| Loss on change in fair value of warrant liabilities | — | |||||||
| Gain from sales of software in progress | — | ( | ) | |||||
| Imputed interest on loan from related parties | ||||||||
| Non-cash lease expense | ( | ) | ( | ) | ||||
| Costs of copyrights sold | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | — | |||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from (repayment to) related party loan | ( | ) | ||||||
| Proceeds from common stock issuances | — | |||||||
| Repurchase of common shares | — | ( | ) | |||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents – beginning of year | ||||||||
| Cash and cash equivalents – end of year | $ | $ | ||||||
| Supplemental Cash Flow Disclosures | ||||||||
| Cash paid for interest | $ | — | $ | — | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Settlement of accrued CEO salaries with common stock | $ | — | $ | |||||
| Net off purchase deposit with loan from related parties for sales of software | $ | — | $ | |||||
| Unpaid repurchase of common shares | $ | — | $ | |||||
| Expenses settled by CEO on behalf of the Company | $ | — | $ | |||||
The accompanying notes are an integral part of these consolidated financial statements.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BUSINESS AND BASIS OF PRESENTATION
Business
AB International Group Corp. (the “Company”) was incorporated under the laws of the State of Nevada on July 29, 2013. The Company is an intellectual property (IP) investment and licensing company.
On May 5, 2022, the Company incorporated AB Cinemas NY, Inc. in New York, NY, for the purpose of operating Mt. Kisco Theatre located in Mount Kisco, NY. The theatre started operations in October 2022.
On March 13, 2025, the Company incorporated AI+ Hubs Corp, a new wholly owned subsidiary pursuant to the Delaware General Corporation law. Through the subsidiary, the Company primarily engages in the acquisition, distribution, and licensing of copyrights for movies, television series, and short-form drama series.
On January 27, 2025, the Company sold its proprietary broadcasting platform, ABQQ.tv. Subsequently, in March 2025, the Company entered into an arrangement with a third-party platform to broadcast its movies and television series copyrights.
The Company continues to generate revenue primarily from the sale, and licensing (including broadcast and download licensing) of movies and television series, including short-form drama series. Other sources of revenue include the licensing of its NFT MMM platform, movie theater admissions, advertising and related food and beverage sales, embedded marketing services, and consulting services.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The financial statements have been prepared on a consolidated basis, with the Company’s wholly owned subsidiaries, App Board Limited, AB Cinemas NY, Inc and AI+ Hubs Corp. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounts receivable
Accounts receivable is presented at invoiced amount
net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company
reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including
the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends. Accounts are written
off after efforts at collection prove unsuccessful.
Foreign Currency Transactions
The financial risk arises from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Gains and losses from translation of foreign currency into U.S. dollars are included in current results of operations.
Purchase Deposits
Purchase deposits primarily consist of payments made to acquire the copyrights and distribution rights of movies, Television series, short-form drama series and intellectual property of ufilm, etc. Purchase deposits are classified as either current or non-current based on the nature and the terms of the respective agreements. These purchase deposits are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The allowance is also based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment. Purchase deposits are written off against the allowances only after exhaustive collection efforts. No allowance was recorded for the year ended August 31, 2025 and 2024, respectively.
Property and Equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvement is related to the enhancements paid by the Company to leased offices. Leasehold improvement represents capital expenditures for direct costs of renovation or acquisition and design fees incurred. The amortization of leasehold improvements commences once the renovation is completed and ready for the Company’s intended use.
The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:
| Estimated Useful Life | |||
| Furniture | |||
| Appliances | |||
| Leasehold improvement | Lesser of useful life and lease term |
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments that substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations in other income or expenses.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Intangible Assets
Intangible assets are recorded at the lower of cost or estimated fair value and amortized as follows:
| • | Copyrights and broadcast rights: | |
| • | NFT MMM platform: |
Amortized costs of the intangible asset are recorded as amortization expenses in the consolidated statements of operations.
Lease property under operating lease
The Company adopted ASU No. 2016-02—Leases (Topic 842) since June 1, 2019, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated balance sheets. The standard did not materially impact the Company’s consolidated net earnings and cash flows.
Impairment of Long-lived asset
The Company evaluates
its long-lived assets or asset group, including intangible assets with indefinite and finite lives, for impairment. Intangible assets
with indefinite lives that are not subject to amortization are tested for impairment at least annually or more frequently if events or
changes in circumstances indicate that the assets might be impaired in accordance with ASC 350. Such impairment test compares the fair
values of assets with their carrying values with an impairment loss recognized when the carrying values exceed fair values. For long-lived
assets and intangible assets with finite lives that are subject to depreciation and amortization are tested for impairment whenever events
or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets)
indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company
evaluates impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the
use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount
of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair
value. Impairment losses are included in the general and administrative expense. There was
Revenue Recognition
The Company adopted ASC Topic 606, “Revenue from Contracts with Customers”, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition (continued)
To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company derives its revenues primarily from the following sources:
Revenue from selling copyrights of movies or television series:
Revenue from the sale of copyrights for movies or television series is recognized at a point in time when control of the intellectual property transfers to the customer. Control is considered transferred upon delivery of the master copy and completion of all requisite authorization procedures, as this is the point at which the customer has the legal right to direct the use of, and obtain substantially all of the remaining benefits from the copyright. Contracts are generally fixed-price arrangements without cancellation or refund provisions.
Revenue from licensing NFT MMM platform:
Revenue from NFT MMM platform licensing is recognized over time on a straight-line basis over the contractual license term, typically one or two years. The Company determined that the license provides customers the access to the platform and its data through both mobile and web interfaces for the license period, as the customer simultaneously receives and consumes the benefits provided by the Company's performance. The arrangements are non-cancelable and non-refundable with fixed consideration.
Revenue from movie theater admissions and food and beverage sales:
Revenue from movie theater admissions is recognized at a point in time when the movie is exhibited to customers, as this is when the performance obligation is satisfied. Food and beverage revenue is recognized at a point in time when customers take possession of the items. Revenue from gift card and exchange ticket sales is deferred until redemption occurs or upon estimation of breakage income for gift cards with a remote likelihood of redemption.
Revenue from embedded marketing service:
The Company earns revenue from embedded marketing services by incorporating advertisements into movies, television series or short-form drama series. Revenue is recognized at a point in time when the advertisement has been integrated into the media content and customer approval, as the customer can then direct the use of and obtain substantially all future economic benefits from the customized media content.
