AI Era Corp (ABQQ) swings to profit as IP licensing jumps, but flags going concern risk
AI Era Corp. reported a sharp turnaround for the quarter ended November 30, 2025, with total revenue of
The company generated net income of
Despite the profit, management discloses substantial doubt about the ability to continue as a going concern, citing limited cash of
Positive
- Return to profitability with strong revenue growth: Revenue rose to
$1,523,129 from$626,350 year over year, and net income reached$362,900 compared with a prior loss of$50,036 , reflecting a profitable quarter driven by IP and service revenues.
Negative
- Substantial doubt about going concern: Management highlights limited cash of
$11,766 , an accumulated deficit of roughly$10.0M and a working capital deficit of about$2.6M , formally raising substantial doubt about the company’s ability to continue as a going concern. - Reliance on complex financing and shareholder support: Operations depend on related‑party credit lines, a large warrant liability of
$1,353,067 linked to billions of potential shares, and a discounted convertible note, indicating continued balance‑sheet and dilution risk.
Insights
Profit returned, but going concern and financing structure remain high risk.
AI Era Corp. delivered net income of
However, the balance sheet shows stress: cash was only
Funding relies heavily on related-party, non‑interest‑bearing credit lines and a large warrant liability of
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended
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Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from __________ to__________
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.) |
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(Address of principal executive offices)
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| (Registrant’s telephone number) | |
| _______________________________________________________ | |
| (Former name, former address and former fiscal year, if changed since last report) | |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X]
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les). [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☐ Large accelerated filer | ☐ Accelerated filer |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X]
State
the number of shares outstanding for each of the issuer’s classes of common stock, as of the latest practicable date:
| 1 |
| Table of Contents |
| TABLE OF CONTENTS | ||
| Page | ||
PART I – FINANCIAL INFORMATION
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| Item 1: | Financial Statements (Unaudited) | 3 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 9 |
| Item 4: | Controls and Procedures | 9 |
PART II – OTHER INFORMATION
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| Item 1: | Legal Proceedings | 11 |
| Item 1A: | Risk Factors | 11 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 11 |
| Item 3: | Defaults Upon Senior Securities | 11 |
| Item 4: | Mine Safety Disclosures | 11 |
| Item 5: | Other Information | 11 |
| Item 6: | Exhibits | 11 |
| 2 |
| Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our unaudited consolidated financial statements included in this Form 10-Q are as follows:
| F-1 | Consolidated Balance Sheets as of November 30, 2025 and August 31, 2025 (unaudited); |
| F-2 | Consolidated Statements of Operations for the three months ended November 30, 2025 and 2024 (unaudited); |
| F-3 | Consolidated Statements of Changes in Stockholders’ Equity for the three months ended November 30, 2025 and 2024 (unaudited); |
| F-4 | Consolidated Statements of Cash Flows for the three months ended November 30, 2025 and 2024 (unaudited); and |
| F-5 | Notes to Consolidated Financial Statements (unaudited) |
| 3 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
Consolidated Balance Sheets
(Unaudited)
| November 30, | August 31, | |||||||
| 2025 | 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Accounts receivable | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use operating lease assets | ||||||||
| Intangible assets, net | ||||||||
| Purchase deposits for intangible assets | ||||||||
| 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 | ||||||||
| 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 | $ | $ | ||||||
*Retroactively restated for the effect of reverse stock split (see Note 9).
The accompanying notes are an integral part of these financial statements.
| F-1 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | ||||||||
| November 30, | ||||||||
| 2025 | 2024 | |||||||
| REVENUE | ||||||||
| Copyrights sales | $ | — | $ | |||||
| Service revenue | ||||||||
| Service revenue – related party | 420,000 | — | ||||||
| Theater revenue | ||||||||
| Total revenue | ||||||||
| OPERATING COSTS AND EXPENSES | ||||||||
| Costs of copyrights sold | — | ( | ) | |||||
| Amortization expenses | ( | ) | ( | ) | ||||
| Theatre operating costs | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Total Operating Costs And Expenses | ( | ) | ( | ) | ||||
| Income (Loss) From Operations | ( | ) | ||||||
| OTHER (EXPENSES) INCOME | ||||||||
| Interest expense – related parties | ( | ) | ( | ) | ||||
| Loss on change in fair value of warrant liabilities | ( | ) | — | |||||
| Other income | — | |||||||
| Total Other (Expenses) Income | ( | ) | ||||||
| Income (Loss) Before Income Tax Benefit | ( | ) | ||||||
| Income tax | — | — | ||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| NET INCOME (LOSS) PER SHARE: BASIC | $ | $ | ( | ) | ||||
| NET INCOME (LOSS) PER SHARE: DILUTED | $ | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC* | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: DILUTED* | ||||||||
*Retroactively
restated for the effect of reverse stock split (see Note 9).
