~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY~~Consolidated Statements of Stockholders’ Equity (Deficit)

The accompanying notes are an integral part of these financial ~~statements~~statements.

AB International Group Corp. (the "Company", "we" or "us") was incorporated under the laws of the State of Nevada on July 29, 2013 and originally intended to purchase used cars in the United States and sell them in Krygyzstan. The Company's fiscal year end is August 31.

We are an intellectual property (IP) and movie investment and licensing firm, focused on acquisitions and development of various intellectual property. We are engaged to acquisition and distribution of movies. We have a patent license to a video synthesis and release system for mobile communications equipment, in which the technology is the subject of a utility model patent in the People's Republic of China. We had launched a business application (Ai Bian Quan Qiu) through smartphones and official social media accounts based on WeChat platform in February 2019, utilizing Artificial Intelligence, it is a matching platform for performers, advertiser merchants, and owners for more efficient services. We generate revenues through an agency service fee from each matched performance

On January 22, 2016, our former sole officer, who owned 83% of our outstanding common shares, sold all of his common shares to unrelated investor Jianli Deng. After the stock sale, we modified our business to focus on the creation of a mobile app marketing engine. The app was designed for movie trailer promotions and we planned to generate a subscriber base of smartphone users primarily through pre-installed app smartphone makers, online app stores, WeChat official accounts, Weibo and other social network media outlets and sell prepaid cards or coins to movie distributors or other video advertisers in China. We created the app “Amoney” for the Android smartphone platform to develop a WeChat micro-shop that was designed to display and deliver a variety of information and links for download or online watch prices in the China market.

On June 1, 2017, we entered into a Patent License Agreement (the “Agreement”) pursuant to which Guangzhou Shengshituhua Film and Television Company Limited, a company incorporated in China (“Licensor”), granted to us a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”). The Technology is the subject of a utility patent in the People’s Republic of China. Under the Agreement, we are able to utilize, improve upon, and sub-license the technology for an initial period of one year from October 1, 2017 to September 30, 2018, subject to a right to renew. We were obligated to pay the Licensor $500,000 within 30 days of the date of the Agreement and a royalty fee in the amount of 20% of any proceeds resulting from our utilization of the Technology, whether in the form of sub-licensing fees or sales of licensed products. Our Chief Executive Officer, Chiyuan Deng and former Chief Executive Officer, Jianli Deng, jointly own and control Licensor. On October 10, 2017, we completed the payment of $500,000 initial payment amount due under the Agreement. In October ~~2018,~~of 2019, the term of this sublicensing agreement was renewed and extended until ~~October~~December 31, ~~2019.~~2020. Our License to the Technology generates revenue through sub-license monthly fees from a smartphone app on Android devices. This app was already existing and licensed at the time we acquired the Technology.

Our License to the Technology generates revenue through sub-license monthly fees from a smartphone app on Android devices. This app was already existing and licensed at the time we acquired the Technology.

On March 10, 2018, we acquired intellectual property for $200,000 from All In One Media Ltd, previously named as Aura Blocks Ltd. On March 19, 2018, we entered into consulting agreements (the “Consulting Agreements”) with four consultants (the “Consultants”). The Consulting Agreements have terms or either two or three years. Under the Consulting Agreements the Consultants will provide services to us in Hong Kong and China related to blockchain technology and krypto kiosks. In consideration for the services provided by the Consultants, we have issued the Consultants a total of 1,100,000 shares of our common stock. On November 10, 2018, the Company sold this intellectual property to China IPTV Industry Park Holdings Ltd. for $80,000.

On March 21, 2018, we acquired the intellectual assets of KryptoKiosk Limited, a crypto currencies kiosk company which has licenses and patent in Australia, which enable the operation of cryptocurrency ATMs that allow buying and selling of Bitcoin, Litecoin, and Ethererum all in one terminal. The Company plans to generate revenue through sub-licensing fees for the operation of cryptocurrency ATMs. Through the foregoing the Company proposes to bring a physical aspect to something that is otherwise very abstract to people. We also issued to JPC Fintech Limited 2,400,000 common shares with a market value of $72,000 exchange of KryptoKiosk Limited’s assets consist mostly of intellectual property, including, but not limited to, certain domain names, copyrights, trademarks, and patents pending, but also include contract rights and personal property.

We planned to generate revenue through sub-licensing fees for the operation of cryptocurrency ATMs. Through the foregoing, we proposed to bring a physical aspect to something that is otherwise very abstract to people. We planned to invest in machines and sell sub-licenses in the Asia Pacific region with future world-wide expansion. We had promoted and marketed the ATM business for 6 months or until around August 2018, because the BTC and cryptocurrencies price went down. The IP, however, was never transferred to us. We have repeatedly requested from Messrs. Grounds, Vickery and Shakespare access to the domains and websites and other information concerning the IP assets. As of the date of this annual report, no such information has been provided. In addition, the IP including domain names were transferred to others while Messrs. Vickery and Shakespare were officers of our company. As a result, we ceased promotions and marketing on the ATM business and relations cryptocurrencies business in September 2018. On November 21, 2018, we had sent the final notice that JPC Fintech has materially breached the agreement. We requested that JPC Fintech Ltd. return its stock certificate received in the transaction to our transfer agent for immediate cancellation. We have not yet received the certificate for termination. In February of 2020, 100% of the intellectual assets of KryptoKiosk Limited‘s carrying value $48,000 net of amortization is written off since the IP was never transferred to us and no revenue was generated from this intellectual asset.

On May 9, 2018, we entered into an investor agreement with iCrowdU Inc. We agreed to purchase 228,013 shares of iCrowdU Inc. at a share price of $1.228 for total consideration of $280,000. iCrowdU Inc. offers an online platform and mobile app for crowd funding services targeting the global crowd funding market.

Furthermore, it was agreed to exchange 2,000,000 shares of our common stock for 2,000,000 shares of common stock in iCrowdU Inc. This share exchange was made as collateral in advance of an investment of $1,935,000 by us into iCrowdU Inc., which never occurred.

On or about May 9, 2018, we entered into consultancy agreements with Alexander Holtermann, Ian Wright and Luis Hadic. Each of Messrs. Holtermann, Wright and Hadic received 200,000 shares of our common stock under the consultancy agreements.

On or about July 26, 2018, we entered into an investment agreement with iCrowdU Inc. for the purchase of 40% of iCrowdU in exchange for 8,000,000 shares of our common stock that would be split between Messrs. Holtermann and Wright at 70% and 30%, respectively, and an investment of $10,000,000. The 8,000,000 shares were cut but not delivered to Messrs. Holtermann and Wright and no part of the $10,000,000 was invested by us into iCrowdU Inc.

On or about July 31, 2018, we entered into employment agreements with Messrs. Holtermann and Wright for the consideration provided for under the agreements.

On October 25, 2018, the above parties entered into an Agreement for Termination and Release that terminated all outstanding agreements among the parties and released each party from the other. We agreed to settle outstanding expenses and costs incurred by iCrowdU Inc., in the sum of $6,444.90. In addition, all parties agreed to return any shares received from the above agreements, save we shall be permitted to retain the 228,013 shares purchased in iCrowdU Inc. Finally, we agreed to amend our Current Report on Form 8-K concerning certain disclosures made therein. We amended the report as per the agreement.

On September 5, 2018, the Company entered into an agreement to acquire a movie copyright for $768,000 from All In One Media Ltd, which holds 200,000 common shares of the Company as of August 31, 2019 and is previously named as Aura Blocks Limited. The remaining balance to Aura Blocks Limited is $153,600 as of August 31, 2019. The Company has obtained the exclusive permanent broadcasting right outside the mainland China and is expected to generate revenues from showing the movie online, in theaters, and on TV outside the mainland China once this movie is completed in June, 2019. In August of 2019, the Company sold this movie copyright to China IPTV Industry Park Holding Ltd for $857,600 with a gain of $89,538.

In December of 2018, we engaged StarEastnet, a software developer that holds 171,000 common shares of the Company as of August 31, 2019, to start developing a performance matching platform (Ai Bian Quan Qiu) and a WeChat official account to advertise the platform. The matching platform is to arrange performance events for celebrities and performers. Performers

can set their schedules and quotes on the platform. The platform will maximize their profits from performance events by optimizing their schedules based upon quotes and event locations and save time from commuting among different events. “Ai Bian Quan Qiu” utilizes the artificial intelligence (AI) matching technology to instantly and accurately match performers and advertisers or merchants. The company charges agency service fees for each successful event matched through the platform. Since no large social gathering is allowed as a result of COVID-19, there has been no revenue generated from the performance matching platform (Ai Bian Quan Qiu) since the end of January, 2020. The Company decided that 100% of the carrying amount of Ai Bian Quan Qiu platform and its Wechat official account should be impaired.

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In June, 2019, the Company completed the development of a video mix APP for social video sharing via iOS and Android smartphones. This app was originally planned to take advantage of the core design philosophy of “My film anyone, anywhere, anytime be together” as similar and competitive innovative video and community apps have been activated on over 2 million unique devices in China as of December 31, 2017 and precipitated the duet video synthesis phenomenon in China. However, the Company decided to focus on the “Ai Bian Quan Qiu” platform as its main business and thus sold the video mix APP to Anyone Pictures Limited, which holds 242,980 common shares of the Company, for $422,400 with a gain of $59,792 in August of 2019.Due to the quarantine and continuous control imposed by the state and local governments in areas affected by COVID-19, merchant advertising events were suspended. The Company decided to shut down the Ai Bian Quan Qiu platform, which has created an adverse impact on the business and financial condition and hampered its ability to generate revenue and access sources of liquidity on reasonable terms.

In August of 2019, the Company entered into a one-year loan agreement to lend $1,047,040 at an annual interest rate of 10% to All In One Media Ltd, previously named as Aura Blocks Limited, for producing films and digital videos in Hong Kong. The term of note receivable is from August 1, 2019 to July 31, 2020. This loan principal balance was paid off in full in July, 2020.

On September 4, 2019, the Company entered into another loan agreement to lend $1,049,600 at an annual interest rate of 10% to All In One Media Ltd, previously named as Aura Blocks Limited. The term of note receivable is from September 4, 2019 to March 3, 2020. This loan balance was paid off in full on May 4th, 2020 with two months’ extension.

On April 22, 2020, the Company has announced the first phase development of it’s a video streaming service, the Company expects a full launch by December, 2020. The online service will be marketed and distributed in the world under the brand name ABQQ.tv. ABQQ.tv is expected to generate a new and profitable revenue stream immediately following its launch derived from its hybrid subscription and advertising business model. The Company ~~expects~~is currently testing the website at the final stage, the Company's professional team are sourcing such dramas and films to ~~have similar short term note receivables for~~prepare the ~~next few years.~~ABQQ.tv official launch in December, 2020.

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year-end is August 31. The financial statements have been prepared on a consolidated basis, with their fully owned subsidiary App Board Limited.

The financial statements have been prepared on a consolidated basis, with the Company’s fully owned subsidiary App Board Limited registered and located in Hong Kong. ~~No intercompany balances or transactions exist during the period ended~~As of November 30, ~~2019~~2020 and ~~2018.~~August 31, 2020, there were intercompany receivable and payables balance of $384,000 and $9,060, respectively. The intercompany receivable and payable balances are offset to zero in the consolidated financial statements.

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.

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company’s planned operations are outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk ~~arise~~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. Non-monetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included in current results of operations.