Revenue from consulting services:
The Company derives revenue from providing consulting services related to software development, corporate restructuring and strategic advisory. The Company also provides AI-based solutions and project oversight services that enhance content market accuracy, personalization, and advertising monetization for short drama platforms. Revenue from consulting services is recognized over time as the related services are performed, consistent with the continuous transfer of benefits to the customer.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition (continued)
Revenue from advertising services in theaters
The Company generates advertising revenue from displaying commercials on theater screens prior to movie exhibitions. Revenue is recognized at a point in time when the advertisement is exhibited on screen to the audience.
Revenue from broadcast and download licensing
The Company grants non-exclusive, time-based licenses that allow customers to broadcast or provide download service of its films and television series, primarily short-form drama series, on their web or cloud-based platforms. License fees are charged per movie or per drama series based on the authorized period, typically on a monthly basis, and are not linked to user activity or download volume. The customer obtains a right to access the content during the license term. The Company satisfies its performance obligation by making the licensed content available to the customer and maintaining that accessibility throughout the license term. Accordingly, revenue is recognized over time on a straight-line basis throughout the license period.
Contract Assets and Liabilities
Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs.
As of August 31, 2025 and 2024, other than accounts
receivable, the Company had
Disaggregation of revenue
The Company disaggregates its revenue from contracts by revenue streams, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors.
The following table presents sales by revenue streams for the years ended August 31, 2025 and 2024, respectively:
| August 31, 2025 | August 31, 2024 | |||||||
| Theater admissions | $ | $ | ||||||
| Food and beverage sales | ||||||||
| Theater advertisement | ||||||||
| Theater revenue | ||||||||
| Licensing for broadcast and download | — | |||||||
| Licensing for NFT platform | ||||||||
| Embedded marketing service | ||||||||
| Consulting services | ||||||||
| Service revenue | ||||||||
| Copyrights sales | ||||||||
| Total revenue | $ | $ | ||||||
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” (ASC 820) and ASC 825, “Financial Instruments” (ASC 825), requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 – Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 – Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 – Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
The carrying values of cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short-term nature.
Basic and Diluted Earnings (Loss) Per Share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. No warrants were included in the diluted income per share as they would be anti-dilutive. Preferred stocks were included in the diluted earnings per share as they would be dilutive.
| August 31, 2025 | August 31, 2024 | |||||||
| Net Income | $ | $ | ||||||
| Weighted Average Number of Shares Outstanding: Basic | ||||||||
| Basic EPS | ||||||||
| Net Income | $ | $ | ||||||
| Weighted Average Number of Shares Outstanding: Basic | ||||||||
| Add: Preferred shares A | ||||||||
| Weighted Average Number of Shares Outstanding: Diluted | ||||||||
| Diluted EPS | ||||||||
| F-11 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Reclassification
Certain prior period amounts of revenue in consolidated statements of operations and purchase of intangible assets in consolidated statements of cash flows have been reclassified to conform to the current period presentation.
Warrants
Warrants are classified as equity and the proceeds from issuing warrants in conjunction with convertible notes are allocated based on the relative fair values of the base instrument of convertible notes and the warrants by following the guidance of ASC 470-20-25-2.
Proceeds from the sale of a debt instrument with stock purchase warrants (detachable call options) shall be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. This usually results in a discount (or, occasionally, a reduced premium), which shall be accounted for as interest expense under Topic 835 Interest.
Income Taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. Deferred income taxes assets and liabilities are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of operations in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Share-Based Compensation
The Company follows the provisions of ASC 718, “Compensation - Stock Compensation,” which establishes the accounting for employee share-based awards. For employee share-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award.
Segment reporting
The Company follows ASU No. 2023-07, “Segment Reporting (Topic 280)”, which improves the disclosures about a public entity’s reportable segments and address requests from investors for more detailed information about a reportable segment’s expenses.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating the impact of this standard on its financial statement disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 clarifies the guidance to determine the accounting acquirer in a business combination that is effected primarily by exchanging equity interests, when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. ASU 2025-03 requires entities to consider the same factors in ASC 805, Business Combinations, required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied on a prospective basis to any acquisition transaction that occurs after the initial application date. The Company does not expect a material effect on its consolidated financial statements upon adoption.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). ASU 2025-04 revises the definition of the term performance condition for share-based consideration payable to a customer to incorporate conditions that are based on the volume or monetary amount of a customer’s purchases or potential purchases. ASU 2025-04 also eliminates the policy election to account for forfeitures as they occur for awards with service conditions. ASU 2025-04 also clarifies that ASC 606 variable consideration guidance does not apply to share-based payments to customers; instead, vesting probability should be assessed solely under ASC 718, Compensation—Stock Compensation. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-04 may be applied on either a modified retrospective basis or on a retrospective basis. The Company is currently assessing the impact this standard will have on the Company’s Consolidated Financial Statements.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements (continued)
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company does not expect a material effect on its consolidated financial statements upon adoption.
In August 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, Intangibles - Goodwill and Other (Topic 350) — Internal-Use Software (Subtopic 350-40): Targeted Improvements. This update provides clarifications and targeted improvements to the accounting for internal-use software, including enhanced guidance on the identification of software development activities, capitalization of implementation costs, and accounting for subsequent upgrades and maintenance. ASU 2025-06 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect a material effect on its consolidated financial statements upon adoption.
Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have a material impact on the balance sheets, statements of operations and comprehensive income and cash flows.
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of August 31,
2025, the Company had limited cash, an accumulated deficit of approximately $
The future operations of the Company depend on its ability to realize forecasted revenues, achieve profitable operations, and depend on whether or not the Company could obtain continued financial support from its stockholders or external financing. Management believes the existing stockholders will continue to provide additional cash to meet the Company’s obligations as they become due. The Company also intends to fund operations through cash flow generated from the operations, including the expected copyrights sales and other revenue streams, equity financing, debt borrowings, and additional equity financing from outside investors, to ensure sufficient working capital. However, no assurance can be given that additional financing, if required, would be available on favorable terms or at all. If we are not able to secure additional funding, the implementation of our business plan will be impaired.
Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provide the opportunity for the Company to continue as a going concern.