The accompanying notes are an integral part of these financial statements.
| F-2 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
| Common Stock | Preferred Stock | |||||||||||||||||||||||||||
| Number of Shares* | Amount* | Number of Shares | Amount | Additional Paid-in Capital * | Accumulated Deficit | Total Equity | ||||||||||||||||||||||
| Balance – August 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Imputed Interest | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance – November 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance – August 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance of Common shares for consulting services | — | — | — | |||||||||||||||||||||||||
| Imputed Interest | — | — | — | — | — | |||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||
| Balance – November 30, 2025 | $ | $ | $ | $ | ( | ) | $ |
*Retroactively restated for the effect of reverse stock split (see Note 9).
The accompanying notes are an integral part of these financial statements.
| F-3 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | ||||||||
| November 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Consulting fees paid in stock | — | |||||||
| Depreciation of fixed asset | ||||||||
| Amortization of intangible asset | ||||||||
| Loss on change in fair value of warrant liabilities | — | |||||||
| 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 | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayment to related party loan | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents – beginning of period | ||||||||
| Cash and cash equivalents – end of period | $ | $ | ||||||
| Supplemental Cash Flow Disclosures | ||||||||
| Cash paid for interest | $ | — | $ | — | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of AI Era Corp. (Formerly known as AB International Group Corp.) (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of August 31, 2025, is derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2025.
The unaudited consolidated financial statements as of and for the three months ended November 30, 2025 and 2024, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition, results of operations and cash flows. The results of operations for the three months ended November 30, 2025 and 2024 are not necessarily indicative of the results to be expected for any other interim period or for the entire year.
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.
| F-5 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 three months ended November 30, 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.
| F-6 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
| F-7 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
| F-8 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 November 30, 2025 and August 31, 2025, 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 three months ended November 30, 2025 and 2024, respectively:
| Three months ended | ||||||||
| November 30, 2025 | November 30, 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 | $ | $ | ||||||
| F-9 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
Warrant liability was measured at fair value on a recurring basis as of November 30, 2025 and August 31, 2025, respectively.
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. During the three months ended November 30, 2025, preferred stocks were included in the diluted earnings per share as they would be dilutive. During the three months ended November 30, 2024, no preferred stocks were included in the diluted earnings per share as they would be anti-dilutive.
| November 30, 2025 | November 30, 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* | ( | ) | ||||||
*Retroactively restated for the effect of reverse stock split (see Note 9).
| F-10 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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
The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. Warrants are evaluated at issuance to determine whether they meet the criteria for equity classification under ASC 815-40, Contracts in Entity’s Own Equity. Warrants that do not meet the equity classification criteria are classified as warrant liabilities. Equity-classified warrants are recorded in additional paid-in capital and are not subsequently remeasured.
Warrant liabilities are initially recognized at fair value on the issuance date and are subsequently remeasured at fair value at each reporting date until exercised, expired, or otherwise settled. Changes in fair value are recognized in earnings within the consolidated statements of operations.
The fair value of warrant liabilities is determined in accordance with ASC 820, Fair Value Measurement, using valuation techniques such as option-pricing models that incorporate assumptions including expected volatility, risk-free interest rate, expected term, and the Company’s stock price.
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.
| F-11 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
| F-12 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
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 November 30,
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.