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Accounts receivable consist of amounts due from Anyone Pictures Limited for the sub-licensing fee revenue. Amounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. No amount for bad debt expense has been recorded by the Company during the three months ended November 30, ~~2019~~2020 and ~~2018,~~2019, and no write-off for bad debt were recorded for the three months ended November 30, ~~2019~~2020 and ~~2018.~~2019.

Prepaid expenses primarily consist of consulting fees that have been paid in advance and prepayments of OTC market annual fee, ~~and~~ website domain fee, TV promotion fee, and investor relation fee.

Note receivable is a one-year note bearing annual interest of 10% with the principal payable annually at the end of the term. Interest is due and payable, at the election of the Company, in cash on the Maturity Date, as applicable, or if the note receivable is prepaid earlier, on such prepayment date. Therefore, interest income is recorded along with interest receivable throughout the note ~~period.~~outstanding periods.

Fixed asset consists of furniture and appliances acquired for the office. The balance is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives listed below:

Leasehold improvement is related to the enhancements paid by the Company to leased office and store. 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. Leasehold improvement is amortized over the lease term of 3 years.

Amortized costs of the intangible asset are recorded as cost of sales, as the intangible asset is directly related to generation of revenues in the Company.

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In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance to improve financial reporting about leasing transactions. This guidance required organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The original guidance required application on a modified retrospective basis with the earliest period presented. In August 2018, the FASB issued new guidance which included an option to not restate comparative periods in transition. Under this new guidance, a company applies the standard to leases in place as of the date of initial application, records a cumulative-effect adjustment to retained earnings as of the first day of the adoption year, and follows the new rules for all leases entered or modified going forward. The Company adopted this new standard on June 1, 2020 with no retrospective adjustments to prior comparative periods. In accordance with ASC 250-10-45-14, a change in accounting principle made in an interim period shall be reflected as if the entity had adopted the new principle on the first day of the adoption year, which is September 1, 2019 for the Company. As such, the adoption of ASC 842 lease accounting standard has resulted in $196,813 lease liabilities with corresponding $201,025 ROU assets net of amortization as of September 1, 2019 based on the present value of the remaining rental payments under current leasing standards for existing leases. The remaining balance of lease liabilities are presented within the current portion of lease liabilities and the non-current portion of lease liabilities on the Consolidated Balance Sheet.

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 G&A expense. For the year ended August 31, 2020, the impairment loss of intangible assets was $125,062, including $48,000 for the intellectual assets acquired from KryptoKiosk Limited and $77,062 for the performance matching platform “Ai Bian Quan Qiu” and its WeChat official account.

The Company adopted ASC Topic 606, “Revenue from Contracts with Customers”, applying the modified retrospective method.

In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

The Company does not believe that significant management judgements are involved in revenue recognition, but the amount and timing of the Company’s revenues could be different for any period if management made different judgments or utilized different estimates. Generally, the Company recognizes revenue under ASC Topic 606 for its performance obligation.

The Company generates revenue from sub-licensing a patent and charging a service fee from the “Ai Bian Quan Qiu” platform for actors and commercial events matching.

The sub-licensing revenue is recognized monthly based upon the number of users who download the APP that utilizes the Company’s patent. The monthly royalty the Company charges Anyone Pictures Limited is $12.8 per 1000 APP users. ~~During the year of 2019, both~~Both parties agreed to charge the sublicensing fee based upon a fixed number 2,000,000 users.

The “Ai Bian Quan Qiu” platform service revenue is derived principally from providing matching service to merchants who are looking for actors to perform at their advertising events. The Company recognizes revenue upon a matching event is accepted by actors with a service fee of 10% of the actors’ quote for performing at the events. For the service fee revenue from the “Ai Bian Quan Qiu” platform, the Company does not control the specified goods or services before that is transferred to the customers and thus the Company is an agent. Therefore, this service revenue is recognized at a net basis.

The Company has operating leases for an office and a store for display with expiration dates through 2022. The Company determines whether an arrangement is or includes an embedded lease at contract inception. Lease expense is recognized on a straight-line basis over the lease term.

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.

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The carrying values of cash, accounts payable, and accrued liabilities approximate fair value. Pursuant to ASC 820 and 825, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The ~~recorded~~fair values of ~~all other financial instruments approximate their current fair values because of their nature~~warrant liabilities and ~~respective maturity dates or durations.~~derivative liabilities embedded in convertible notes are determined by level 3 inputs.

The Company accounts for derivative instruments in accordance with ASC Topic 815, “Derivatives and Hedging” (ASC 815) and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet.

The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for the Company's liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, the Company seeks to validate the model's output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. Changes in fair value are recognized in the period incurred as either gains or losses.

Warrants are classified as equity and the proceeds from issuing warrants in conjunction with convertible notes are allocated based on the relative fair values of the base instrument of convertible notes and the warrants by following the guidance of ASC 470-20-25-2 as below:

Proceeds from the sale of a debt instrument with stock purchase warrants (detachable call options) shall be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. This usually results in a discount (or, occasionally, a reduced premium), which shall be accounted for as interest expense under Topic 835 Interest.

The Company accounts for income taxes pursuant to FASB ASC 740 “Income Taxes”. Under ASC 740 deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. At November 30, ~~2019,~~2020, there was unrecognized tax benefits. Please see ~~Notes 12~~Note 13 for details.

The Company generates revenue in People's Republic of China (PRC) via the “Ai Bian Quan Qiu” platform and is subject to a value-added tax at an effective rate of 6%. In accordance with PRC law, the Company is also subject to surcharges, which includes urban maintenance and construction taxes and additional education fees on VAT payable.

~~For the three months ended November 30, 2019, the~~The Company’s revenue generated from the “Ai Bian Quan Qiu” platform is subject to VAT at a rate of 6% and subject to surcharges at a rate of 12% of the VAT payable. ~~The Company did not incur any VAT tax for the three months ended November 30, 2018 as the “Ai Bian Quan Qiu” platform did not start generating revenue until February, 2019.~~

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. The earnings per share after the reverse stock split is presented retrospectively as if the reverse split had occurred at the very beginning of the business. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share is computed using the weighted average number of common shares and potential common shares outstanding during the period for warrants, options and restricted shares under treasury stock method, and for convertible debts under if-convertible method, if dilutive. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the ~~period. Dilutive loss per share~~period and excludes all potential common shares if their ~~effect is~~effects are anti-dilutive.

In accordance with the Company’s convertible note agreements, the Note Holders have the option to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into common stock at a conversion price equal to a price which is 55% or 60% of the lowest trading price during the 10 or 20 days prior to the day that the Holder requests conversion. 55% is applicable to EMA Financial whereas 60% applies for the other counterparties. The lowest trading price during 10 days prior to conversion is applicable to East Capital and East Capital, whereas the other counterparties utilize the lowest trading price during the preceding 20 days. The number of diluted shares from convertible notes is calculated with the assumption of converting all the outstanding principal balance and unpaid interest expense to common shares at the beginning of the period or at the time of issuance, if later.

The number of diluted shares from warrants is the upper limit to which warrants can be converted into common shares and adjusted for anti-dilution clauses.

As of November 30, 2020, 45,230,142 potentially diluted shares were from convertible notes and 4,381.313 potentially diluted shares were from warrants. 4,381.313 diluted shares are the maximum number of common shares these warrants can be converted into. No potentially dilutive debt or equity instruments were issued or outstanding as of November 30, ~~2019 and August 31,~~ 2019.

~~The earnings per share after the reverse stock split is presented retrospectively as if the reverse split had occurred at the very beginning of the business.~~

In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018.

In September 2017, the FASB has issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer

Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

In February 2018, the FASB issued guidance to address the income tax accounting treatment of the tax effects within other comprehensive income due to the enactment of the Tax Cuts and Jobs Act (the “Act”). This guidance allows entities to elect to reclassify the tax effects of the change in the income tax rates from other comprehensive income to retained earnings. The guidance is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company has evaluated and concluded that there was no impact on its consolidated financial position and results of operations.

In March 2018, the FASB issued ASU 2018-05: “Income Taxes (Topic 740)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. The amendments in this ASU add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 – the date on which the Tax Cuts and Jobs Act was signed into law. The Company has evaluated and concluded that there was no impact on its consolidated financial position and results of operations.

In June 2018, the FASB issued ASU 2018-07: “Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting”. This ASU expands the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity—Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company does not currently expect the adoption of the amendment to have a material impact on its consolidated financial position and results of operations.

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In July 2018, the FSAB issued ASU 2018-10 ASC Topic 842: “Codification Improvements to Leases” The amendments are to address stakeholders’ questions about how to apply certain aspects of the new guidance in Accounting Standards Codification (ASC) 842, Leases. The clarifications address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The amendments in ASC Topic 842 are effective for EGC for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842). This update provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. Entities that elect this optional transition method must provide the disclosures that were previously required. The Company is evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” to improve the effectiveness of disclosures in the notes to financial statements related to recurring or nonrecurring fair value measurements by removing amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The new standard requires disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” to remove specific exceptions to the general principles in Topic 740 and to simplify accounting for income taxes. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815,” which clarifies the interaction of the accounting for equity investments under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Prepaid expense was $8,000 and $11,024 as of November 30, ~~2019 includes $4,167 prepaid consulting fees,~~2020 and August 31, 2020, respectively. Prepaid expense at November 30, 2020 primarily included $8,000 prepayment of OTC market annual ~~fee, and $608 prepaid website and domain~~ fee.

Note receivable relates to two loan agreements entered with All In One Media, previously named as Aura Blocks Limited, in August and September of 2019, respectively. The note receivable entered in August, 2019 is a one-year loan of $1,047,040 the Company lent to All In One Media Ltd at an annual interest rate of 10%. The loan principal is due on July 31, 2020. The note receivable entered in September, 2019 lent $1,049,600 at an annual interest rate of 10% to All In One Media Ltd with a term from September 4, 2019 to March 3, 2020. As of November 30, 2019 and August 31, 2019, the Note receivable balance is $2,096,640 and $1,047,040, respectively and the interest receivable balance is $34,965 and $8,725, respectively. For the three months ended November 30, 2019, the Company has generated interest income of $52,416 for these two note receivables.

Leasehold improvement relates to renovation and upgrade of an office and an offline display store. There is a total cost of $165,760 due to the construction company, including $146,752 for renovation of the office and the store and $19,008 related to office furniture and appliances the construction company purchased on behalf of the Company. As of November 30, 2019, the Company has paid $165,312 to the construction company with a remaining unpaid balance of $448 recorded in other payable. As the renovation is completed as of November 30, 2019, theThe 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 an office and an offline display store. The leasehold improvement is depreciated over 3 years which equal the terms of the operating lease for renting an office. The furniture and appliances are depreciated over 7 and 5 years, respectively.

~~Table of Contents~~

The total original cost was $172,278, including $146,304 for renovation of the office and the store and $25,974 office furniture and appliances. The accumulated depreciation was $78,673 and $65,525 at November 30, 2020 and August 31, 2020, respectively.

As of November 30, ~~2019,~~2020 and August 31, ~~2019,~~2020, the balance of intangible assets are as follows;

The two intangible assets of Krypotokiosk and Ai Bian Quan Qiu platform are both impaired to zero values because they cease in operations and do not generate revenues for the Company any more. Amortization expenses for three months ended November 30, 2020 and 2019 was $140,726 and ~~2018 was~~ $36,899, ~~and $28,600~~ respectively.