NOTE 4 – PROPERTY AND EQUIPMENT
The Company capitalized the renovation cost as leasehold improvement and the cost of furniture and appliances as fixed asset. Leasehold improvement relates to renovation and upgrade of the leased office.
The depreciation expense
was $
As of August 31, 2025 and 2024, the balance of property and equipment was as follows:
| August 31, 2025 | August 31, 2024 | |||||||
| Leasehold improvement | $ | $ | ||||||
| Appliances and furniture | ||||||||
| Total cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INTANGIBLE ASSETS
As of August 31, 2025 and 2024, the balance of intangible assets was as follows:
| August 31, 2025 | August 31, 2024 | |||||||
| Movie copyrights and broadcast right | $ | $ | ||||||
| Television series | ||||||||
| Short form drama series | — | |||||||
| NFT MMM platform | ||||||||
| Total cost | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
The amortization expense
for the years ended August 31, 2025 and 2024 was $
| Twelve months ending August 31, | Amortization expense | ||||
| 2026 | $ | ||||
| 2027 | |||||
| Total | $ | ||||
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INTANGIBLE ASSETS (continued)
On August 6, 2022, the Company licensed its NFT MMM
platform to a third party, Anyone Pictures Limited, granting access to the platform and related data through both the mobile application
and website for one year beginning August 20, 2022, at a monthly license fee of $
During the year ended August 31, 2024, the Company
entered into several copyright acquisition agreements with All In One Media Ltd. On September 10, 2023, the Company acquired the copyrights
for four movies for a total purchase price of $
During the year ended August 31, 2024, in November
2023, the Company entered into an agreement with Anyone Pictures Limited to sell the Mainland China copyrights of one movie for $
During the year ended August 31, 2024, on November
21, 2023, the Company entered into an agreement with Capitalive Holdings Limited to sell the offline broadcast rights of one movie for
$
During the year ended August 31, 2024, on July
27, 2024, the Company has entered into an agreement with Anyone Pictures Limited to sell the mainland China copyrights of 3 movies for $
On August 5, 2024, the Company has entered into
an agreement with Zestv Studios Limited to sell its offline broadcast rights of one movie for $
During the year ended August 31, 2024, the total
sale amount of intangible assets was $
During the year ended August 31, 2025, on September
30, 2024, the Company entered into an agreement with Capitalive Holdings Limited to sell the offline broadcast rights of two movies for
$
During the year ended August 31, 2025, on September
30, 2024, the Company entered into an agreement with All In One Media Ltd. to acquire the copyrights and broadcast rights for one movie
for a total purchase price of $
During the year ended August 31, 2025, the Company
received the copyright and broadcast right for three movies from All In One Media Ltd for $
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INTANGIBLE ASSETS (continued)
During the year ended August 31, 2025, the Company
also received the copyright and broadcast right of 20-episode TV drama and 10-episode TV drama from Stareastnet Portal Limited for $
During the year ended August 31, 2025, the Company
entered into an agreement with Capitalive Holdings Limited to sell the ABQQ.TV website and the copyrights of 59 movies for $
During the year ended August 31, 2025, the Company
entered into an agreement with Anyone Pictures Limited, a related party, to sell the broadcast rights of four movies for $
During the year ended August 31, 2025, the Company
acquired from All In One Media Ltd. the copyrights and broadcast rights for one movie and 1,151 series and 195 series and 751 series
of TV drama, for a price of $
During the year ended August 31, 2025, the Company
also acquired from Guangdong Huanshi Film Industry Co., Ltd. the copyrights and broadcast rights of 20 series, 360 series and 100 series
of TV drama, for a price of $
During the year ended August 31, 2025, the Company
entered into an agreement with Capitalive Holdings Limited to sell the offline broadcast rights of five movies for $
During the year ended August 31, 2025, the Company
entered into an agreement with Anyone Pictures Limited, a related party, to sell the broadcast rights of one movie for $
During the year ended August 31, 2025, the Company
entered into an agreement with Capitalive Holdings Limited to grant non-exclusive, time-based licenses allowing the customer to broadcast
the Company’s films and television series, primarily short-form drama series. License fees are charged per movie or per drama series
per month. The Company received total broadcast licensing fees of $
During the year ended August 31, 2025, the Company
also licensed the download rights to Guangdong Dangliang Film Co., Ltd. to download the Company’s film through the cloud-based
platforms. The licensed rights exclude Mainland China. License fees are charged per movie based on the authorized period, typically monthly
or annually, and are not linked to user activity or download volume. The Company received total download licensing fees of $
During the year ended August 31, 2025, the total
sale amount of intangible assets was $
| F-18 |
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – LEASES
In September 2023, the Company entered into a
On October 21, 2021, the Company signed a lease agreement
to lease “the Mt. Kisco Theatre”, a movie theater, for
On January 31, 2024, the end of the initial two-year
rental period, the landlord agreed to continue to receive $
Total lease expense for the years ended August 31,
2025 and 2024 was $
The following is a schedule of maturities of lease liabilities:
| Twelve months ending August 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| Total future minimum lease payments | |||||
| Less: imputed interest | ( |
) | |||
| Total | $ | ||||
| F-19 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – PURCHASE DEPOSITS FOR INTANGIBLE ASSETS
The balance of purchase deposits for intangible assets, which relates to the acquisitions of copyrights and broadcast rights for movies, TV dramas, and software was as follows:
| August 31, 2025 | August 31, 2024 | |||||||
| Purchase deposit for copyright and broadcast right for movies and series | $ | $ | ||||||
| Purchase deposit for intellectual property of ufilm | — | |||||||
| Total purchase deposits for intangible assets | $ | $ | ||||||
On February 23, 2024, the Company
entered into an agreement to acquire the copyrights and broadcast rights of a movie and paid a purchase deposit of $
On March 27, 2025, the Company entered
into an agreement to acquire the copyrights and broadcast rights of 1,500 episodes of short form drama series. The granted broadcasting
rights are exclusive to Mainland China. As of August 31, 2025, the Company had paid purchase deposits of $
In May 2025, the Company entered
into an agreement to acquire a license to the intellectual property (“IP”) of ufilm from AIHUB Releasing, Inc. for total
consideration of $
| F-20 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – RELATED PARTY TRANSACTIONS
Related party loans and line of credit agreements
In support of the Company’s operations and cash requirements, the Company may rely on advances from stockholders until such time that it can sustain its operations or obtain adequate financing through equity sales or traditional debt financing.
