| NOTE 15 – SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS In accordance with ASC 855-10, the Company has analyzed
its operations subsequent to July 10, 2022 to the date these financial statements were issued. Issuance of Common Stock On June 13, 2022, the Company issued 5,672,727 common
shares for the conversion of Series C preferred stock. On June 21, 2022, the Company issued 7,090,909 common
shares for the conversion of Series C preferred stock. On June 27, 2022, the Company issued 7,428,571 common
shares for the conversion of Series C preferred stock. On July 5, 2022, the Company issued 9,069,767 common
shares for the conversion of Series C preferred stock. On July 7, 2022, the Company issued 4,724,318 common
shares for the conversion of Series C preferred stock. Issuance of Series C preferred stock On June 1, 2022, the Company entered into a securities
purchase agreement with an accredited investor, whereby investor purchased from the Company 147,775 shares of Series C Convertible Preferred
Stock of the Company for a purchase price of $128,500. The closing occurred on June 16, 2022. After payment of transaction-related
expenses, net proceeds to the Company from the sale and issuance of the Series C Preferred Stock totaled $115,000. The Company intends
to use the proceeds from the Preferred Stock for general working capital purposes. Copyright Transfer Agreement On June 22, 2022, the Company entered an agreement
with Zestv Studios Limited, a Hong Kong entity 100% owned by the Chief Executive Officer Chiyuan Deng, to transfer the mainland China
copyright and broadcast right for the movie “Too Simple” to Zestv Studios Limited. The total transfer price is $750,000. 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 Actof 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 anyforwardlooking
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 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, including the acquisition and distribution
of movies. In February 2019, we launched a business application (Ai Bian Quan Qiu) through smartphones and official social media accounts
utilizing Artificial Intelligence. It is a matching platform for performers, advertiser merchants, and owners for more efficient services.
We previously generated revenues through an agency service fee from each matched performance. Due to 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 suspend the Ai Bian Quan Qiu platform, which, at the time, 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. As a result, we decide to
focus mainly the IP transactions and online video streaming. Our management and operations are from the New York City, the international
media center. On
April 22, 2020, the Company announced the first phase development of its video streaming service. The online service will be marketed
and distributed in the world under the brand name ABQQ.tv. The Company's professional team are sourcing such dramas and films to provide
video streaming service on the ABQQ.tv. The video streaming website www.ABQQ.tv was officially launched on December 29, 2020. As of May
31, 2022, the Company acquired 59 movie
broadcast rights and a 15-episode TV drama series. The Company will continue marketing and promoting the ABQQ.tv website through Google
Ads and acquire additional broadcast rights for movies and TV series, and plan to charge subscription fees once the Company has obtained
at least 200 broadcast rights of movie and TV series. On October 21, 2021, the Company entered into a Lease
Agreement (the “Lease”) with Martabano Realty Corp. (the “Landlord”), pursuant to which the Company agreed to
lease approximately 8,375 square feet of in what is known as the Mt. Kisco Theatre at 144 Main Street, Mount Kisco, New York. The term
of the Lease is five years plus free rent period. Commencing in month four, the Company's monthly base rent obligation will be approximately
$6,979, which amount will increase in year three to $13,260, year four at $13,658 and the final year at $14,067 in accordance with the
terms of the Lease. The Lease contains customary provisions for real property leases of this type, including provisions allowing the Landlord
to terminate the Lease upon a default by the Company. The space was formerly used as a theatre with a total
of 5 screens and 466 sets for screening films. The former theatre opened on December 21, 1962 with Hayley Millsin “In Search of
the Castaways.” It was a replacement for the town’s other movie theatre that burned down. It was later twinned and further
divided into 5 screens. It was operated for years by Lesser Theaters, then bought by Clearview Cinemas. In June, 2013 it was taken over
by Bow-Tie Cinemas when they took most Clearview locations. It lasted until March, 2020 when it was closed by the Covid-19 pandemic. It
was announced in September 2020 that the closure would be permanent. The Company intends to continue to use the space as a theatre with
a total of 5 screens and 466 sets for screening films. It’s the first theatre of ABQQ Cinemas in America as the new business line
of the Company . On April 27, 2022, we purchased a unique Non-Fungible
Token (“NFT”) movie and music marketplace, named as the NFT MMM, from Stareastnet Portal Limited, which including an APP “NFT
MMM” on Google Play, and full right to the website: stareastnet.io. NFTs are digital assets with a unique identifier that is stored
on a blockchain, and NFTs are tradable rights of digital assets (pictures, music, films, and virtual creations) where ownership is recorded
in blockchain smart contracts. As the expert of IP transactions specialized in the media industry, we believe that NFTs provide great
potential in the intellectual property protection domain. It can promote transparency and liquidity and open the market to innovators
who aim to commercialize their IP efficiently. We are actively launching movie and TV drama copyrights NFTs to buyers on the NFT MMM,
and expect to generate revenues from the transactions incurred on the platform. Subsequent to quarter end, on June 22, 2022, we entered
an agreement with Zestv Studios Limited, a Hong Kong entity 100% owned by our Chief Executive Officer Chiyuan Deng, to transfer the mainland
China copyright and broadcast right for the movie “Too Simple” to Zestv Studios Limited. The total transfer price was $750,000. 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 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 United States and other areas around the globe, we
believe that the demand for our IP, online products and services offerings increases. While we cannot guarantee that the negative effects
of the pandemic will not interfere with our ability to generate revenues, we intend to strengthen our position in this dynamic market
and position the company to best suit its stockholders. Specific to our
company operations, during the pandemic period, we have enacted precautionary measures to protect the health and safety of our 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 execute on our agreements to deliver our core products. We will continue
to actively monitor the situation and may take further actions that alter our 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 reported for the nine months ended
May 31, 2022 was $2,056,000, compared with $102,400 for the nine months ended May 31, 2021. The increase in revenue for the nine months
ended May 31, 2022 over the same period last year was mainly attributable to the Company sold the mainland China copyright and broadcast
right of the movie “Love over the world”, “Our treasures” and “QiQingKuaiChe” for $1,800,000, and
sold the mainland China copyrights and broadcast rights of the movie “LuShang” and “Huafeng” for total $256,000.