The estimated amortization expenses for each of the two succeeding years is as follows:

In September 2019, the ~~company~~Company entered into an agreement with ~~its related party Youall Perform Services~~Guangzhou Yuezhi Computer Ltd. for upgrading software of the “Ai Bian Quan Qiu” platform at a cost of $128,000. $108,800 was paid upon signing the agreement and recorded as long-term prepayment in Q1, FY2020. As COVID-19 restricted crowd-gathering, “Ai Bian Quan Qiu” platform has ~~been paid~~not generated any revenue since mid-January, 2020, the Company impaired 80% of the “Ai Bian Quan Qiu” platform intangible asset value in Q2 FY2020 and the remaining 20% intangible asset in Q4 FY2020. As such, $108,800 prepayment was expensed as research and development expense from the previously recognized long-term prepayment asset.

As of November 30, ~~2019~~2020, the long-term prepayment balance of $1,955,413 relates to three movie copyrights and ~~booked~~twenty-seven broadcast rights for movies and TV series as ~~long-term prepayment.~~below:

~~In November 2019, the company~~

	•	In November 2019, the Company acquired two movie copyrights at a price of $256,000 for “Lushang” (English name: “On The Way”) and $115,200 for “Qi Qing Kuai Che” (English name: “Confusion”). Both of them have been fully paid and recorded as long-term prepayment.

On November 18, 2019, the Company closed a private financing with EMA Financial, LLC (“EMA Financial” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $250,000, and upon issuance, the Company is expected to receive net proceeds of $228,333 after subtracting an original issue discount of $21,667 per the Note agreement. This Note carries a prorated original issue discount of up to $21,667 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale of the Note, which is included in the principal balance of this Note.

As part of initial closing the outstanding principal amount shall be $75,000 and the Holder shall pay $68,500 of the consideration (the “First Tranche”). Out of $68,500 consideration, the Company has received $64,737 cash from EMA Financial with the remaining $3,763 spent as legal expense for note issuance and due diligence fees.

The term of ~~the~~this convertible note is 9 months with the maturity date on August 18, 2020. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 24.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 55.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading Days on which at least 100 shares of common stock were traded including and immediately preceding the Conversion Date.

In connection with the issuance of the Note, the Company granted EMA Financial a five-year cashless warrant (the “Warrant”) to purchase 30,000 shares of common stock at an exercise price of $12.5 per share. As of November 30, 2020, EMA Financial exercised 100% of the total warrant shares to acquire 45,851,221 common shares through cashless exercises.

On December 13, 2019, the Company entered into a Securities Purchase Agreement with Peak One Opportunity Fund, L.P., a Delaware limited partnership (“Peak One” or the “Holder”), pursuant to which we issued and sold to the Peak One a convertible promissory note. The Note has an original principal amount of $235,000, and upon issuance, the Company is expected to receive net proceeds of $211,500 after subtracting an original issue discount of $23,500 per the Note agreement. This Note carries a prorated original issue discount of up to $23,500 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale of the Note, which is included in the principal balance of this Note.

As part of initial closing the outstanding principal amount shall be $85,000 and the Holder shall pay $76,500 of the consideration (the “First Tranche ”). Out of $76,500 consideration, the Company has received $65,312 cash from Peak One with the remaining $11,188 spent as legal expense for note issuance and due diligence fees. Peak One has converted all the convertible notes into 1,096,846 common shares by July 16th, 2020.

The term of this convertible note is 1 year with the maturity date on December 09, 2020. The interest rate of 10.0% per annum. The convertible note has prepayment and conversion features. The conversion price shall equal to the lesser of (a) $10.00 or (b) Sixty percent (60%) of the lowest closing bid price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion of the Debentures (provided, further, that if either the Company is not DWAC Operational at the time of conversion or the Conversion Price is less than $0.01 per share, then Sixty percent (60%) shall automatically adjust to Fifty percent (50%) of the lowest closing bid price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of conversion of the Debenture), subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events.

In connection with the issuance of the Note, the Company granted Peak One a five-year cashless warrant (the “Warrant”) to purchase 10,000 shares of common stock at an exercise price of $10 per share. As of November 30, 2020, Peak One exercised 100% of the total warrant shares to acquire 3,720,326 common shares through cashless exercises.

On January 8, 2020, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC., a New York limited company (“Crown Bridge”), pursuant to which the Company issued and sold to Crown a convertible promissory note, dated January 8, 2020, in the principal amount of $121,500. Upon issuance, the Company is expected to receive net proceeds of $109,500 after subtracting an original issue discount of $12,000 per the Note agreement. This Note carries a prorated original issue discount of up to $12,000 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale of the Note, which is included in the principal balance of this Note.

As part of initial first tranche closing on January 8th, 2020 the outstanding principal amount shall be $40,500 and the Holder shall pay $36,500 of the consideration (the “First Tranche”). Out of $36,500 consideration, the Company has received $34,992 cash from Crown Bridge with the remaining $1,508 spent as legal expense for note issuance and due diligence fees.

As part of the second tranche closing on July 23rd, 2020 the outstanding principal amount shall be $50,000 and the Holder shall pay $47,500 of the consideration (the “Second Tranche”). Out of $47,500 consideration, the Company has received $42,987 cash from Crown Bridge with the remaining $ 4,513 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 1 year with the maturity date on January 8, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal lesser (i) fifteen percent (15%) per annum or (ii) the maximum amount permitted by law from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The Conversion Price shall be the lesser of (i) the lowest closing price of the Common Stock during the previous twenty (20) Trading Day period ending on the latest complete Trading Day prior to the date of this Note or (ii) the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events) (also subject to adjustment as further described herein). The "Variable Conversion Price" shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of 40%). “Market Price” means the lowest one (1) Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the lesser of the (i) lowest traded price and (ii) lowest closing bid price on the Over-the-Counter Pink Marketplace, OTCQB, or applicable trading market (the “Principal Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the Principal Market is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets.

In connection with the issuance of each tranche of the Note, the Company granted Crown Bridge a five-year cashless warrant (the “Warrant”) to purchase 4,680 shares of common stock at an exercise price of $12.5 per share.

On December 31, 2019, the Company closed a private financing with Auctus Capital Partners, LLC, (“Auctus” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $75,000 with no original discount upon issuance.

As part of initial closing the outstanding principal amount shall be $75,000 and the Holder shall pay $75,000 of the consideration (the “First Tranche”). Out of $75,000 consideration, the Company has received $59,342 cash from Auctus with the remaining $15,658 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 9 months with the maturity date on September 30, 2020. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal the lesser of (i) twenty-four percent (24%) per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price is the lesser of: (i) the lowest closing price of the Common Stock during the previous twenty (20) Trading Day period ending on the latest complete Trading Day prior to the date of this Note, and (ii) the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of 40%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Days on which at least 100 shares of Common Stock were traded including and immediately preceding the Conversion Date. “Trading Price” means, for any security as of any date, the lowest trade price on the OTC Pink, OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the OTC Pink is not the principal trading market for such security, the trading price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.

On February 13, 2020, the Company closed a private financing with East Capital Investment Corporation (“East Capital” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $50,000 with no original discount upon issuance.

As part of initial closing the outstanding principal amount shall be $50,000 and the Holder shall pay $50,000 of the consideration (the “First Tranche”). Out of $50,000 consideration, the Company has received $43,492 cash from EMA Financial with the remaining $6,508 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 1 year with the maturity date on February 13,2021. The interest rate of 10.0% per annum. The convertible note has prepayment and conversion features. The conversion price shall equal to a price which is a 40% discount to the lowest trading price in the ten (10) days prior to the day that the Holder requests conversion, unless otherwise modified by mutual agreement between the Parties.

On February 19, 2020, the Company closed a private financing with Fidelis Capital, LLC, (“Fidelis” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $50,000 with no original discount upon issuance.

As part of initial closing the outstanding principal amount shall be $50,000 and the Holder shall pay $50,000 of the consideration (the “First Tranche”). Out of $50,000 consideration, the Company has received $43,487 cash from Fidelis with the remaining $6,513 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 1 year with the maturity date on February 19, 2021. The interest rate of 10.0% per annum. The convertible note has prepayment and conversion features. The conversion price shall equal to a price which is a 40% discount to the lowest trading price in the ten (10) days prior to the day that the Holder requests conversion, unless otherwise modified by mutual agreement between the Parties.

On March 12, 2020, the Company closed a private financing with Armada Capital Partners, LLC, (“Armada” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $38,500 and an original issue discount of $3,500 per the Note agreement.

As part of initial closing the outstanding principal amount shall be $38,500 and the Holder shall pay $35,000 of the consideration (the “First Tranche”). Out of $35,000 consideration, the Company has received $32,992 cash from Fidelis with the remaining $2,008 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 1 year with the maturity date on March 12, 2021. The interest rate of 10.0% per annum. The convertible note has prepayment and conversion features. The conversion price shall equal to a price which is a 40% discount to the lowest trading price in the ten (10) days prior to the day that the Holder requests conversion, unless otherwise modified by mutual agreement between the Parties. In connection with the issuance of the Armada Note, the Company granted Armada a five-year cashless warrant (the “Warrant”) to purchase 4,200 shares of the Company’s common stock at an exercise price of $12.50 per share.

On July 17, 2020, the Company closed a private financing with EMA Financial, LLC (“EMA Financial” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $50,000, and upon issuance, carries a prorated original issue discount of up to $2,500 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale of the Note, which is included in the principal balance of this Note.

As part of initial closing the outstanding principal amount shall be $50,000 and the Holder shall pay $47,500 of the consideration. Out of $47,500 consideration, the Company has received $42,987 cash from EMA Financial with the remaining $4,513 spent as legal expense for note issuance and due diligence fees.

The term of the convertible note is 1 year with the maturity date on July 17, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 24.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date.

On July 24, 2020, the Company closed a private financing with Power Up Lending Group Ltd., (“Power up” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $130,000 with no original discount upon issuance.

As part of initial closing the outstanding principal amount shall be $130,000 and the Holder shall pay $130,000 of the consideration (the “First Tranche”). Out of $130,000 consideration, the Company has received $116,079 cash from EMA Financial with the remaining $13,921 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is 1 year with the maturity date on July 24, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 22.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date.

On August 18, 2020, the Company closed another private financing with Power Up Lending Group Ltd., (“Power up” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $63,000 with no original discount upon issuance.

As part of closing the outstanding principal amount shall be $63,000 and the Holder shall pay $63,000 of the consideration (the “Second Tranche”). Out of $63,000 consideration, the Company has received $54,939 cash from EMA Financial with the remaining $8,061 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is one year with the maturity date on August 18, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 22.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date .

On September 1, 2020, the Company closed another private financing with Jefferson Street Capital LLC, (“Jefferson Street Capital” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $82,500 with $7,500 discount upon issuance.

As part of closing the outstanding principal amount shall be $82,500 and the Holder shall pay $75,000 of the consideration. Out of $75,000 consideration, the Company has received $68,949 cash from Jefferson Street Capital with the remaining $6,051 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is one year with the maturity date on September 1, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 22.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date

On September 1, 2020, the Company closed another private financing with FirstFire Global Opportunities Fund, LLC, (“FirstFire Global” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $75,000 with $3,750 discount upon issuance.