Mr. Chiyuan Deng, the Chief Executive Officer
On June 1, 2023, Mr. Chiyuan Deng,
the Company’s Chief Executive Officer and a stockholder, entered into a line of credit agreement with the Company. Under the agreement,
Mr. Deng agreed to provide a line of credit of up to $
For the year ended August 31, 2025,
Mr. Deng provided additional loans totaling $
Anyone Pictures Limited
On March 1, 2025, the Company entered
into a line of credit agreement with Anyone Pictures Limited, a related party, for up to $
Share issuance – related party - Anyone Pictures Limited
On February 21, 2025, the Company
entered into a stock purchase agreement with Anyone Pictures Limited. Under the terms of the agreement, the Company issued
On May 15, 2025, the Company entered
into another stock purchase agreement with Anyone Pictures Limited. Pursuant to this agreement, the Company issued
| F-21 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – RELATED PARTY TRANSACTIONS (continued)
Revenue and accounts receivable - related party - Anyone Pictures Limited
For the year ended August 31, 2025,
the Company sold broadcast rights of six movies and two television series to Anyone Pictures Limited, a related party, for total consideration
of $
As of August 31, 2025, the Company
had
Revenue and accounts receivable - related party - Zestv Studios Limited
On August 5, 2024, the Company has entered into an
agreement with Zestv Studios Limited to license its offline broadcast rights of 1 movie for $
As of August 31, 2025
and 2024, the Company had
Accounts payable and accrued liabilities – related party - Zestv Studios Limited
On November 28, 2023, the Company sold the software-in-progress
to the Developer for $
During the year ended August 31, 2024, Zestv Studios
Limited has settled operating expenses of $
As of August 31, 2025 and 2024, the Company had $
Executives’ salaries
On September 11, 2020
and May 24, 2022, the Company entered into two amended employment agreements with Mr. Chiyuan Deng, the Chief Executive Officer. Pursuant
the amended agreements, the Company amended the compensation to Mr. Deng to include a salary of $
On February 14, 2025, the Company approved compensation
of $
For the year ended August
31, 2025, the Company incurred total compensation expense of $
NOTE 9 – STOCKHOLDERS’ EQUITY
Common shares
The Company had the following activities for the year ended August 31, 2025:
Issuance of common shares
On February 21, 2025, the Company
entered into a stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued
On March 14, 2025, the Company issued
On May 15, 2025, the Company entered
into another stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued
| F-22 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – STOCKHOLDERS’ EQUITY (continued)
Common shares (continued)
The Company had the following activities during the year ended August 31, 2024:
Issuance of restricted common shares
On October 5, 2023, the Board of Directors
resolved to issue
Conversion of Series C preferred shares to common shares
During the year ended August 31, 2024,
the Company issued total
Reverse Stock split
Cancellation of Common shares
On February 5, 2024, the Board of
Directors authorized the cancellation of
Repurchase of common shares
On July 20, 2024, the Board of Directors
approved the repurchase of
| F-23 |
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AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – STOCKHOLDERS’ EQUITY (continued)
Subscription of Common shares
On June 13, 2024, the Company entered
into a Common Stock Purchase Agreement with Alumni Capital LP (“Alumni Capital”), a Delaware limited partnership. Pursuant
to the Purchase Agreement, the Company has the right, but not the obligation to cause Alumni Capital to purchase up to $
The Purchase Agreement provides that
The Purchase Agreement contains certain representations, warranties, covenants and events of default. The Closing occurred following the satisfaction of customary closing conditions.
As of June 30,2025, the agreement was expired and Alumni Capital LP did not purchase any shares.
As of August 31, 2025 and 2024,
the Company had
Preferred shares
The Company had no preferred share activities during the year ended August 31, 2025.
The Company had the following preferred share activities during the year ended August 31, 2024:
During the year ended August 31, 2024,
the Company converted a total
On November 30, 2023, the Board of Directors approved the withdrawal of the Amended Certificate of Designation for the Company’s Series C and Series D Preferred Stock. On December 1, 2023, the Board of Directors approved the withdrawal of the Certificate of Designation for the Company’s Series B Preferred Stock. The Series B Preferred Stock was subsequently cancelled during the year ended August 31, 2024.
As of August 31, 2025
and 2024, the Company had
| F-24 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – STOCKHOLDERS’ EQUITY (Continued)
Warrants
2022 warrants
As a consideration of
Common Stock Purchase Agreement signed with Alumni Capital on August 2, 2022, which resulted in Alumni Capital subscribing to a total
of
2024 warrants
In connection with the
Common Stock Purchase Agreement signed with Alumni Capital on June 13, 2024, the Company issued to Alumni a Common Stock Purchase Warrant
dated the same day to purchase up to
The aggregate fair value
of the warrants was estimated at $
Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to its own shares. The warrants were recorded at their fair value on the date of grant as a component of shareholders’ equity.
As of
August 31, 2025, the Company was authorized to issue
Upon
reclassification, the warrants were measured at fair value, resulting in a warrant liability of $
The aggregate fair
value of the warrants was estimated at $
Following reclassification, the warrant liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with ASC 815-40.
As of August 31, 2025,
A summary of the status of the Company’s warrants as of August 31, 2025 and 2024 is presented below:
| Number of warrants | ||||||||
| Original shares issued | Anti-dilution Adjusted | |||||||
| Warrants as of August 31, 2023 | — | |||||||
| Warrants granted during the year | — | |||||||
| Warrants as of August 31, 2024 | — | |||||||
| Adjustment | — | |||||||
| Exercisable as of August 31, 2025 | — | |||||||
| F-25 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – INCOME TAXES
The Company and its fully owned subsidiaries,
AB Cinemas NY, Inc and AI+ Hubs Corp, were incorporated in the United States and are subject to a statutory income tax rate at
As of August 31, 2025 and 2024, the components of net deferred tax assets, including a valuation allowance, were as follows:
| August 31, 2025 | August 31, 2024 | |||||||
| Deferred tax asset attributable to: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | — | $ | — | ||||
For the years ended August 31, 2025 and 2024, the Company and its subsidiaries generated net income. However, despite the current profitability, management believes that the Company’s earnings are not yet stable or sustainable. The Company also continues to experience negative working capital and has an accumulated deficit.
In assessing the realizability of deferred tax assets, management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which the related temporary differences become deductible. In making this assessment, management considers the scheduled reversal of deferred tax items, projected future taxable income, and feasible tax planning strategies.