| F-13 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 November 30, 2025 and August 31, 2025, the balance of property and equipment was as follows:
| November 30, 2025 | August 31, 2025 | |||||||
| Leasehold improvement | $ | $ | ||||||
| Appliances and furniture | ||||||||
| Total cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
NOTE 5 – INTANGIBLE ASSETS
As of November 30, 2025 and August 31, 2025, the balance of intangible assets was as follows:
| November 30, 2025 | August 31, 2025 | |||||||
| 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 three months ended November 30, 2025 and 2024 was $
| Twelve months ending November 30, | Amortization expense | ||||
| 2026 | $ | ||||
| 2027 | |||||
| Total | $ | ||||
| F-14 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 three months ended November 30, 2024, 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 three months ended November 30, 2024,
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 three months ended November 30,
2024, the total sale amount of intangible assets was $
On March 27, 2025,
the Company entered into an agreement with All-in-One Media Ltd. to acquire the copyrights and broadcast rights of 1,500 episodes of
short form drama series. On September 28, 2025, the Company entered into another agreement to acquire the copyrights and broadcast rights
of 500 episodes of short form drama series. During the three months ended November 30, 2025, the Company received the copyrights
from All-in-One Media Ltd. of 1,500 series and 500 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 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 three months ended November 30, 2025,
the total sale amount of intangible assets was $
| F-15 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6 – LEASES
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 three months ended November
30, 2025 and 2024 was $
The following is a schedule of maturities of lease liabilities:
| Twelve months ending November 30, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| Total future minimum lease payments | |||||
| Less: imputed interest | ( |
) | |||
| Total | $ | ||||
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:
| November 30, 2025 | August 31, 2025 | |||||||
| 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 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-16 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 three months ended November
30, 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, the Company’s major stockholder, for up to
$
Revenue and accounts receivable - related party - Anyone Pictures Limited
For the three months ended November
30, 2025, the Company recognized a license revenue of $
As of November 30, 2025 and
August 31, 2025, the Company had
| F-17 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 – STOCKHOLDERS’ EQUITY
Common shares
The Company had the following activities for the three months ended November 30, 2025:
Issuance of common shares for consulting services
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
Upon execution of the agreements,
the Company issued
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
Reverse Stock split
| F-18 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 – STOCKHOLDERS’ EQUITY (continued)
Common shares (continued)
The Company had no activities for the three months ended November 30, 2024.
As of November 30, 2025 and August
31, 2025, the Company had
Preferred shares
The Company had no preferred share activities for the three months ended November 30, 2025 and 2024.
As of November 30, 2025
and August 31, 2025, the Company had
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
As of November 30, 2025 and August 31, 2025, the
Company was authorized to issue
| F-19 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 – STOCKHOLDERS’ EQUITY (continued)
Warrants (continued)
As of November 30, 2025, the aggregate fair value
of the warrants was estimated at $
As of August 31, 2025, the aggregate fair value of
the warrants was estimated at $
As of November 30, 2025,
A summary of the status of the Company’s warrants as of November 30, 2025 and August 31, 2025 is presented below:
| Number of warrants | |||||||||||||
| Original shares issued | Original shares issued (split-adjusted) | Anti-dilution Adjusted | |||||||||||
| Warrants as of August 31, 2024 | — | ||||||||||||
| Adjustment | — | ||||||||||||
| Exercisable as of August 31, 2025 | — | ||||||||||||
| Adjustment | — | ||||||||||||
| Exercisable as of November 30, 2025 | — | ||||||||||||
| F-20 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 November 30, 2025 and August 31, 2025, the components of net deferred tax assets, including a valuation allowance, were as follows:
| November 30, 2025 | August 31, 2025 | |||||||
| Deferred tax asset attributable to: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | — | $ | — | ||||
For the three months ended November 30, 2025 and 2024, the Company and its subsidiaries generated net income and net losses respectively. 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, after considering the
potential utilization of existing net operating loss (“NOL”) carryforwards. As of November 30, 2024 and August 31, 2025,
the valuation allowance for deferred tax assets was $
Reconciliation between the statutory rate and the effective tax rate is as follows for the three months ended November 30, 2025 and 2024:
| Three months ended | ||||||||
| November 30, | ||||||||
| 2025 | 2024 | |||||||
| Federal statutory tax rate | % | % | ||||||
| Change in valuation allowance | ( | %) | ( | %) | ||||
| Effective tax rate | % | % | ||||||
During the three months ended November 30, 2025, 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 three months ended November 30, 2025.