As part of closing the outstanding principal amount shall be $75,000 and the Holder shall pay $71,250 of the consideration. Out of $71,250 consideration, the Company has received $61,498 cash from FirstFire Global with the remaining $9,752 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is nine months with the maturity date on June 1, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 24.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date

On October 8, 2020, the Company closed another private financing with Power Up Lending Group Ltd., (“Power up” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $55,000 with no original discount upon issuance.

As part of closing the outstanding principal amount shall be $55,000 and the Holder shall pay $55,000 of the consideration. Out of $55,000 consideration, the Company has received $47,579 cash from Power up with the remaining $7,421 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is one year with the maturity date on October 8, 2021. The interest rate of 10.0% per annum. Upon an event of default, the interest rate will be equal to the 22.0% per annum from the due date thereof until the same is paid. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date.

On October 9, 2020, the Company closed another private financing with East Capital Investment Corp., (“East Capital” or the “Holder”) by issuing a convertible note (the “Note”). The Note has an original principal amount of $62,700 with no original discount upon issuance.

As part of closing the outstanding principal amount shall be $62,700 and the Holder shall pay $62,700 of the consideration. Out of $62,700 consideration, the Company has received $54,992 cash from Power up with the remaining $7,708 spent as legal expense for note issuance and due diligence fees.

The term of this convertible note is one year with the maturity date on October 9, 2021. The interest rate of 10.0% per annum. The convertible note has prepayment and conversion features. The conversion price shall equal the lower of: (i) the lowest closing price during the preceding 20 trading day period ending on the latest complete trading day prior to the Issue Date of this Note (the “Closing Price”) or (ii) 60.0% of the lowest traded price for the common stock on the principal market during the 20 consecutive trading immediately preceding the Conversion Date.

The below table summarizes all the convertible notes issued during the year ended August 31, 2020.

The below table summarizes all the convertible notes issued during the three months ended November 30, 2020.

The following table summarizes the convertible note and derivative liability in the balance sheet at November 30, ~~2019:~~2020:

The Company valued its derivatives liability using Monte Carlo simulation. Assumptions used ~~during the three months ended~~as of November 30, ~~2019~~2020 include (1) risk-free interest rates of ~~1.62%~~0.08% - 0.10%, (2) expected equity volatility of ~~72.4%~~68.6% - 88.6%, (3) zero dividends, (4) ~~remaining term 0.72 years, (5)~~ discount for lack of marketability of ~~35% (6)~~30% (5) remaining terms and conversion prices as set forth in the convertible note agreement, and ~~(7)~~(6) the common stock price of the underlying share on the valuation ~~dates.~~date of November 30, 2020.

The Company recognizes ~~day one~~ loss due to convertible feature of ~~$18,084~~$163,372 in the income statement for the three months ended November 30, ~~2019.~~2020.

The Holders converted convertible notes to common shares throughout Q1 of FY2021 as below:

*On September 29, 2020, $6,007 of the Auctus Capital convertible note was converted to 17,107 shares of common stock at a conversion price $ 0.0048, 60% of the lowest trading price in the 20 days prior to the conversion dates. Additional most-favored-nation (MFN) principal of $15,000 was triggered when the conversion price is lower than $0.1. The remaining Auctus Capital convertible note principle balance was $0, including $15,000 MFN principal.

~~Other payable primarily consists of $3,584 payable~~On December 9, 2019, January 8, 2020, January 17, 2020, March 12, 2020, and July 23, 2020 the Company issued warrants to EMA Financial, Peak One Opportunity, Crown Bridge, and Armada Partners in conjunction with their convertible notes (see Note 8). Classified as equity, these detachable warrants issued in a bundled transaction with convertible notes are accounted for ~~a cloud hosting service, and $448 remaining payment~~separately as additional paid-in capital for the ~~office renovation.~~portion of the proceeds allocated to them. The allocation of the sales proceeds between the base instrument of convertible notes and the warrants are allocated based on the relative fair values of the base instrument of convertible notes and the warrants following the guidance in ASC 470-20-25-2.

On July 30, 2020, the Company issued $750,000 warrant shares to Peak One Opportunity in connection with the Equity Purchase Agreement, which is the “Financing Agreement” signed on July 30, 2020 to sell to Peak One up to $10,000,000 worth of the Company’s common stock over the period ending twenty-four (24) months after the date the Registration Statement.

The fair value of the stock warrants granted to EMA Financial was estimated at $106,540 on the date granted using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $12 per share, average risk-free interest rate of 0.89%, expected dividend yield of zero, remaining contractual life of 4.89 years, and an average expected volatility of 58.11%.

The fair value of the stock warrants granted to Peak One was estimated at $39,515 on the date granted using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $10 per share, average risk-free interest rate of 0.89%, expected dividend yield of zero, remaining contractual life of 4.78 years, and an average expected volatility of 57.51%.

The fair value of the stock warrants granted to Crown Bridge (Tranche I) was estimated at $17,443 on the date granted using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $12.5 per share, average risk-free interest rate of 0.89%, expected dividend yield of zero, remaining contractual life of 4.86, and an average expected volatility of 57.97%.

The fair value of the stock warrants granted to Armada was estimated at $12,341 on the date granted using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $12.5 per share, average risk-free interest rate of 0.29%, expected dividend yield of zero, remaining contractual life of 4.78, and an average expected volatility of 61.54%.

The fair value of the stock warrants granted to Crown Bridge (Tranche II), issued on July 23, 2020 was estimated at $126,112 on August 31, 2020 using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $0.00905 per share, average risk-free interest rate of 0.28%, expected dividend yield of zero, remaining contractual life of 4.90, and an average expected volatility of 55.33%.

The fair value of the stock warrants granted to Peak One, a standalone warrant issued on July 30, 2020 was estimated at $45,722 on August 31, 2020 using the Black-Scholes pricing model, with the following assumption used for the valuation: exercise price of $0.1 per share, average risk-free interest rate of 0.27%, expected dividend yield of zero, remaining contractual life of 4.92, and an average expected volatility of 55.29%.

The Company exercised the following warrant shares to acquire common shares via cashless exercises throughout Q4 of FY2020 and Q1 FY 2021 as below:

If the Market Price of one share of Common Stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event the Company shall issue to Holder a number of Common Stock computed using the formula of X = Y (A-B)/A, where X, Y, A, B are as below.

The exercise prices for all the warrants are subject to anti-dilution adjustments. If the Company issues common stocks under a purchase agreement, issue options, or convert notes to common stocks at a lower price than the warrant exercise prices while the warrants are still outstanding, such lower price is the base price that the warrant exercise price can be reduced to. As such, the Holder will receive additional warrant shares to keep the same warrant value as the original issuance before the exercise price is adjusted down.

A summary of the status of the Company’s warrants as of November 30, 2020 is presented below. The number of shares is adjusted in accordance with the anti-dilution adjustment and equals the original number of warrant shares times the original exercise prices divided by based prices. Base price is either the note conversion price or the share issuance price used by the Company while the warrants are outstanding.

The following table summarizes information about the Company’s warrants as of November 30, 2020:

(1). Exercise price is reduced to the latest base price. Base price is either the note conversion price or the share issuance price, which the Company used while the warrants were outstanding.

(2). The number of shares is adjusted in accordance with the anti-dilution clause per the warrant agreement and equals the original number of warrant shares times the original exercise prices divided by base price.

The Company applies ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement.

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Include other inputs that are directly or indirectly observable in the marketplace.
Level 3 — Unobservable inputs which are supported by little or no market activity.

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.

Derivative liabilities of conversion features in convertible notes are classified within Level 3. We estimate the fair values of these liabilities at November 30, 2020 by using Monte Carlo simulation based on the remaining contractual terms, risk-free interest rates, and expected volatility of the stock prices, etc. The assumptions used, including the market value of stock prices in the future and the expected volatilities, were subjective unobservable inputs.

Liabilities measured at fair value on a recurring basis as of November 30, 2020 are summarized below:

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note. ~~During the three months ended~~As of November 30, ~~2019~~2020 and ~~2018,~~August 31, 2020, there are no such related party transactions.

The Company has entered into a patent license agreement with a related party Guangzhou Shengshituhua Film and Television Company Limited (“Licensor”). The agreement is for a term of 5 years commencing on the effective date on June 1, 2017. The Company has already paid the licensor a non-refundable, up-from payment of $500,000 and shall pay a royalty of 20% of the gross revenue realized from the sale of licensed products and sub-licensing of this patent every year. The royalty expenses during the three months ended November 30, ~~2019~~2020 and ~~2018~~2019 are $15,360 and $14,848, respectively.

In December, 2018, the Company appointed Brandy Gao as Chief Financial Officer and issued 100,000 shares as compensation. In February 2019, the Company appointed Linqing Yeas Chief Operational Officer and Lijun Yu as Chief Marketing Officer, and issued 10,000,000 shares to each of them as compensation. During the three month ended November 30, 2019, $42,623 was paid to six executives in the form of stock-based compensation and $3,750 cash salary was paid to the Chief Financial Officer.

~~As of November 30, 2019, the company has $22,115 related party receivable from~~ Youall Perform Services Ltd, owned by the Company’s Board of Director Jianli ~~Deng. Youall Perform Services Ltd collected~~Deng, has been collecting revenue on behalf of the Company from the performance matching platform ~~(Ai~~“Ai Bian Quan ~~Qiu)~~Qiu”. As of November 30, 2020, the Company has $1,439 related party receivable from Youall Perform Services Ltd for the revenue collected from “Ai Bian Quan Qiu” on behalf of the Company.

In September 2019, the company entered into an agreement with Youall Perform Services Ltd for two transactions. 1) The Company pays Youall Perform Services Ltd. 10% of the revenue generated from the “Ai Bian Quan Qiu” platform every month to reimburse the valued-added tax, tax surcharges, and foreign transaction fee Youall Perform Services Ltd. has been paying on behalf of the Company. 2) Youall Perform Services Ltd. will provide IT consulting service for “Ai Bian Quan Qiu” platform upgrade and maintenance at a total cost of $128,000, out of which $108,800 has been ~~paid as of November 30, 2019. 2) The Company will pay Youall Perform Services Ltd. 10% of the~~paid. As there has been no revenue ~~generated~~ from ~~the~~ “Ai Bian Quan Qiu” ~~platform every~~due to COVID-19 since mid-January, 2020, $108,800 long-term prepayment was expensed as research and development expense in FY2020. In July 2020, the Company changed the service scope of this agreement and turned it into a website maintenance contract over the next two years. The major website of this Company is ABQQ.tv for video streaming. The contract amount remains to be $128,000, out of which $108,800 was previously paid and $19,200 will be due on the twenty first month ~~to reimburse~~after the ~~valued-added tax and tax surcharge and foreign transaction fee Youall Perform Services Ltd. has been paying on behalf~~contract related signing date of ~~the Company.~~July 31, 2020.

The Company rented an office from Zestv Studios Ltd., owned by the Chief Executive Officer Chiyuan Deng, and incurred a total related party payable of $5,504 as there is a one-month lag in payment of the office rent.

On August 29, 2020, the Company entered into a Separation Agreement and Release with each of Jianli Deng, Lijun Yu and Linqing Ye. Pursuant to the agreements, Mr. Deng resigned as Secretary and Treasurer, Ms. Yu resigned as Chief Marketing Officer and Mr. Ye resigned as Chief Operating Officer. Mr. Deng will remain on as a member of our board of directors. The Separation and Release Agreement cancelled the employment agreements for each of Messrs. Deng, Yu and Ye, and provided them each an indebtedness payment within five (5) business days of the agreements. Mr. Deng will receive $110,000 USD, Ms. Yu will receive $110,000 USD and Mr. Ye will receive $120,000 USD. We received a release of all claims from these prior officers. In addition, Mr. Deng, Ms. Yu, and Mr. Deng agreed to return to the Company their unvested restricted shares of 130,556, 147,222, and 147,222, respectively.