For the same period last year, we had to shutdown of the performance matching platform (Ai Bian Quan Qiu). 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. Total revenue for the three months ended May 31, 2022
was $256,000, compared with negative revenue of $51,200 for the three months ended May 31, 2021. The increase was mainly due to we sold
the mainland China copyrights and broadcast rights of the movie “LuShang” and “Huafeng” for total $256,000. Our cost of revenues was $2,235,534 for the nine months
ended May 31, 2022, as compared with $878,601 for the nine months ended May 31, 2021. Most of the increase in cost of revenues for the
nine months ended May 31, 2022 was the result of amortizing movie copyrights and broadcast rights due to the Company obtained more movie
copyrights and broadcast rights. Our
cost of revenues was $862,400 for the three months ended May 31, 2022, as compared with $423,674 for the three months ended May 31, 2021. Most of the increase in
cost of revenues for the three months ended May 31, 2022 was the result of amortizing movie copyrights and broadcast rights due to the
Company obtained more movie copyrights and broadcast rights. As a result, we had a gross loss of $179,534 for the
nine months ended May 31, 2022, as compared with a gross loss of $776,201 for the nine months ended May 31, 2021. The negative gross profit
for the nine months ended May 31, 2022 was attributable to the amortization of movie broadcast rights exceeded the revenue from the copyright
sales of films. As a result, we had a gross loss of $606,400 for the
three months ended May 31, 2022, as compared with a gross loss of $474,874 for the three months ended May 31, 2021. The increase in gross
loss for the three months ended May 31, 2022 was attributable to the amortization of movie broadcast rights exceeded the revenue from
the copyright sales of films. On April 27, 2022, we purchased a unique Non-Fungible
Token movie and music marketplace, named as the NFT MMM, from Stareastnet Portal Limited, which including an APP “NFT MMM”
on Google Play, and full right to the website: starestnet.io. We are actively launching movie NFT to buyers on the NFT MMM, and expect
to generate transaction revenues from the platform. In addition, we are increasing the marketing activities
to achieve enough customers to start subscriptions for ABQQ.tv. and as well as generating revenue from the NYC cinema box office sales. Operating Expenses Operating expenses decreased to $1,448,288 for the
nine months ended May 31, 2022 from $1,466,979 for the nine months ended May 31, 2021. Our operating expenses for nine months ended May
31, 2022 consisted of general and administrative expenses of $1,106,121 and related party salary and wages of $342,167. In contrast, our
operating expenses for the nine months ended May 31, 2021 consisted of general and administrative expenses of $1,208,142 and related party
salary and wages of $258,837. Operating expenses decreased to $421,317 for the three
months ended May 31, 2022 from $517,845 for the three months ended May 31, 2021. Our operating expenses for three months ended May 31,
2022 consisted of general and administrative expenses of $370,067 and related party salary and wages of $51,250. In contrast, our operating
expenses for the three months ended May 31, 2021 consisted of general and administrative expenses of $443,345 and related party salary
and wages of $74,500. 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 restrictions will ease moving forward, but there may still be setbacks as variants
to the virus emerge and governments take lockdown measures in response. These and other costs for COVID expenditures may increase our
operational costs in fiscal 2022 at various levels of operation. Other Income/Expenses We had other expense of $141,945 for the nine months
ended May 31, 2022, as compared with other expenses of $413,702 for the nine months ended May 31, 2021. We had other expense of $141,945 for the three months
ended May 31, 2022, as compared with other expenses of $87,153 for the three months ended May 31, 2021. Our other expenses for the nine and three months ended
May 31, 2022 were the penalty expense recorded in connection with the conversion of its Series C preferred stocks due to the fact that
the Company was late filing the Form 10-Q for the period ended February 28, 2022. Our other expenses for the nine and three months ended
May 31, 2021 were mainly the result of interest expense and the loss from prepaid convertible notes and warrant exercises. Net Loss We incurred a net loss in the amount of $1,769,767
for the nine months ended May 31, 2022, as compared with a net loss of $2,601,535 for the nine months ended May 31, 2021. We incurred a net loss in the amount of $1,169,662
for the three months ended May 31, 2022, as compared with a net loss of $1,079,872 for the three months ended May 31, 2021. Liquidity and Capital Resources As of May 31, 2022, we had $382,215 in current assets
consisting of cash, accounts receivable and prepaid expenses. Our total current liabilities as of May 31, 2022 were $1,646,294. As a result,
we have a working deficit of $1,264,079 as of May 31, 2022 as compared with a working deficit of $228,669 as of August 31, 2021. Operating activities used $478,498 in cash for the
nine months ended May 31, 2022, as compared with $4,043,032 used in cash for the same period ended May 31, 2021. Our negative operating