As a result, management
determined that it is more likely than not that the Company’s deferred tax assets will not be realized, even after considering the
potential utilization of existing net operating loss (“NOL”) carryforwards. As of August 31, 2025 and August 31, 2024, the
valuation allowance for deferred tax assets was $
Reconciliation between the statutory rate and the effective tax rate is as follows for the years ended August 31, 2025 and 2024:
| Year ended | ||||||||
| August 31, | ||||||||
| 2025 | 2024 | |||||||
| Federal statutory tax rate | ||||||||
| Change in valuation allowance | ( | ) | ( | ) | ||||
| Effective tax rate | ||||||||
For the year ended August 31, 2025 and 2024, the Company and its subsidiaries generated net income. However, due to the fact that the Company had net operating loss carry forwarded, the Company and its subsidiaries did not incur any income tax for the year ended August 31, 2025 and August 31, 2024.
| F-26 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – CONCENTRATION RISK
Concentration
For the year ended August
31, 2025,
As of August 31, 2025,
For the year ended August 31,
2025,
Credit risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist primarily of cash deposits. In the United States, deposits at each financial
institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. There is no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of its operations and there are no proceedings in which any of the Company’s directors, officers, or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to the Company’s interest.
Operating leases
The Company has a lease agreement to rent movie theatre with a third-party vendor as of August 31, 2025. (See Note 6)
| F-27 |
| Table of Contents |
AB INTERNATIONAL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – SEGMENT INFORMATION
The Company follows FASB ASC Topic 280, Segment Reporting, as amended by ASU 2023-07. The Company’s Chief Operating Decision Maker (“CODM”), Mr. Deng, the Chief Executive Officer, is responsible for evaluating operating results and allocating resources among the Company’s operating segments. As a result of strategic business realignment, the Company has identified two reportable segments: the Copyrights and Licensing (“IP”) segment and the Cinema segment.
The following table presents summarized financial information by reportable segment for the years ended August 31, 2025 and 2024, respectively.
| NOTE 13 - SEGMENT INFORMATION - Summary of Information by Segment | ||||||||||||||||||||||||
| IP Segment | Cinema Segment | Total | ||||||||||||||||||||||
| Year ended | Year ended | Year ended | ||||||||||||||||||||||
| August 31 | August 31 | August 31 | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of copyrights sold | — | — | ||||||||||||||||||||||
| Operating costs | — | — | ||||||||||||||||||||||
| Depreciation and Amortization | — | — | ||||||||||||||||||||||
| Interest expense | — | — | ||||||||||||||||||||||
| Segment assets | ||||||||||||||||||||||||
| Segment income (loss) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||
NOTE 14 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to the date these financial statements were issued.
On October 1, 2025, the Company entered into three consulting agreements with independent third-party consultants to provide business development services. Under the terms of the agreements, each of the consultants are entitled to receive an aggregate of 160,000,000 shares of the Company’s restricted common stock as compensation for services.
Upon execution of the agreements, the Company issued 30,000,000 restricted common shares to each of the consultants, totaling 90,000,000, which were delivered to the Company’s transfer agent in the consultants’ names and accounts.
Beginning in the fourth month following the agreement date, and continuing through the sixteenth month, for each of the consultant, the Company is required to issue 10,000,000 restricted common shares per month, to be delivered to the transfer agent in the Company’s name and account for subsequent release pursuant to the service schedule under the agreements.
| F-28 |
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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being August 31, 2025. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of August 31, 2025 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of August 31, 2025, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending August 31, 2026: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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Remediation of Material Weakness
We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the year ended August 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our current executive officer and director is as follows:
| Name | Age | Position | ||||
| Chiyuan Deng | 61 | Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director | ||||
| Linqing Ye | 45 | Appointed on May 15, 2025, Resigned on June 4, 2025 as CEO and resigned on October 28, 2025 as Director | ||||
Chiyuan Deng
Mr. Deng is an investor, producer, and director of Chinese films. He has worked as Vice Chairman of the Guangdong Province Film and TV Production Industry Association and Vice Secretary General of the China City Image Project Advancement Committee. He has extensive investment and management experience in China, including in the areas of corporate development and business investment activities. Mr. Deng graduated from Guangzhou Broadcast TV University in 1987. Mr. Deng is Jianli Deng’s father.
Mr. Deng does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Linqing Ye
Linqing Ye, age 45, currently works as the vice president of Equivalent Film Limited since 2021. Mr. Ye worked as director and COO of the Company from August 2017 to August 2020. Previously, he worked in the management of a filming studio and production group. Mr. Ye has over 20 years of experience working in movie production, and from 2008 to 2010 he worked as a video photographer with a team that served as a partner for Google.
Aside from serving as a director with our Company from 2017 to 2020, Mr. Ye does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
On May 15, 2025, our board of directors appointed Linqing Ye as our Chief Executive Officer, Chief Financial Officer and a member of our board of directors. And on June 4, 2025, Linqing Ye resigned as our Chief Executive Officer and Chief Financial Officer, but remained as a member of our board of directors. On October 28, 2025, Linqing Ye resigned as a member of board of directors. There was no known disagreement with Mr. Ye on any matter relating to our operations, policies or practices.
Other Significant Employees
Other than our executive officer, we do not currently have any significant employees.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, subject to their respective employment agreements.
Family Relationships
None.
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Involvement in Certain Legal Proceedings
During the past 10 years, none of our current executive officers, nominees for directors, or current directors have been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:
| 1. | Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing; |
| 2. | Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| 3. | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities: |
| i. | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| ii. | Engaging in any type of business practice; or |
| iii. | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
| 4. | Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity; |
| 5. | Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
| 6. | Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
| 7. | Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
| i. | Any Federal or State securities or commodities law or regulation; or |
| ii. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| iii. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 8. | Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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Audit Committee
The Board of Directors established an audit committee to assist the Board of Directors in the execution of its responsibilities. Our audit committee, under its charter, is to be comprised solely of non-employee, independent directors as defined by NYSE American market listing standards.
The Audit Committee was established in October of 2019. As of the year ended August 31, 2025, we only have two directors, which has effectively ceased the work of the Audit Committee.