On September 11, 2020, we entered into an amended employment agreement with Chiyuan Deng, our Chief Executive Officer. Pursuant the amended agreement, we amended the compensation to Mr. Deng to include a salary of $180,000 annually, a reduction in common stock received under his initial employment agreement, a potential for a bonus in cash or shares, and the issuance of 100,000 shares of our newly created Series A Preferred Stock at par value $0.001.

During the three months ended November 30, 2020, $45,000 was paid to Chief Executive Officer and $ 6,250 was paid to Chief Financial Officer. During the years ended August 31, 2020, $169,768 was paid to five executives in the form of stock-based compensation and $15,000 cash salary was paid to the Chief Financial Officer.

The Company has 124,346,838 and 46,661,417 shares issued and outstanding as of November 30, 2020 and August 31, 2020, respectively. These common shares were held by approximately 522 and 520 shareholders of record at November 30, 2020 and August 31, 2020, respectively. The Company has 100,000 and 0 series A preferred shares issued and outstanding as of November 30, 2020 and August 31, 2020, respectively.

The Company has the following equity activities during the year ended August 31, 2020:

Effective as of June 6, 2018, AB International Group Corporation amended its Articles of Incorporation to increase its authorized common stock to One Billion (1,000,000,000) shares, par value $0.001 per share.

The Company ~~issued~~has the following ~~common shares during year ended August 31, 2019:~~

~~There are no common shares issued~~equity activities during the three months ended November 30, 2019. The Company has 4,822,016 issued and outstanding shares of common stock as of November 30, 2019 and August 31, 2019. These common shares were held by approximately 513 shareholders of record at November 30, 2019 and August 31, 2019.2020:

~~Table~~	•	261,111 shares of ~~Contents~~common stock returned to the Company due to officer resignations.
	•	The Company issued 5,470,000 shares of put shares for cash at $0.015312 or $0.014256 per share.

Warrant shares

The Company canceled 13,920 warrant shares with Crown Bridge and Armanda Partners. .

Peak One Opportunities exercised the remaining 10% of the 10,000 warrant shares issued on December 9, 2019 and 17% of the 750,000 warrant shares issued on July 30, 2020.

EMA Financial exercised all 30,000 warrant shares issued on January 17, 2020. .

Preferred shares

The Company authorized 10,000,000 shares of preferred shares and issued 100,000 shares of Series A Preferred shares at par value $0.001 during the three months ended November 30, 2020.

NOTE ~~12 –~~13– INCOME TAXES

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has completed the accounting for the effects of the Act. The Company’s financial statements for the year ended August 31, 2019 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 35% to 21% as well as other changes.

Components of net deferred tax assets, including a valuation allowance, are as follows as of November 30, ~~2019~~2020 and August 31, ~~2019:~~2020:

	November 30, 2019			August 31, 2019		November 30, 2020			August 31, 2020
Deferred tax asset attributable to:
Net operating loss carry over	$	203,848		$	201,056	$	514,936		$	447,765
Less: valuation allowance		(203,848	)		(201,056)		(514,936	)		(447,765)
Net deferred tax asset	$	—		$	—	$	—		$	—

The valuation allowance for deferred tax assets was ~~$203,848~~$514,936 as of November 30, ~~2019~~2020 and ~~$201,056~~$447,765 as of ~~August 31,~~November 30, 2019. In assessing the recovery of the deferred tax assets, management considers 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 is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of November 30, ~~2019~~2020 and August 31, ~~2019.~~2020.

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Reconciliation between the statutory rate and the effective tax rate is as follows for the three months ended November 30, ~~2019~~2020 and ~~2018:~~November 30, 2019:

Three months ended
November 30,
2019 2018
Federal statutory tax rate 21 % 21%
Change in valuation allowance (21 %) (21%)
Effective tax rate 0 % 0%

	Three months ended
	November 30,
	2020			2019
Federal statutory tax rate		21	%		21%
Change in valuation allowance		(21	%)		(21%)
Effective tax rate		0	%		0%

The Company’s fully owned subsidiary App Board Limited registered and located in Hong Kong. It is governed by the income tax law of the Hong Kong and is subject to a tax rate of 16.5%.

During the three months ended November 30, ~~2019~~2020 and ~~2018,~~November 30, 2019, the Company and its subsidiary have incurred a loss of ~~($63,354)~~(525,454) and ($~~228,554)~~63,354), respectively. As a result, the Company and its subsidiary did not incur any income tax during the three months ended November 30, ~~2019~~2020 and ~~2018.~~November 30, 2019.

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NOTE 1314 – CONCENTRATION RISK

~~49%~~100% and ~~100%~~49% of revenue was generated from one customer during the three months ended November 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

100% of the account ~~receivables~~receivable balance was due from one customer as of November 30, ~~2019~~2020 and ~~November 30, 2018.~~August 31, 2020.

NOTE 1415 – COMMITMENTS AND CONTINGENCIES

Operating lease

The Company leases office premises ~~and~~in Hong Kong, a display store in Hong Kong and another office in New York city under non-cancelable operating lease agreements with an option to renew the lease. The ~~rental~~Company closed down the display store due to the COVID-19 impact and uncertainties of the economy in Hong Kong. The lease agreement for the display store, which has the original term of February 23, 2019 to February 22, 2022, was terminated on November 22, 2020. The cash lease expense for the three months ended November 30, 2020 and 2019 was $26,681 and ~~2018 was~~ $20,045, ~~and $0~~ respectively. All leases are on a fixed payment basis. None of the leases include contingent rentals. The Company had lease commitment of ~~$229,120~~$108,868 as of ~~August 31, 2019,~~November 30, 2020, of which ~~$87,245~~$81,348 was within one year.

~~Future~~In accordance with ASC 250-10-45-14, the adoption of ASC 842 lease ~~commitments~~accounting standard has resulted in $27,871 lease expenses for the three months ended November 30, 2020.

As of November 30,	Commitments
2021	$	81,348
2022	$	27,520
Total Lease Payments	$	108,868
Less: imputed interest	$	(2,500	)
Present value of lease liabilities	$	106,368
Current portion of obligations under operating leases	$	79,075
Obligations under operating leases, non-current	$	27,293

FY 2020 $ 87,245
FY 2021 $ 87,245
FY 2022 $ 54,630
Total $ 229,120

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NOTE 1516 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to ~~August 31, 2019~~November 30, 2020 to the date these financial statements were issued.

OnCovid-19 impact:

In December ~~13,~~ 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in the U.S. and international markets. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. It is too early to quantify the impact this situation will have on company revenue and profits at this time. Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, unavailability of supplies used in operations, etc. Accordingly, Management is evaluating the Company’s liquidity position, reduction in revenues, and reviewing the analysis of the Company’s financial performance as the Company ~~entered into a Securities Purchase Agreement with Peak One Opportunity Fund, L.P., a Delaware limited partnership (“Peak One”), pursuant~~seeks to ~~which we issued and sold~~withstand the uncertainty related to the ~~Peak One a convertible promissory note, dated December 9 2019 in~~coronavirus. As no large-crowd gathering has been allowed since the ~~principal amount~~outbreak of ~~$85,000 (the “Note”). On December 18, 2019,~~COVID-19, the Company ~~received $65,312 less fees and commissions. In connection with~~has not generated any revenue from the ~~issuance~~Ai Bian Quan Qiu performance matching platform. Consequently, the Company has decided to impair all of the ~~Note,~~intangible asset carrying value related to the ~~Company granted Peak One a five-year cashless warrant (the “Warrant”) to purchase 10,000 shares of common stock at an exercise price of $10 per share.~~Ai Bian Quan Qiu performance matching platform and its Wechat official account, given that it is uncertain whether this platform will continue generating any revenue.

Subsequent payment for terminated warrants:

On December ~~19, 2019,~~1, 2020, AB International paid Crown Bridge $75,000 to cancel the ~~Company paid off the balance of $51,200 to All In One Media Limited~~9,720 warrants with Crown Bridge Partners LLC (“Crown Bridge”).

Video streaming website launch:

The video streaming website www. ABQQ.tv is officially launched on December 29, 2020. The website will generate revenue from subscriptions and advertisements,

Prepayments for ~~acquiring the movie copyright of “Qi Qing Kuai Che”.~~convertible notes:

On January 2, 2020, the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC (“Auctus”) pursuant to which the Company issued and sold to the Auctus a convertible promissory note, dated December ~~31, 2019, in the principal amount of $75,000. The Company received $59,250 less fees and commissions.~~

~~On January~~ 9, 2020, the Company ~~entered into~~prepaid two convertible promissory notes held by accredited investors, including a ~~Securities Purchase Agreement~~January 8, 2020 convertible note with Crown Bridge Partners ~~LLC.,~~LLC (“Crown Bridge”) for a ~~New York limited company (“Crown”), pursuant to which the Company issued and sold to Crown a convertible promissory note, dated January 8, 2020, in the~~total principal amount of ~~$121,500. The Company received $35,000 as~~$121,500 and a July 17, 2020 convertible note with EMA Financial for a total principal amount of $50,000. Crown Bridge had already converted the initial first tranche ~~less fees~~principal tranche of $40,500 into common shares and ~~commissions.~~the Company prepaid $72,500 to pay off the remaining second tranche principal balance of $40,500 plus accrued but unpaid interest. For the EMA Financial convertible note, the Company prepaid $72,800 for all the principal of $50,000 plus accrued but unpaid interest.

The prepayments allowed the Company to remove and return to treasury 313,659,990 shares of our common stock that were previously under reserve with our transfer agent for note conversions.

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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” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. 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. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. 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.

Overview

AB International Group Corp. (the "Company", "we" or "us") was incorporated under the laws of the State of Nevada on July 29, 2013 ~~("Inception")~~ and originally intended to purchase used cars in the United States and sell them in Krygyzstan. The Company's fiscal year end is August 31.

~~On January 22, 2016, our former sole officer, who owned 83%~~We are an intellectual property (IP) and movie investment and licensing firm, focused on acquisitions and development of ~~our outstanding common shares, sold all~~various intellectual property. We are engaged to acquisition and distribution of ~~his common shares~~movies. We have a Patent License to ~~unrelated investor Jianli Deng. After~~a video synthesis and release system for mobile communications equipment, in which the ~~stock sale, we modified our~~technology is the subject of a utility model patent in the People's Republic of China. We had launched a business application (Ai Bian Quan Qiu) through smartphones and official social media accounts based on WeChat platform in February 2019, utilizing Artificial Intelligence, it is a matching platform for performers, advertiser merchants, and owners for more efficient services. We generate revenues through an agency service fee from each matched performance. Due to ~~focus~~the quarantine and continuous control imposed by the state and local governments in areas affected by COVID-19, merchant advertising events have been suspended for 7 months. The Company decided to shut down the Ai Bian Quan Qiu platform, which has created an adverse impact on the ~~creation of a mobile app marketing engine. The app was designed for movie trailer promotions~~business and ~~we planned~~financial condition and hampered its ability to generate ~~a subscriber base~~revenue and access sources of smartphone users primarily through pre-installed app smartphone makers, online app stores, WeChat official accounts, Weibo and other social network media outlets and sell prepaid cards or coins to movie distributors or other video advertisers in China. We created the app “Amoney” for the Android smartphone platform to develop a WeChat micro-shop that was designed to display and deliver a variety of information and links for download or online watch prices in the China market.liquidity on reasonable terms.