During the three months ended November 30, 2024, the Company and its subsidiaries incurred net losses. As a result, the Company and its subsidiaries did not incur any income tax for the three months ended November 30, 2024.
| F-21 |
| Table of Contents |
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 11 – CONCENTRATION RISK
Concentration
For the three months ended November
30, 2025,
As of November 30, 2025,
For the three months ended November
30, 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 November 30, 2025. (See Note 6)
| F-22 |
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AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 three months ended November 30, 2025 and 2024, respectively.
| NOTE 13 - SEGMENT INFORMATION - Summary of Information by Segment | ||||||||||||||||||||||||
| IP Segment | Cinema Segment | Total | ||||||||||||||||||||||
| Three months ended | Three months ended | Three months ended | ||||||||||||||||||||||
| November 30 | November 30 | November 30 | ||||||||||||||||||||||
| 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.
Repurchase of shares
On December 8, 2025, the Company entered into a Repurchase Agreement (the “Repurchase Agreement”) with Anyone Pictures Limited (the “Stockholder”), pursuant to which the Company agreed to repurchase from the Stockholder 3,750,000,000 (split-adjusted 1,875,000) shares of the Company’s common stock, par value $0.001 per share (the “Shares”), for an aggregate purchase price of $675,000 USD (the “Purchase Price”), or approximately $0.00018 (split-adjusted $0.36) per share.
The repurchase represents approximately 46.1% of the Company’s currently outstanding common stock (based on 8,121,266,321 (split-adjusted 4,061,107) shares outstanding as of the most recent practicable date prior to the transaction). Upon closing of the transaction, the Shares will be returned to the Company’s treasury and canceled.
The transaction closed simultaneously with the execution of the Repurchase Agreement on December 8, 2025. Payment of the Purchase Price has been made, and the Shares have been surrendered and canceled on the books of the Company.
Reverse Stock split
The Board of Directors has fixed the reverse-split ratio at 1-for-2,000 and has directed that the reverse stock split implemented effective December 18, 2025 upon receipt of FINRA’s market-effective notice on December 17, 2025. As a result of the share consolidation, each 2,000 common shares outstanding automatically combines and converts to one issued and outstanding common share without any action on the part of the shareholder. (See Note 9)
Change name to “AI Era Corp”
The Company chang the name from “AB International Group Corp.” to “AI Era Corp.” and was effective December 18, 2025 upon receipt of FINRA’s market-effective notice on December 17, 2025.
Issuance of Common shares for officer bonus
On December 24, 2025, the sole director, Chiyuan Deng, approved his bonus compensation for serving as the Company’s Chief Executive Officer for bonus of 1,000,000 shares of common stock.
Issuance of Convertible note
On January 9, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) with Vanquish Funding Group Inc. (the “Lender”), pursuant to which the Company issued a convertible promissory note with a principal amount of $232,000. The note was issued with an original issue discount of $7,000, resulting in net proceeds of $225,000. The Note matures on October 15, 2026 and bears interest at a rate of 10% per annum, which is not payable until maturity.
The Note is convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), beginning 180 days after the issuance date, at a conversion price equal to 80% of the lowest trading price of the Common Stock during the twenty (20) trading days prior to the conversion date (a 20% discount to market). The Lender is limited to conversions that would not result in beneficial ownership exceeding 4.99% of the outstanding Common Stock (waivable up to 9.99%).
The Company may prepay the Note at any time within the first 180 days at 120% of the outstanding principal plus accrued interest. After 180 days, prepayment is not permitted without the Lender’s consent. The Note contains customary events of default, upon which the outstanding principal and interest may become immediately due and payable at 150% or 200% of the principal amount (depending on the default type), and the conversion price may be adjusted downward.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.
Other factors, which could have a material adverse effect on our operations and future prospects on a consolidated basis, include but are not limited to:
§ risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern;
§ the uncertainty of profitability based upon our history of losses;
§ legislative or regulatory changes;
§ risks related to our operations and uncertainties related to our business plan and business strategy;
§ changes in economic conditions;
§ uncertainty with respect to intellectual property rights, protecting those rights and claims of infringement of other’s intellectual property;
§ competition; and
§ cybersecurity concerns.
These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC, including the risks and uncertainties identified under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K.
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 November 30, 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 4,577 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.
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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.
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.
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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.
On December 8, 2025, we entered into a revised agreement with AI+ Hubs. Pursuant to the terms of the agreement, the subsidiary, AI+ Hubs contributed the assets and liabilities 1) all copyrights; and 2) 100% interest of the subsidiary, AB Cinemas NY, Inc. back to the Company for better resources allocation.