For the fiscal year ended August 31, 2025, the Audit Committee did not complete its tasks due to the lack of membership on the committee. Instead, one director resigned on October 28, 2025 and the sole member of the board authorized inclusion of the audited financial statements for the years ended August 31, 2025 and 2024 to be included in this Annual Report.
Compliance with Section 16(a) Of the Exchange Act
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended August 31, 2025, there have been no late reports, failures to file or transactions not timely reported, except Ayone Pictures was late in filings its Form 3, and late in filings its Form 4, and Chiyuan Deng was late in filing a Form 4.
Code of Ethics
We have adopted a Corporate Code of Business Conduct and Ethics and Financial Code of Ethics. These are attached as exhibits to our Annual Report for the year ended August 31, 2019.
Item 11. Executive Compensation
The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended August 31, 2025 and 2024.
| SUMMARY COMPENSATION TABLE | |||||||||
|
Name and principal position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
Chiyuan Deng President, CEO, CFO and Director |
2025 2024
|
99,000 15,049 |
0 0 |
400,000 0 |
0 0 |
0 0 |
0 0 |
0 0 |
499,000 15,049 |
Linqing Ye Former CEO, CFO and Director |
2025 2024
|
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
On July 30, 2018, we entered into an employment agreement with Chiyuan Deng to serve as our President. The agreement is for six years and we issued Mr. Deng 400,000 shares for his services. Under the agreement, Mr. Deng is eligible for a bonus if provided by the board, vacation, medical, insurance and other benefits.
On September 11, 2020 and May 24, 2022, the Company entered into two amended employment agreements with Chiyuan Deng, the Chief Executive Officer. Pursuant the amended agreements, the Company amended the compensation to Mr. Deng to include a salary of $180,000 annually, a reduction in common stock received under his initial employment agreement, a potential for a bonus in cash or shares, and the issuance of 100,000 shares of Series A Preferred Stock at par value $0.001. Mr. Deng returned 266,667 shares common stock to the Company received under his initial employment agreement. The Chief Executive Officer opted to forgo his salaries effective from October 2023.
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On February 14, 2025, the Company approved compensation of $99,000 to the Chief Executive Officer for the three months ended February 28, 2025 and the issuance up to 2.5 billion shares of common stock at the end of three months period. On March 14, 2025, the Company issued 2,000,000,000 shares of the Company’s common stock to the Chief Executive Officer which were valued at market price of $0.0002 per share for a total amount of $400,000.
For the year ended August 31, 2025, the Company incurred total compensation of $499,000 for the Chief Executive Officer. For the year ended August 31, 2024, the Company incurred total compensation of $15,049 for Chief Executive Officer.
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | ||||||||||||||||||||||||||||||||||||
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) | |||||||||||||||||||||||||||
| Chiyuan Deng | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Director Compensation
For the years ended August 31, 2024 and 2025, the Company doesn’t have any Director fees.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of November 28, 2025, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group. Unless otherwise stated, the address for each beneficial owner is at 144 Main Street, Mt. Kisco, NY 10549.
| Common Stock | Series A Preferred Stock | |||||||||||||||
| Name and Address of Beneficial Owner | Number of Shares Owned | Percent of Class(1)(2) | Number of Shares Owned | Percent of Class(1)(2) | ||||||||||||
| Chiyuan Deng(3) | 2,185,852,733 | 27% | 100,000 | 100 | % | |||||||||||
| All Directors and Executive Officers as a Group (1 person) | 27% | 100,000 | 100 | % | ||||||||||||
| 5% Holders | ||||||||||||||||
| Anyone Pictures Limited(4) | 3,750,000,000 | 47% | — | — | ||||||||||||
| (1) | Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of voting stock listed as owned by that person or entity. | |
| (2) | Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 8,121,266,321 shares of common stock issued and outstanding, and 100,000 shares of Series A Preferred Stock issued and outstanding, as of November 28, 2025. | |
| (3) | Includes 2,182,252,733 shares held in his name, 2,100,000 shares held in Zestv Features Ltd in which he has voting and disposition authority, 1,400,000 shares held in Bonus Media Investment Limited in which he has voting and disposition authority, and 100,000 shares which may be acquired from converting 100,000 Series A shares. | |
| (4) | Heidi Liu has voting and dispositive authority over these shares. |
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Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as provided in “Description of Business” and “Executive Compensation” set forth above, and the related party transactions disclosed in Note 12 of the Company’s consolidated financial statements for the years ended August 31, 2025, for the past two fiscal years there have not been, and there is not currently proposed, any other transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
Related party loans and line of credit agreements
In support of the Company’s operations and cash requirements, the Company may rely on advances from stockholders until such time that it can sustain its operations or obtain adequate financing through equity sales or traditional debt financing.
Mr. Chiyuan Deng, the Chief Executive Officer
On June 1, 2023, Mr. Chiyuan Deng, the Company’s Chief Executive Officer and a stockholder, entered into a line of credit agreement with the Company. Under the agreement, Mr. Deng agreed to provide a line of credit of up to $1,500,000, which included the existing shareholder loan balance of $697,281. The line of credit is non-interest bearing and due on demand.
For the year ended August 31, 2025, Mr. Deng provided additional loans totaling $4,324,644 to meet the Company’s working capital needs. As of August 31, 2025, the Company had repaid $3,895,788. For the year ended August 31, 2024, Chiyuan Deng provided additional loans totaling $794,865 for its working capital needs. As of August 31, 2024, the Company has repaid $971,365. The loans are non-interest bearing and due on demand. The Company recognized imputed interest at 5% per annum on the outstanding balances as of August 31, 2025 and 2024. As of August 31, 2025 and 2024, the outstanding loan balances due to Mr. Deng were $622,030 and $193,174, respectively.
Anyone Pictures Limited
On March 1, 2025, the Company entered into a line of credit agreement with Anyone Pictures Limited, a related party, for up to $2,000,000. The loan is non-interest bearing and due on demand. During the year ended August 31, 2025, Anyone Pictures Limited advanced $2,473,601 to the Company for working capital purposes, of which $1,284,235 was repaid as of August 31, 2025. The Company recognized imputed interest at 5% per annum on the outstanding balances as of August 31, 2025. As of August 31, 2025, the outstanding loan balances due to Anyone Pictures Limited were $1,189,366.
Share issuance – related party - Anyone Pictures Limited
On February 21, 2025, the Company entered into a stock purchase agreement with Anyone Pictures Limited. Under the terms of the agreement, the Company issued 2,000,000,000 shares of its common stock at a value of $0.00015 per share, for total gross proceeds of $300,000.