On June 1, 2017, we entered into a Patent License Agreement (the “Agreement”) pursuant to which Guangzhou Shengshituhua Film and Television Company Limited, a company incorporated in China (“Licensor”), granted to us a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”). The Technology is the subject of a utility ~~model~~ patent in the People’s Republic of China. Under the Agreement, we are able to utilize, improve upon, and sub-license the technology for an initial period of ~~5 years,~~one year from October 1, 2017 to September 30, 2018, subject to a right to ~~renew for an additional 5 year term.~~renew. We were obligated to pay the Licensor $500,000 within 30 days of the date of the Agreement and a royalty fee in the amount of 20% of any proceeds resulting from our utilization of the Technology, whether in the form of sub-licensing fees or sales of licensed products. Our Chief Executive Officer, Chiyuan Deng and former Chief Executive Officer, Jianli Deng, jointly own and control Licensor. On October 10, 2017, we completed the payment of ~~all amounts~~$500,000 initial payment amount due under the Agreement. In October of 2019, the term of this sublicensing agreement was renewed and extended until December 31, 2021.

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On April 22, 2020, the Company has announced the first phase development of a video streaming service. The online service will be marketed and distributed in the world under the brand name ABQQ.tv. ABQQ.tv is expected to generate a new and profitable revenue stream derived from its hybrid subscription and advertising business model. We launched the video streaming service at the end of 2020 and the service now feature Chinese movies, television shows and drama series with unique content and exclusive to the company. We expect to have a channel called “ABQQTV” running on the YouTube platform in near future and Netflix as well.

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Covid-19

The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict at the present time. In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities. We anticipate that these actions and the global health crisis caused by COVID-19 will negatively impact business activity across the globe. The movie industry in general has changed dramatically as a result of the pandemic restrictions. While movie theaters struggle to stay alive, online streaming programming has increased. We have endeavored to stay with the trend for streaming services to remain competitive. We have experienced the negative impact in our results of operations and in our financial condition for the year ended August, 2020, especially with respect to the movie distribution end of our business. These impacts concern delays in delivering our movies and IP because of health restrictions imposed on certain public events that concern our business, including, among other things, theaters, indoor and outdoor performances, filming restrictions, music festivals, concerts and other such events, Some of these restrictions include pandemic government mandated shutdowns and others restrictions on capacity gathered at these events, with some jurisdictions imposing fines or revocation of business licensing, and other restrictions. As a result of these factors, our revenue was reduced from March to May of 2020. With immediate closures, the resultant industry and business specific delays have negatively affected our company.

We ~~are~~plan to focus on the video streaming and other web based applications and expand our business into those areas that we believe we situate the company for continued and increased revenues. As the pandemic is forecasted to worsen in the ~~process of using~~United States and other areas around the ~~underlying Technology to create a smartphone video mix app~~globe, we believe that the demand for our IP, online products and ~~social video sharing platform. We are developing this new apps for use with iOS and Android smartphones and~~services offerings increases. While we ~~expect to launch~~cannot guarantee that the ~~app sometime in the beginning of next year. We expect that this new app will transform the way users create and share art talent and fun. The app is expected to take advantage~~negative effects of the ~~core design philosophy of “My film anyone, anywhere, anytime be together.” Similar~~pandemic will not interfere with our ability to generate revenues, we intend to strengthen our position in this dynamic market and ~~competitive innovative video and community apps have been activated on over 2 million unique devices in China as of December 31, 2017 and precipitated~~position the ~~duet video synthesis phenomenon in China. Today, the word “Meitu” is used as a verb for “enhancing images”, amd TikTok is a short video sharing platform. Our Videomix app, yet~~company to ~~be released, is expected to be used as a verb for “enhancing videos synthesis production,” but also as a brand that represents talent, trendiness, youthfulness and funniness.~~best suit its shareholders.

~~To better meet~~Specific to our ~~users’ demands for higher quality selfies,~~company operations, during the pandemic period, we ~~are also planning~~have enacted precautionary measures to ~~launch~~protect the ~~Patent (Mobile communication equipment video synthesis production~~health and ~~distribution system) License Program. The program markets~~safety of our ~~Technology~~employees and partners. These measures include closing our office, having employees work from home, and eliminating all travel. While having employees work from home may have a negative impact on efficiency and may result in negligible increases in costs, it does have an impact on our ability to ~~big brand smartphones makers~~execute on our agreements to highlight our patent apps integrate proprietary video synthesis production and distribution system processing algorithms and specialized video processors, which generate high-quality selfies duet video synthesis. We have been in discussion with these smartphone makers about our initiatives and selling points in an effort to increase sales. Revenue from this program will be generated by license fees for each smartphone with this video synthesis production and distribution system function.

~~Fundamentally, we view ourselves as a mobile Internet company with~~deliver our core ~~asset being our massive, active and fast-growing user base through registered patent--Mobile communication equipment video synthesis production and distribution system.~~products.

We ~~believe that the VideoMix app~~ will become an important part of users’ social lives online. We believe the provision of relevant products, content and services will help us monetize our user base and enable us to create value for our users at the same time. We intend to continue to ~~drive~~actively monitor the situation and may take further actions that alter our ~~near-term~~business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, partners, or vendors, or on our financial results.

Results of Operations

Revenues

Our total revenue ~~growth through patent--Mobile communication equipment video synthesis production~~reported for the three months ended November 30, 2020 was $76,800, compared with $156,405 for the three months ended November 30, 2019.

100% and ~~distribution system license fees from smartphone makers, since China’s large smartphone market continues to present significant opportunities. Our goal is that at least 10%~~49% of smartphones in China will eventually contain this integrated patent function. If we meet this goal, which would equate to around 40 million smartphones, which in turn result in about 200 million RMB in revenue was generated from patent license fees. As we have not yet commercialized the app for sale, we do not expect to achieve any revenues until we launch the app and make it available under our program, and we can provide no assurances that we will be able to achieve commercialization or our revenue goals for the app. According to preliminary data of the IDC Quarterly Mobile Phone Tracker, the Chinese smartphone market shipped 105 million unitsone customer during the ~~second quarter of 2018. Following our successful monetization through smartphones, we have also identified~~ three ~~other major opportunities for monetization, including content use fees, advertising fees, KOL agency fees.~~

On March 10, 2018, we acquired intellectual property from Aura Blocks Ltd. for $200,000. On March 19, 2018, we entered into consulting agreements (the “Consulting Agreements”) with four consultants (the “Consultants”). The Consulting Agreements have terms or either two or three years. Under the Consulting Agreements the Consultants will provide services to us in Hong Kongmonths ended November 30, 2020 and ~~China related to blockchain technology and krypto kiosks. In consideration for the services provided by the Consultants, we have issued the Consultants a total of 1,100,000 shares of our common stock.~~

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cryptocurrencies price went down.. The IP, however, was never transferred to us, We have repeatedly requested from Messrs. Grounds, Vickery and Shakespare access to the domains and websites and other information concerning the IP assets. As of the date of this annual report, no such information has been provided. In addition, the IP including domain names were transferred to others while Messrs. Vickery and Shakespare were officers of our company. As a result, we ceased promotions and marketing on the ATM business and relations cryptocurrencies business in September 2018. On November 21, 2018, we had sent the final notice that JPC Fintech has materially breached the agreement. We requested that JPC Fintech Ltd. return its stock certificate received in the transaction to our transfer agent for immediate cancellation. We have not yet received the certificate for termination.

~~On or about July 31, 2018, we entered into employment agreements with Messrs. Holtermann and Wright for the consideration provided for under the agreements.~~

On September 5, 2018, the Company entered into an agreement with Aura Blocks Limited to acquire a movie copy right for $768,000 and paid $153,600 of the total balance. In December of 2018, another payment of $153,662 was made. The remaining balance to Aura Blocks Limited is $460,738. The Company has obtained the exclusive permanent broadcasting right outside the mainland China and is expected to generate revenues from showing the movie online, in theaters, and on TV outside the mainland China once this movie is completed in the end of December 2019. This movie will also be included in the video library for the Company’s VideoMix app.

On September 5, 2018, the Company entered into an agreement with Aura Blocks Limited to acquire a movie copyright for $768,000. The remaining balance to Aura Blocks Limited is $153,600 as of August 31, 2019. The Company has obtained the exclusive permanent broadcasting right outside the mainland China and is expected to generate revenues from showing the movie online, in theaters, and on TV outside the mainland China once this movie is completed in the end of December 2019. This movie will also be included in the video library for the Company’s VideoMix app.

~~In December of 2018, we started developing a performance matching platform “Ai Bian Quan Qiu” and a WeChat official account to advertise the platform.~~ The matching platform is to arrange performance events for celebrities and performers. Performers can set their schedules and quotes on the platform. The platform will maximize their profits from performance events by optimizing their schedules based upon quotes and event locations and save time from commuting among different events. “Ai Bian Quan Qiu” utilizes the artificial intelligence (AI) matching technology to instantly and accurately match performers and advertisers or merchants. The company charges agency service fees for each successful event matched through the platform.

~~Table of Contents~~

In August of 2019, the Company entered into a one-year loan agreement to lend $1,047,040 at an annual interest rate of 10% to All In One Media Ltd, previously named as Aura Blocks Limited, for producing films and digital videos in Hong Kong. The term of note receivable is from August 1, 2019 to July 31, 2020. The Company expects to have similar short term note receivables for the next few years.

On September 4, 2019, the Company entered into another loan agreement to lend $1,049,600 at an annual interest rate of 10% to All In One Media Ltd, previously named as Aura Blocks Limited. The term of note receivable is from September 4, 2019 to March 3, 2020. The Company expects to have similar short term note receivables for the next few years.

~~Results of Operations~~

~~Revenues~~

~~Our total revenue reported for the three months ended November 30, 2019 was $156,405, compared with $74,240 for the three months ended November 30, 2018. The increase~~decrease in revenue for the three months ended November 30, ~~2019~~2020 over the ~~same periods~~three months ended ~~2018~~November 30, 2019 is attributable to ~~increased revenue from sublicensing~~ the ~~VideoMix patent to Anyone Pictures Limited and~~cease in operation of the ~~new revenue stream of performance matching service fees generated from the Fan Dou He Pai Wechat Official account.~~ Ai Bian Quan Qiu platform caused by COVID 19.

We expect to ~~continue to~~ achieve ~~steadily~~ increasing revenues within the coming ~~months.~~months especially with respect to our streaming products. However, ~~as we are a start-up,~~ we have limited operating history to rely upon and in the face of a worldwide pandemic, we cannot guarantee that our business plan will be successful. Management notes that its decision to accelerate the development and launch date of its video streaming service was largely also in part to the mandatory quarantines being implemented due to the COVID-19 pandemic, which has increased viewership of video streaming services and the Internet by as much as 70% over the course of the past several weeks. We launched our streaming service at the end of 2020.

Our cost of revenues was $156,086 for the three months ended November 30, 2020, as compared with $52,046 for the three months ended November 30, ~~2019, as compared with $43,448 for the same period ended November 30, 2018.~~2019.