cash flow in nine months ended May 31, 2022 was mainly the result of our net loss for the nine months combined with operating changes
in purchase of copyrights and broadcast rights and changes in the long-term prepayments, offset by the amortization of intangible assets
and increased account payable and accrued liabilities. Our negative operating cash flow in the same period in 2021 was mainly the result
of our net loss for the nine months combined with operating changes in purchase of copyrights and broadcast rights, offset by the amortization
of intangible assets.. Investing activities used $280,000 for the nine months
ended May 31, 2022, as compared with $5,000 used for the nine months ended May 31, 2021. Our negative investing cash flow for May 31,
2022 was mainly the result of the purchase of NFT MMM, a unique Non-Fungible Token movie and music marketplace. Financing activities provided $998,007 for the nine
months ended May 31, 2022, as compared with $1,660,166 provided in financing activities for the nine months ended May 31, 2021. Our positive
financing cash flow for the period ended May 31, 2022 was the result of proceeds from issuance of our common stock and preferred stock.
Our positive financing cash flow for the period ended May 31, 2021 was the result of proceeds from issuance of convertible notes and convertible
notes and sales of our common stock and preferred stock. Based upon our current financial condition, we do
not have 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 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. Going Concern The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge
of liabilities in the normal course of business for the foreseeable future. As of May 31, 2022, the Company had an accumulated deficit
of approximately $8.37 million and a negative working capital of $1.26 million. For the nine months ended May 31, 2022, the Company incurred
a net loss of approximately $1.77 million and had negative cash flows of approximately $0.48 million from its operations. Although, the
Company generated revenue of approximately $2.06 million as the result of selling the mainland China copyrights and broadcast rights for
five movies (“Love over the world”, “Our treasures”, “Confusion”, “Huafeng” and “Lushang”)
for the nine months ended May 31, 2022, the future operations of the Company depend on its ability to realize forecasted revenues, achieve
profitable operations, and depend on whether or not the Company could obtain the continued financial support from its stockholders or
external financing. Management believes the existing stockholders will provide the additional cash to meet the Company’s obligations
as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations. These factors, among others, raise the substantial
doubt regarding the Company’s ability to continued as a going concern. The financial statements do not include any adjustments to
reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities
that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional
funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. Off Balance Sheet Arrangements As of May 31, 2022, there were no off-balance sheet
arrangements. Critical Accounting Policies In December 2001, the SEC requested that all registrants
list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical
accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain. Our critical accounting policies are set forth in
Note 1 to the financial statements. 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. 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
May 31, 2022. 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 May
31, 2022, 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 May 31, 2022, 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, 2023: (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 nine months ended May 31, 2022 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. PART II – OTHER INFORMATION We are not a party to any material pending legal proceeding.
We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our
voting securities are adverse to us or have a material interest adverse to us . Item 1A: Risk Factors See Risk Factors contained in our Form 10-K filed
with the SEC on January 12, 2022. Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds The Company had the following equity activities during
the three months ended May 31, 2022: On April 7, 2022, the Company issued 2,841,389 shares
of common stock to Geneva Roth Remark Holding Inc. for the conversion of Series C preferred stock. Subsequent to the reporting period, the Company had
the following equity activities: From June 13, 2022 to July 7, 2022, the Company issued
33,986,292 common shares for the conversion of Series C preferred stock. On June 1, 2022, the Company entered into a securities
purchase agreement with an accredited investor, whereby investor purchased from the Company 147,775 shares of Series C Convertible Preferred
Stock of the Company for a purchase price of $128,500. The closing occurred on June 16, 2022. 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
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 May 31, 2022 formatted in Extensible Business Reporting Language (XBRL). 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
July 15, 2022
By: /s/
Jianli Deng
Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer
July 15, 2022 |