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. The Board of Directors has fixed the reverse-split ratio at 1-for-2,000 and has directed that the reverse stock split implemented effective December 18, 2025 upon receipt of FINRA’s market-effective notice on December 17, 2025. As a result of the share consolidation, each 2,000 common shares outstanding automatically combines and converts to one issued and outstanding common share without any action on the part of the shareholder.
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 corporate name change was effective December 18, 2025 (the “Market Effective Date”) upon receipt of FINRA’s market-effective notice on December 17, 2025.
The information on or accessible through our websites is not part of and is not incorporated by reference into this Quarterly Report on Form 10-Q , and the inclusion of our website addresses in this Quarterly Report on Form 10-Q 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.
Results of Operations
Revenues
Our total revenue reported for the three months ended November 30, 2025 and 2024 was $1,523,129 and $626,350, respectively.
The revenue for the three months ended November 30, 2025, was mainly attributable to the license fee received in connection with the licensing of our NFT MMM platform, broadcasting and download, 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 three months ended November 30, 2024, was mainly attributable to the license fee received in connection with the licensing of our NFT MMM platform, movie copyrights sales, 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. The increase in revenue was mainly due to the combined impact of: (i) the increase in embedded marketing service and consulting service fees during the three months ended November 30, 2025 as compared to the three months ended November 30, 2024; and (ii) the increase in type of services provided to the licensing for broadcasting and download during the three months ended November 30, 2025 as compared to the corresponding period in 2024; (iii) the decrease in licensing of our NFT MMM platform , movie copyrights sales and revenue generated from movie tickets and food and beverage sales from our operated movie theatre.
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Operation of our movie theatre started in October of 2022. For the three months ended November 30, 2025, we generated total revenue of $37,409, including $23,664 from ticket sales, $12,853 from food and beverage sales, and $892 from the advertisements compared with revenue of $78,150, including $49,501 from ticket sales, $23,934 from food and beverage sales, and $4,715 from the advertisements for the three months ended November 30, 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 providing embedded marketing services, license for broadcasting and download generating movie tickets and related revenues from our Mt. Kisco movie theatre in New York.
Operating Costs and Expenses
Operating costs and expenses were $1,126,151 for the three months ended November 30, 2025, as compared to $679,091 for the three months ended November 30, 2024. Our operating costs and expenses for the three months ended November 30, 2025 consisted of theatre operating costs of $21,356, amortization expenses of $918,781 and general and administrative expenses of $186,014. In contrast, our operating costs and expenses for the three months ended November 30, 2024 consisted of theatre operating costs of $44,960, amortization expenses of $154,722, costs of copyrights sold of $279,884, general and administrative expenses of $199,525.
We experienced a decrease in theatre operating costs in the three months ended November 30, 2025 as compared to the corresponding period in 2024, mainly due to the decrease in admission revenues and the decrease in movie exhibition costs as a percentage of admission revenue. The theatre operating costs decreased to $21,356 for the three months ended November 30, 2025 from $44,960 for the three months ended November 30, 2024.
We experienced an increase in amortization expenses for the three months ended November 30, 2025 as compared to the corresponding period in 2024, mainly due to the having more newly acquired intangible assets for the three months ended November 30, 2025 and in the later of year ended August 31, 2025.
The costs of copyrights sold for the three months ended November 30, 2025 was nil. The costs of copyrights sold for the three months ended November 30, 2024 represented the remaining costs of the 2 globally exclusive offline copyrights, with the exception of mainland China and 1 Mainland China exclusive broadcast rights when they were sold.
We experienced a decrease in general and administrative expenses for the three months ended November 30, 2025 as compared to the corresponding period in 2024, mainly as a result of decreased travel expenses, and salary expenses for the three months ended November 30, 2025 in contrast to the corresponding period in 2024.
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 2026 at various levels of operation.
Other Expense/ Other Income
We had other expense of $34,078 for the three months ended November 30, 2025, as compared with other income of $2,705 for the corresponding period in 2024. Our other expense for the three months ended November 30, 2025 was the net amount of the interest expense – related parties and the loss on change in fair value of warrant liabilities. Our other income for the three months ended November 30, 2024 was the net amount of the other income generated from the advertising agency services and the interest expense – related party.
Net Income/ Net Loss
We incurred a net income of $362,900 for the three months ended November 30, 2025, as compared with a net loss of $ 50,036 for the three months ended November 30, 2024.