As a result, we had gross ~~profit~~loss of ~~$104,358~~$(79,286) for the three months ended November 30, ~~2019,~~2020, as compared with gross profit of ~~$30,792 for the same period ended November 30, 2018.~~

~~We had a gross profit margin of 67%~~$104,359 for the three months ended November 30, ~~2019, an increase from 41% over the same period ended 2018.~~ 2019.

The reason for the ~~increase~~decrease in our gross profit margin in ~~2019~~2020 over ~~2018~~2019 is attributable to the cease in operation of the Ai Bian Quan Qiu platform, which has created an adverse impact on the business and financial condition and hampered its ability to generate revenue ~~from the Wechat Official account for the Fan Dou He Pai performance matching platform that started generating revenue in February, 2019 .~~and access sources of liquidity on reasonable terms.

Operating Expenses

Operating expenses increased to ~~$202,117~~$237,496 for the three months ended November 30, ~~2019~~2020 from ~~$139,346~~$202,116 for the three months ended November 30, ~~2018.~~2019.

Our operating expenses for three months ended November 30, 2020 consisted of general and administrative expenses of $231,146 and related party salary and wages of $6,350. In contrast, our operating expenses for the three months ended November 30, 2019 consisted of general and administrative expenses of $155,743 and related party salary and wages of $46,373. ~~In contrast, our operating expenses for the same period ended November 30, 2018 consisted of~~

We experienced an increase in general and administrative expenses in 2020 over 2019, mainly as a result of ~~$72,862~~increased rent, salaries, valuation fees, consulting fees, issuance expense for convertible notes, travel and ~~related party salary and wages of $66,484. The detail by major category is reflected in the table below.~~

Three Months Ended
November 30,
2019 2018

General and Administrative Expenses 155,743 101,846

Related Party Salary and Wages 46,373 37,500

Total Operating Expense $ 202,117 $ 139,346
7
~~Table of Contents~~
~~The main reason for the increase in operating expenses is attributable to increased professional service fee, stock based compensation expense, salary, rent,~~entertainment, and depreciation ~~of leasehold improvement and fixed asset .~~
expense, etc.

We anticipate our operating expenses will increase as we undertake our plan of operations, including increased costs associated with marketing, personnel, and other general and administrative expenses, along with increased professional fees associated with SEC and COVID compliance as our business grows more complex and more expensive to maintain. On the COVID front, we expect that our online operations will increase, as we use online working systems to monitor and communicate with employees, consultants and suppliers. These and other costs for COVID expenditures will increase our operational costs in 2021 at various levels of operation.

Other Income (Expenses)

We had other expenses of $208,672 for the three months ended November 30, 2020, as compared with other income of $34,404 for the three months ended November 30, ~~2019, as compared with~~2019. Our other expenses in 2020 were mainly the result of ~~$120,000 for~~interest expense and loss from the ~~same period ended 2018.~~change in fair value. Our other income for 2019 iswas the result of interest income of $52,488 in connection with our loans to All In One Media, previously named as Aura Blocks Limited, in August and September of 2019, respectively, offset by $18,084 loss on change in fair value of derivative liability. Thefrom the note receivable entered in August, 2019 is a one-year loan of $1,280,000 the Company lent to All In One Media Ltd at an annual interest rate of 10%. The note receivable entered in September, 2019 is a loan of $1,049,600 at an annual interest rate of 10% to All In One Media Ltd with a term from September 4, 2019 to March 3, 2020. Our other expense for the three months ended November 30, 2018 is the result of the sale of intellectual property. On November 10, 2018, the Company sold the $200,000 intellectual property from All In One Media, previously named as Aura Blocks Limited for $80,000 with a realized loss of $120,000. We recorded this realized loss as other expenses in the amount of $120,000 for the three months ended November 30, 2018.receivables.

6
Table of Contents
Net (Loss) Income

We incurred a net loss in the amount of ~~$63,354~~$525,454 for the three months ended November 30, ~~2019,~~2020, as compared with a net loss of ~~$228,554~~$63,353 for the ~~same period~~three months ended November 30, ~~2018.~~2019.

Liquidity and Capital Resources

As of November 30, ~~2019,~~2020, we had ~~$3,512,216~~$1,079,751 in current assets consisting of cash, prepaid expenses, accounts receivable and related party ~~receivable, note receivable and interest receivable.~~receivables. Our total current liabilities as of November 30, ~~2019~~2020 were ~~$264,033.~~$1,039,764. As a result, we have working capital of ~~$3,248,183~~$39,987 as of November 30, ~~2019.~~2020.

Operating activities ~~provided $769,671~~used $336,973 in cash for the three months ended November 30, ~~2019,~~2020, as compared with ~~$199,500 used~~$769,672 provided in cash ~~provided~~ for the same period ended November 30, ~~2018.~~2019. Our negative operating cash flow in 2020 was mainly the result of our long-term prepayment of $ 213,333 and our net loss of $ 525,454. Our positive operating cash flow in 2019 was mainly the result of ~~our~~a $1,280,000 receivable ~~of $1,280,000~~ on asset ~~disposal in connection with our loan to All In One Media. Our negative operating cash flow in 2018 was mainly the result of our net loss of $228,554 and change in our prepaid expenses of $151,100.~~disposal.

Investing activities used ~~$1,049,600~~$1,413,000 in cash for the three months ended November 30, ~~2019,~~2020, as compared with ~~$80,000 provided~~$1,049,600 used for the ~~same period~~three months ended November 30, ~~2018.~~2019. Our negative investing cash flow for November 30, 2020 was the result of the purchase of furniture and equipment. Our negative investing cash flow for November 30, 2019 was the result of proceeds from a ~~$1,049,000~~ note receivable.
Financing activities provided $313,885 for the three months ended November 30, 2020, as compared with $0 used in financing activities for the nine months ended November 30, 2019. Our positive ~~investing~~financing cash flow for November 30, ~~2018~~2020 was the result of ~~$80,000 in the sale~~proceeds from convertible notes and sales of ~~intangible assets.~~our common stock.

~~We did~~Based upon our current financial condition, we do not have ~~any~~sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing ~~activities during the quarters ended November 30, 2019 and 2018.~~
arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Off Balance Sheet Arrangements

As of November 30, ~~2019,~~2020, there were no ~~off balance~~off-balance sheet arrangements.
Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are set forth in Note 2 to the financial statements.

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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 October 31, 2018. 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, ~~2019,~~2020, 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, ~~2019,~~2020, 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.

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, ~~2020:~~2021: (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, ~~2019~~2020 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.~~1A: Risk Factors

See Risk Factors contained in our Form 10-K filed with the SEC on ~~October 22, 2019.~~December 9, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None~~Common shares
• The Company issued 25,406,238 shares of common stock from note conversion during the three months ended November 30, 2020.
• The Company issued 47,070,294 shares of common stock from warrant exercises during the three months ended November 30, 2020
• The Company issued 5,470,000 shares of put shares for cash at $0.015312 or $0.014256 per share under an Equity Purchase Agreement during the three months ended November 30, 2020.
Preferred shares
The Company authorized 10,000,000 shares of preferred shares and issued 100,000 shares of Series A Preferred shares at par value $0.001 during the three months ended November 30, 2020.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None
Item 6. Exhibits
Exhibit Number
Description of Exhibit

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, 2020 formatted in Extensible Business Reporting Language (XBRL).
**Provided herewith
~~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, 2019 formatted in Extensible Business Reporting Language (XBRL).~~
**Provided herewith
10
9
Table of Contents

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.

AB INTERNATIONAL GROUP CORP.

By: /s/ Chiyuan Deng
~~Chief Executive Officer, Principal Executive Officer, and Director~~
~~January 14, 2020~~
~~By:~~ ~~/s/ Brandy Gao~~
~~Chief Financial Officer, Principal Financial Officer,~~
~~Principal Accounting Officer and Director~~
~~January 14, 2020~~
Chief Executive Officer, Principal Executive Officer, and Director
January 15, 2021

By: /s/ Brandy Gao
Chief Financial Officer, Principal Financial Officer,
11
Principal Accounting Officer and Director
January 15, 2021
10


[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period endedNovember 30, ~~2019~~2020

[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from __________ to__________

	Commission File Number:000-55979


Nevada	37-1740351
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

~~1st Floor, Union Industrial Building, 116 Wai Yip~~48 Wall Street, Suite 1009, ~~Kwun Tong, Kowloon, Hong Kong~~New York, NY 10005
(Address of principal executive offices)

~~(852) 2622-2891~~(212) 918-4519
(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)


[ ] Large accelerated filer	[ ] Accelerated filer
[ ] Non-accelerated filer	[X] Smaller reporting company
[X] Emerging growth company

F-1	Condensed Consolidated Balance Sheets as of November 30, ~~2019~~2020 (unaudited) and August 31, ~~2019;~~2020;
F-2	Condensed Consolidated Statements of Operations for the three months ended November 30, ~~2019~~2020 and ~~2018~~November 30, 2019 (unaudited);
F-3	Condensed Consolidated Statements of Shareholders’ Equity for the three months ended November 30, ~~2019~~2020 and ~~2018~~November 30, 2019 (unaudited);
F-4	Condensed Consolidated Statements of Cash Flows for the three months ended November 30, ~~2019~~2020 and ~~2018~~November 30, 2019 (unaudited); and
F-5	Notes to Condensed Consolidated Financial Statements (unaudited).

	November 30, 2019			August 31, 2019
		(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,284,821		$	1,564,750
Prepaid expenses		12,775			21,971
Accounts receivable		60,900			35,300
Related party receivable		22,115			34,994
Note receivable		2,096,640			1,047,040
Interest receivable		34,965			8,725
Receivable on asset disposal		—			1,280,000
Total Current Assets		3,512,216			3,992,779

Fixed assets, net		19,195			20,124
Leasehold improvement, net		122,294			134,523
Intangible assets, net		376,894			413,793
Long-term prepayment		428,800			—
Other assets		15,027			15,027
TOTAL ASSETS	$	4,474,427		$	4,576,246

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	105,083		$	116,664
Convertible note and derivative liability		86,831			—
Due to shareholder		2,037			2,037
Tax payable		66,050			64,564
Other payable		4,032			161,856
Total Current Liabilities		264,033			345,122

Stockholders’ Equity
Common stock, $0.001 par value, 1,000,000,000 shares authorized; 4,822,016 and 147,325,000 shares issued and outstanding, as of November 30, 2019 and November 30, 2018, respectively		4,822			4,822
Additional paid-in capital		6,520,980			6,520,980
Retained earnings (deficit)		(1,515,375	)		(1,452,020)
Unearned shareholders' compensation		(800,034	)		(842,657)
Total Stockholders’ Equity		4,210,394			4,231,125
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,474,427		$	4,576,246

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	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	98
Item 4:	Controls and Procedures	98
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	109
Item 1A:	Risk Factors	109
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	109
Item 3:	Defaults Upon Senior Securities	109
Item 4:	Mine Safety Disclosures	109
Item 5:	Other Information	109
Item 6:	Exhibits	109

	Common Stock															Common Stock					Preferred Stock
	Number of Shares			Amount			Additional Paid-in Capital		Accumulated Deficit			Unearned Shareholders' Compensation			Total Equity	Number of Shares			Amount		Number of Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Unearned Shareholders' Compensation			Total Equity