On May 15, 2025, the Company entered into another stock purchase agreement with Anyone Pictures Limited. Pursuant to this agreement, the Company issued 1,750,000,000 shares of its common stock at a value of $0.0002 per share, for total gross proceeds of $350,000. Following the issuance, Anyone Pictures Limited held approximately 47% of the Company’s total outstanding common stock.
Revenue and accounts receivable - related party - Anyone Pictures Limited
For the year ended August 31, 2025, the Company sold broadcast rights of six movies and two television series to Anyone Pictures Limited, a related party, for total consideration of $1,294,000. The Company also recognized a license revenue of $435,000 for granting Anyone Pictures Limited access to the NFT MMM platform. In addition, the Company recognized consulting service revenue of $270,000 from Anyone Pictures Limited related to AI-based solutions and project oversight services designed to enhance short drama market accuracy, personalization, and advertising monetization.
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As of August 31, 2025, the Company had no outstanding accounts receivable from Anyone Pictures Limited.
Revenue and accounts receivable - related party - Zestv Studios Limited
On August 5, 2024, the Company has entered into an agreement with Zestv Studios Limited to license its offline broadcast rights of 1 movie for $105,000. The granted offline broadcast rights are globally exclusive, with the exception of Mainland China and United States.
As of August 31, 2025 and 2024, the Company had no outstanding accounts receivable from Zestv Studios Limited.
Accounts payable and accrued liabilities – related party - Zestv Studios Limited
On November 28, 2023, the Company sold the software-in-progress to the Developer for $385,000. Zestv Studios Limited collected the payment on behalf of the Company. The payment of $385,000 reduced the loan from related parties as of November 30, 2023.
During the year ended August 31, 2024, Zestv Studios Limited has settled operating expenses of $154,942 on behalf of the Company. The amount paid by Zestv Studios Limited was fully settled as of August 31, 2024.
As of August 31, 2025 and 2024, the Company had $nil payable to Zestv Studios Limited.
Executives’ salaries
On September 11, 2020 and May 24, 2022, the Company entered into two amended employment agreements with Mr. Chiyuan Deng, the Chief Executive Officer. Pursuant the amended agreements, the Company amended the compensation to Mr. Deng to include a salary of $180,000 annually, a reduction in common stock received under his initial employment agreement, a potential for a bonus in cash or shares, and the issuance of 100,000 shares of Series A Preferred Stock at par value $0.001. Mr. Deng returned 266,667 shares of common stock to the Company that he had received under his initial employment agreement. Mr. Deng elected to forgo his salaries effective from October 2023.
On February 14, 2025, the Company approved compensation of $99,000 to Mr. Deng for the three months ended February 28, 2025 and the issuance up to 2.5 billion shares of common stock. On March 14, 2025, the Company issued 2,000,000,000 shares of common stock to Mr. Deng, valued at market price of $0.0002 per share, for total consideration of $400,000.
For the year ended August 31, 2025, the Company incurred total compensation expense of $499,000 related to Mr. Deng, the Chief Executive Officer. For the year ended August 31, 2024, total compensation to Mr. Deng was $15,049.
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Item 14. Principal Accounting Fees and Services
Below is the table of audit fees billed by our auditors in connection with the audits of the Company’s annual financial statements for the years ended:
| Financial Statements for the Year Ended August 31 |
Audit Services | Audit Related Fees | Tax Fees | Other Fees | |||||||||||
| 2025 |
Prager Metis CPAs: $162,000
|
$ | 0 | $ | 0 | $ | 0 | ||||||||
| 2024 |
Prager Metis CPAs: $171,500
|
$ | 0 | $ | 0 | $ | 0 | ||||||||
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PART IV
Item 15. Exhibits, Financial Statements Schedules
| (a) | Financial Statements and Schedules |
The following financial statements and schedules listed below are included in this Form 10-K.
Financial Statements (See Item 8)
| Incorporated by Reference |
Filed or Furnished | |||||||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | Herewith | |||||||
| 3.1 | Articles of Incorporation | S-1 | 3.1 | 10/10/14 | ||||||||
| 3.2 | Bylaws | S-1 | 3.2 | 10/10/14 | ||||||||
| 3.3 | Certificate of Amendment | 8-K | 3.1 | 6/7/18 | ||||||||
| 3.4 | Certificate of Change | 8-K | 3.1 | 6/18/19 | ||||||||
| 3.5 | Certificate of Amendment, dated October 11, 2022 | S-1 | 3.5 | 6/26/24 | ||||||||
| 3.6 | Certificate of Designation Series A Preferred | 8-K | 3.1 | 9/11/20 | ||||||||
| 3.7 | Certificate of Withdrawal of Designation for Series B Preferred | 8-K | 3.3 | 12/1/23 | ||||||||
| 3.8 | Certificate of Withdrawal of Designation for Series C Preferred | 8-K | 3.1 | 12/1/23 | ||||||||
| 3.9 | Certificate of Withdrawal of Designation for Series D Preferred | 8-K | 3.2 | 12/1/23 | ||||||||
| 4.1 | Convertible Promissory Note | 8-K | 4.1 | 11/21/19 | ||||||||
| 4.2 | Convertible Debenture | 8-K | 4.1 | 12/18/19 | ||||||||
| . | ||||||||||||
| 4.3 | Common Stock Purchase Warrant | 8-K | 4.2 | 12/18/19 | ||||||||
| 4.4 | Convertible Promissory Note | 8-K | 4.1 | 1/10/20 | ||||||||
| 4.5 | Convertible Promissory Note | 8-K | 4.2 | 1/10/20 | ||||||||
| 4.6 | 10% Convertible Note | 8-K | 4.1 | 2/21/20 | ||||||||
| 4.7 | 10% Convertible Note | 8-K | 4.2 | 2/21/20 | ||||||||