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Liquidity and Capital Resources
As of November 30, 2025, we had $109,416 in current assets consisting of cash, prepaid expenses, and accounts receivable. Our total current liabilities as of November 30, 2025 were $2,691,640. As a result, we have a working capital deficit of $2,582,224 as of November 30, 2025 as compared with a working capital deficit of $3,250,026 as of August 31, 2025.
Operating activities generated $769,846 in cash for the three months ended November 30, 2025, as compared with $241,109 generated in cash for the three months ended November 30, 2024.
Our positive operating cash flow for the three months ended November 30, 2025 was mainly the result of the cash generated in net income combined with the amortization of intangible assets and decrease in accounts receivable offset by cash used in the purchase of intangible assets and decrease in accounts payable and accrued liabilities.
Our positive operating cash flow for the three months ended November 30, 2024 was mainly the result of our net loss combined with the operating changes in the purchase of movie and TV series broadcast right and copyright, and purchase deposit, offset by the amortization of intangible assets, sales of copyrights, the decrease in accounts receivable, and the increase in accounts payable and accrued liabilities.
Investing activities was $Nil for the three months ended November 30, 2025 and 2024, respectively.
Financing activities used $771,771 for the three months ended November 30, 2025, as compared with $38,813 used by financing activities for the three months ended November 30, 2024. Our negative financing cash flow for the three months ended November 30, 2025 was due to the settlement of loans due to two related parties. Our negative financing cash flow for the three months ended November 30, 2024 was due to the settlement of loans due to a related party.
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 November 30, 2025, the Company had limited cash, an accumulated deficit of approximately $10.0 million and a working capital deficit of approximately $2.6 million. 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 November 30, 2025, there were no off-balance sheet arrangements.
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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.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. For a full description of our critical accounting policies, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2025 Form 10-K. While there have been no material changes to our critical accounting policies, or the methodologies or assumptions we apply under them, we continue to monitor such methodologies and assumptions.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of November 30, 2025. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of November 30, 2025, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of November 30, 2025, our disclosure controls and procedures were not effective: (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.
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Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan 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 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.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended November 30, 2025, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance 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 can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon 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. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material 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 1A: Risk Factors
Our business faces many risks, a number of which are described in the section captioned “Risk Factors” in our Annual Report for the year ended August 31, 2025, filed with the SEC on December 1, 2025. The risks described may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report occur, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report, and the information contained in the section captioned “Forward-Looking Statements” and elsewhere in this Quarterly Report before deciding whether to invest in our securities.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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 80,000 post-split shares of the Company’s restricted common stock as compensation for services.
Upon execution of the agreements, the Company issued 15,000 post-split restricted common shares to each of the consultants, totaling 45,000, 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 5,000 post-split 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.
These securities were issued pursuant to Section 4(a)(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 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
N/A
Item 5. Other Information
None
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Item 6. Exhibits
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| Exhibit Number |
Description of Exhibit
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| 31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 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 |
| 101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2025 formatted in Extensible Business Reporting Language (XBRL). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on the dates below on its behalf by the undersigned thereunto duly authorized.
| AI Era Corp. |
| By: | /s/ Chiyuan Deng |
| Chief Executive Officer, Chief Financial Officer, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director | |
| January 14, 2026 |
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FAQ
How did AI Era Corp (ABQQ) perform this quarter?
For the quarter ended November 30, 2025, AI Era Corp. reported revenue of
What were the main revenue drivers for AI Era Corp (ABQQ) this quarter?
Revenue was led by the IP segment. Service revenue, including broadcast and download licensing, NFT platform licensing, embedded marketing and consulting, totaled
What is the financial condition and going concern status of AI Era Corp (ABQQ)?
As of November 30, 2025, AI Era Corp. held cash of
How dependent is AI Era Corp (ABQQ) on related parties for funding and revenue?
The company relies on non‑interest‑bearing lines of credit from its CEO and major stockholder. As of November 30, 2025, loans due to these related parties totaled
What significant equity and capital structure changes has AI Era Corp (ABQQ) disclosed?
Subsequent to the quarter, the company repurchased 3,750,000,000 (split‑adjusted 1,875,000) common shares from a major stockholder for
What are the key terms of AI Era Corp’s new convertible note?
On January 9, 2026, AI Era Corp. issued a
How concentrated are AI Era Corp (ABQQ)’s customers and suppliers?
For the three months ended November 30, 2025, three customers accounted for