Balance - August 31, 2018	147,325,000		$	147,325		$	2,866,868	$	(1,047,386	)	$	(918,100	)	$	1,048,707
Common shares issued to officers for services	—			—			—		—			37,500			37,500
Common shares issued for services	(40,600,000	)		(40,600	)		—		—			30,600			(10,000)
Net loss									(228,554	)		—			(228,554)
Balance - November 30, 2018	106,725,000		$	106,725		$	2,866,868	$	(1,275,940	)	$	(850,000	)	$	847,653
Balance - August 31, 2019																4,822,016		$	4,822		—	$	—	$	6,520,980		$	(1,452,020	)	$	(842,657	)	$	4,231,125

Balance - August 31, 2019	4,822,016		$	4,822		$	6,520,980	$	(1,452,020	)	$	(842,657	)	$	4,231,125
Common shares issued to officers for services	—			—			—		—			42,623			42,623	—			—		—		—		—			—			42,623			42,623
Net loss	—			—			—		(63,354	)		—			(63,354)	—			—		—		—		—			(63,354	)		—			(63,354)
Balance - November 30, 2019	4,822,016		$	4,822		$	6,520,980	$	(1,515,375	)	$	(800,034	)	$	4,210,394	4,822,016		$	4,822		—	$	—	$	6,520,980		$	(1,515,375	)	$	(800,034	)	$	4,210,394

Balance - August 31, 2020																46,661,417		$	46,661		—	$	—	$	7,271,983		$	(2,970,881	)	$	(391,667	)	$	3,956,097

Common shares issued from note conversions																25,406,238			25,406		—		—		158,347			—			—			183,753
Common shares issued from warrant exercises																47,070,294			47,070		—		—		28,236			—			—			75,306
Common shares returned due to officer resignations																(261,111	)		(261	)	—		—		(391,405	)		—			391,667			—
Put Shares issued for cash at $0.015312 or $0.014256 per share																5,470,000			5,470		—		—		75,398			—			—			80,868
Series A Preferred Shares issued																—			—		100,000		100		—			—			—			100
Warrants termination and Exercised																—			—		—		—		(145,423	)		—			—			(145,423)
Net loss																—			—		—		—		—			(525,454	)		—			(525,454)
Balance - November 30, 2020																124,346,838		$	124,347		100,000	$	100	$	6,997,136		$	(3,496,335	)	$	—		$	3,625,248

	As of November 30,
Diluted shares not included in basic loss per share computation	2020		2019
Warrants		4,381,313		—
Convertible notes		45,230,142		—

	November 30, 2020			August 31, 2020
Appliances and furniture	$	25,974		$	20,974
Leasehold improvement		146,304			146,304
Total cost		172,278			167,278
Accumulated depreciation		(78,673	)		(65,525)
Property and equipment, net	$	93,605		$	101,753

	November 30, 2019			August 31, 2019
Patent	$	500,000		$	500,000
Intellectual property: Aura		—			—
Intellectual property: Kryptokiosk		72,000			72,000
Wechat official account		99,584			99,584
Total cost		671,584			671,584
Accumulated amortization		(294,690	)		(257,791)
Intangible asset, net	$	376,894		$	413,793

	November 30, 2020			August 31, 2020
Right-to-use gross asset	$	215,853		$	228,510
Less: accumulated amortization		(109,486	)		(102,156)
Right-to-use asset, net	$	106,367		$	126,354

Year ending November 30,		Amortization expense
	2021	$	79,075
	2022	$	27,293
	Total	$	106,368

	•	In January 2020, the Company acquired a movie copyright “Ai Bian Quan Qiu” (English name: “Love Over The World”) at a price of $870,978. As of November 30,2020, $853,333 has been paid and recorded as long-term prepayment for this movie copyright.

Counterparties	Issuance date	Maturity date	Principal Amount		Purchase Price		Discount on Note issuance		Note issuance costs		Proceeds Received (USD)
EMA Financial	November 18, 2019	August 18, 2020	$	75,000	$	68,500	$	6,500	$	18,763	$	64,737
Peak One Opportunity	December 9, 2019	December 9, 2022	$	85,000	$	76,500	$	8,500	$	11,188	$	65,312
Crown Bridge (Tranche I)	January 8, 2020	January 8, 2021	$	40,500	$	36,500	$	4,000	$	1,508	$	34,992
Auctus Fund Note	December 31, 2019	September 30, 2020	$	75,000	$	75,000	$	—	$	15,658	$	59,342
East Capital	February 13, 2020	February 13, 2021	$	50,000	$	50,000	$	—	$	6,508	$	43,492
Fidelis Capital	February 19, 2020	February 19, 2021	$	50,000	$	50,000	$	—	$	6,513	$	43,487
Armada Partners	March 12, 2020	March 12, 2021	$	38,500	$	35,000	$	3,500	$	2,008	$	32,992
EMA Financial	July 17, 2020	July 17, 2021	$	50,000	$	47,500	$	2,500	$	4,513	$	42,987
Crown Bridge (Tranche II)	July 23, 2020	July 23, 2021	$	40,500	$	36,500	$	4,000	$	2,208	$	34,292
Power Up Lending (Tranche I)	July 24, 2020	July 24, 2021	$	130,000	$	130,000	$	—	$	13,921	$	116,079
Power Up Lending (Tranche II)	August 18, 2020	August 18, 2021	$	63,000	$	63,000	$	—	$	8,061	$	54,939
			$	697,500	$	668,500	$	29,000	$	90,853	$	592,647

Counterparties	Issuance date	Maturity date	Principal Amount		Purchase Price		Discount on Note issuance		Note issuance costs		Proceeds Received (USD)
Jefferson Street Capital	September 1,2020	September 1, 2021		82,500		75,000		7,500		6,051		68,949
FirstFire Global	September 1,2020	June1, 2021		75,000		71,250		3,750		9,752		61,498
Power Up Lending	October8, 2020	October 8 , 2021		55,000		55,000				7,421		47,579
East Capital	October 9, 2020	October 9, 2021		62,700		62,700				7,708		54,992
			$	275,200	$	263,950	$	11,250	$	30,933	$	233,017

	Three Months Ended
	November 30,
	2020			2019

Revenue	$	76,800		$	156,405
Cost of revenue		(156,086	)		(52,046)
Gross profit (loss)		(79,286	)		104,359

OPERATING EXPENSES
General and administrative expenses		(231,146	)		(155,743)
Related party salary and wages		(6,350	)		(46,373)
Total Operating Expenses		(237,496	)		(202,116)

OTHER INCOME (EXPENSES)
Interest income		5			52,488
Interest expense		(81,755	)		—
Gain /(Loss) from change in fair value		(98,787	)		(18,084)
Gain/(Loss) from lease termination		(3,251	)		—
Gain/(Loss) from warrant termination		(12,343	)		—
Gain/(Loss) from warrant exercise		(12,540	)		—
Total other income (expenses)		(208,672	)		34,404

LOSS FROM OPERATIONS
Income tax provision		—			—
Net loss from operations		(525,454	)		(63,353)

NET INCOME (LOSS)	$	(525,454	)	$	(63,353)

NET INCOME (LOSS) PER SHARE: BASIC	$	(0.01	)	$	(0.01)
NET INCOME (LOSS) PER SHARE: DILUTED	$	(0.00	)	$	(0.01)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC		93,965,474			4,822,000
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: DILUTED		143,576,929			4,822,000

	Three Months Ended
	November 30,
	2019			2018

Revenue	$	156,405		$	74,240
Cost of revenue		52,046			43,448
Gross Profit		104,358			30,792

OPERATING EXPENSES
General and administrative expenses		155,743			101,846
Related party salary and wages		46,373			37,500
Total Operating Expenses		202,117			139,346

OTHER INCOME (EXPENSES)
Gain on sale of intangible assets		—			(120,000)
Interest income		52,488			—
Loss on change in fair value		(18,084	)		—
Total other income (expenses)		34,404			(120,000)

LOSS FROM CONTINUED OPERATIONS
Income Tax Provision		—			—
Net loss from continuing operations		(63,354	)		(228,554)

NET INCOME (LOSS)	$	(63,354	)	$	(228,554)

NET INCOME (LOSS) FROM CONTINUED OPERATIONS PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.11)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.11)

NET INCOME PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.11)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		4,822,000			2,134,500

		Estimated Useful Life
Furniture	5	7 years
Appliances	7	5 years

Balance, August 31, 2019	$	—
Balance, August 31, 2020			$	438,921
Principal	$	75,000	$	123,736
Discount on Note issuance	$	(6,500)	$	11,472
Accrued interest expense	$	247	$	4,562
Derivative liability	$	18,084	$	98,787
Balance, November 30, 2019	$	86,831
Balance, November 30, 2020			$	677,478

Conversion date	Beginning principal balance		Principal Amount Converted		Interest Amount Converted		MFN Principal		Total converted principals and unpaid interest		Closing Fee		Ending principal balance		Conversion Price		Converted Shares
September 1, 2020		5,285		5,284.50		5,154		—		10,439		1,000		—	$	0.00812		1,408,800
Total				5,284.50		5,154		—		10,439		1,000						1,408,800

Date of Exercise	Anti Dilution Value of Warrant Shares	Anti Dilution Base (Exercise) Price (B)	# of WTS Shares Elected for purchase (Y)	Common Shares to be issued upon exercise (X) = Y(A-B)/A
July 20, 2020	$ 100,000	$ 0.0300	250,358	250,000
July 21, 2020	92,489	$ 0.0300	250,358	250,000
July 23, 2020	84,979	$ 0.0300	250,358	250,000
July 29, 2020	77,468	$ 0.0300	250,358	250,000
August 4, 2020	69,957	$ 0.0300	250,358	250,000
August 11, 2020	62,446	$ 0.0300	500,715	500,000
August 21, 2020	47,425	$ 0.0300	500,715	500,000
August 25, 2020	32,403	$ 0.0205	500,489	500,000
August 31, 2020	22,143	$ 0.0205	500,489	500,000
September 9, 2020	11,883	$ 0.0205	470,786	470,326
Total			3,724,982	3,720,326

	Number of warrants
	Original shares issued			Anti-dilution Adjusted
Warrants as at August 31, 2020		793,920			68,163,661
Warrants granted		—			—
Exercised, forfeited or expired		(169,320	)		(63,782,348)
Outstanding at November 30,2020		624,600			4,381,313
Exercisable at November 30, 2020		624,600			4,381,313

Warrants outstanding							Warrants exercisable

		Exercise price⁽¹⁾	Anti-dilution Adjusted Number outstanding⁽²⁾	Weighted average remaining contractual life (in years)		Weighted average exercise price	Number exercisable		Weighted average exercise price

Peak One Opportunity	$	0.01426	4,381,313	4.67	$	0.01426	4,381,313	$	0.01426
Total			4,381,313	4.67	$	0.01426	4,381,313	$	0.01426

	Derivative liabilities embedded in convertible notes

Fair value at August 31, 2020	$	64,584
Increase from note issuances		74,187
Decrease from note conversions		(33,490)
Changes in the fair value		58,090
Fair value at November 30, 2020	$	163,372

	~~F-15~~•	The Company issued 25,406,238 shares of common stock from note conversion. Refer to Note 8 for further details.
	•	The Company issued 47,070,294 shares of common stock from warrant exercises. Refer to Note 9 for further details.

	Three Months Ended November 30,
	2019		2018

General and Administrative Expenses		155,743		101,846

Related Party Salary and Wages		46,373		37,500

Total Operating Expense	$	202,117	$	139,346