| 4.8 | Convertible Promissory Note | 8-K | 4.1 | 3/18/20 | ||||||||
| 4.9 | Common Stock Purchase Warrant | 8-K | 10.1 | 3/18/20 | ||||||||
| 4.10 | 10% Convertible Note | 8-K | 4.1 | 7/23/20 | ||||||||
| 4.11 | Convertible Promissory Note | 8-K | 4.1 | 7/28/20 | ||||||||
| 4.12 | Common Stock Purchase Warrant | 8-K | 4.1 | 8.3.20 | ||||||||
| 4.13 | Convertible Promissory Note | 8-K | 4.1 | 8/24/2020 | ||||||||
| 4.14 | Convertible Promissory Note | 8-K | 4.1 | 9/4/20 | ||||||||
| 4.15 | Convertible Promissory Note | 8-K | 4.2 | 9/4/20 | ||||||||
| 4.16 | Convertible Promissory Note | 8-K | 4.1 | 10/15/20 | ||||||||
| 4.17 | Common Stock Purchase Warrant | 8-K | 4.1 | 8/2/22 | ||||||||
| 4.18 | Common Stock Purchase Warrant | 8-K | 4.1 | 6/13/24 | ||||||||
| 10.1 | Patent License Agreement | 8-K | 10.1 | 6/6/17 | ||||||||
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| 10.2 | Agreement for Termination and Release | 8-K | 10.1 | 11/1/18 | ||||||||
| 10.3 | Chief Marketing Officer Employment Agreement | 8-K | 10.1 | 2/11/19 | ||||||||
| 10.4 | Chief Operating Officer Employment Agreement | 8-K | 10.1 | 2/11/19 | ||||||||
| 10.5 | Securities Purchase Agreement | 8-K | 10.1 | 11/21/19 | ||||||||
| 10.6 | Securities Purchase Agreement | 8-K | 10.1 | 12/18/19 | ||||||||
| 10.7 | Securities Purchase Agreement | 8-K | 10.1 | 1/10/20 | ||||||||
| 10.8 | Securities Purchase Agreement | 8-K | 10.2 | 1/10/20 | ||||||||
| 10.9 | Securities Purchase Agreement | 8-K | 10.1 | 2/21/20 | ||||||||
| 10.10 | Securities Purchase Agreement | 8-K | 10.2 | 2/21/20 | ||||||||
| 10.11 | Securities Purchase Agreement | 8-K | 4.2 | 3/18/20 | ||||||||
| 10.12 | Securities Purchase Agreement | 8-K | 10.1 | 7/23/20 | ||||||||
| 10.13 | Securities Purchase Agreement | 8-K | 10.1 | 7/28/20 | ||||||||
| 10.14 | Equity Purchase Agreement | 8-K | 10.1 | 8/3/20 | ||||||||
| 10.15 | Registration Rights Agreement | 8-K | 10.2 | 8/3/20 | ||||||||
| 10.16 | Securities Purchase Agreement | 8-K | 10.1 | 8/24/20 | ||||||||
| 10.17 | Separation Agreement and Release with Jianli Deng, dated August 29, 2020 | 8-K | 10.1 | 9/1/20 | ||||||||
| 10.18 | Separation Agreement and Release with Lijun Yu, dated August 29, 2020 | 8-K | 10.2 | 9/1/20 | ||||||||
| 10.19 | Separation Agreement and Release with Linqing Ye, dated August 29, 2020 | 8-K | 10.3 | 9/1/20 | ||||||||
| 10.20 | Securities Purchase Agreement | 8-K | 10.1 | 9/4/20 | ||||||||
| 10.21 | Securities Purchase Agreement | 8-K | 10.2 | 9/4/20 | ||||||||
| 10.22 | Securities Purchase Agreement | 8-K | 10.1 | 10/15/20 | ||||||||
| 10.23 | Securities Purchase Agreement | 8-K | 10.1 | 10/20/20 | ||||||||
| 10.24 | Termination and Release Agreement | 8-K | 10.1 | 11/25/20 | ||||||||
| 10.25 | Termination and Release Agreement | 8-K | 10.1 | 12/1/20 | ||||||||
| 10.26 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 1/29/21 | ||||||||
| 10.27 | Employment Agreement | 8-K | 10.1 | 2/24/21 | ||||||||
| 10.28 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 3/2/21 | ||||||||
| 10.29 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 11/3/21 | ||||||||
| 10.30 | Lease Agreement | 8-K | 10.1 | 11/2/21 | ||||||||
| 10.31 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 9/13/21 |
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| 10.32 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 1/28/22 | ||||||||
| 10.33 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 3/21/22 | ||||||||
| 10.34 | Amendment to Employment Agreement | 8-K | 10.1 | 5/24/22 | ||||||||
| 10.35 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 6/17/22 | ||||||||
| 10.36 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 8/1/22 | ||||||||
| 10.37 | Common Stock Purchase Agreement | 8-K | 10.1 | 8/2/22 | ||||||||
| 10.38 | Form of Repurchase Agreement | 8-K | 10.1 | 1/29/24 | ||||||||
| 10.39 | Series C Preferred Stock Purchase Agreement | 8-K | 10.1 | 9/15/22 | ||||||||
| 10.40 | Common Stock Purchase Agreement | 8-K | 10.1 | 6/13/24 | ||||||||
| 10.41 | Stock Purchase Agreement | 8-K | 10.1 | 2/25/25 | ||||||||
| 10.42 | Contribution Agreement | 8-K | 10.1 | 5/9/25 | ||||||||
| 10.45 | License Agreement | 8-K | 10.2 | 5/9/25 | ||||||||
| 10.46 | Securities Purchase Agreement | 8-K | 10.1 | 5/27/25 | ||||||||
| 10.47 | Amendment to License Agreement | 8-K | 10.1 | 7/14/25 | ||||||||
|
10.48
|
Final Execution Agreement for Intellectual Property Transfer | 8-K | 10.2 | 7/14/25 | ||||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
| 101 INS* | Inline XBLR Instance Document | |||||||||||
| 101 SCH* |
Inline XBLR Taxonomy Extension Schema Document |
|||||||||||
| 101 CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|||||||||||
| 101 LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|||||||||||
| 101 PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|||||||||||
| 101 DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|||||||||||
| 104* |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 attachments) |
|||||||||||
* These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section
1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 16. Form 10-K Summary
None
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AB International Group Corp.
| DATE | SIGNATURE | TITLE | ||
| December 1, 2025 | /s/ Chiyuan Deng | Chief Executive Officer, Chief Financial Officer and Director | ||
| Chiyuan Deng | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| DATE | SIGNATURE | TITLE | ||
December 1, 2025 |
/s/ Chiyuan Deng | Chief Executive Officer, Chief Financial Officer and Director | ||
| Chiyuan Deng | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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