AB INTERNATIONAL GROUP CORP. - Annual Report: 2017 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED AUGUST 31, 2017

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

16^TH FLOOR, RICH TOWERS, 2 BLENHEIM AVENUE

TSIM SHA TSUI, KOWLOON, HONG KONG

Tel. 852-2622-2891

(Address and telephone number of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ¨ No x

No market value for common stock held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter has been computed due to the fact that no trading market was established as of that date.

As of January 12, 2018, the registrant had 29,650,000 shares of common stock issued and outstanding.

TABLE OF CONTENTS

PART I

ITEM 1. BUSINESS

Forward-Looking Statements

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

General

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, the Company's former sole officer, who owned 83% of the Company's outstanding common shares, sold all his common shares to un-related investor Jianli Deng. After the stock sale, the Company modified its business to focus on the creation of a mobile app marketing engine. Mr. Deng served until August 28, 2017, as the Company's Chief Executive Officer and sole Director, at which point he resigned all positions held with the Company.

Currently, the Company is focused on the acquisition and development of intellectual property. 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 the Company a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”), which 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 sublicense the technology for an initial period of 5 years, subject to a right to renew for an additional 5 year term. The Company is 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. We used the underlying technology to create a smartphone app marketing engine to be used for movie trailer promotion in China. We sold the smartphone app on November 16, 2017, for $103,000.

We may borrow funds from our officers and shareholders for working capital, however, they have no formal commitment, arrangement or legal obligation to advance or loan funds to the Company.

We have generated $408,085 of revenue during the year ended August 31, 2017.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 2. DESCRIPTION OF PROPERTY

We do not own or rent any real estate or other properties. A major shareholder of the Company, Spring Wood Ventures Limited, provides us with office space, free of charge, at 16/F Rich Towers 2 Blenheim Avenue, Tsim Sha Tsui, Kowloon, Hong Kong. The Company pays property management fees, electricity fees, and water supply fees.

ITEM 3. LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our Company.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There is a limited public market for our common shares. Our common shares are quoted on the OTC Bulletin Board under the symbol “ABQQ”. To date there has been very limited trading in our common stock. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a Company’s operations or business prospects. We cannot assure you that there will be an established public trading market in the future for our common stock.

Number of Holders

As of January 12, 2018, the 29,650,000 shares of common stock issued and outstanding were held by a total of 12 shareholders of record. The Company’s transfer agent is Corporate Stock Transfer, 3200 Cherry Creek South Drive, Suite 430, Denver, Colorado 80209, Phone (303) 282-4800, Fax (303) 282-5800).

Dividends

No cash dividends were paid on our shares of common stock during the fiscal years ended August 31, 2017 or 2016. We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.

Recent Sales of Unregistered Securities

On March 6, 2016, the Company sold 3,200,000 shares of its common stock at $0.01 per share for total proceeds of $32,000. The purchaser was an accredited investor, purchased the shares for investment purposes, and had an opportunity to both review the Company’s periodic reports as filed with the SEC and to ask questions of the Company’s management. The shares were sold pursuant to the exemption from registration set forth in Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, constitute “restricted securities” as that term is defined in Rule 144 promulgated under the Act, and the certificate representing the shares contains a standard restrictive legend.

On May 23, 2016, the Company sold 6,000,000 shares of its common stock to a related party (the principal shareholder of the Company) at $0.01 per share for total proceeds of $60,000.The shares were sold pursuant to the exemption from registration set forth in Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, constitute "restricted securities" as that term is defined in Rule 144 promulgated under the Act, and the certificate representing the shares contains a standard restrictive legend.

On June 1, 2016, the Company sold 10,000,000 shares of its common stock to a related party (an executive officer and sole director of the Company) at $0.01 per share for total proceeds of $100,000. The shares were sold pursuant to the exemption from registration set forth in Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, constitute "restricted securities" as that term is defined in Rule 144 promulgated under the Act, and the certificate representing the shares contains a standard restrictive legend.

On July 28, 2016, the Company sold 3,580,000 shares of its common stock to three un-related investors at $0.02 per share for total proceeds of $71,600. The purchasers were accredited investors, purchased the shares for investment purposes, and had an opportunity to both review the Company’s periodic reports as filed with the SEC and to ask questions of the Company’s management. The shares were sold pursuant to the exemption from registration set forth in Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, constitute "restricted securities" as that term is defined in Rule 144 promulgated under the Act, and the certificates representing the shares contain a standard restrictive legend.

On May 5, 2017, the Company sold a total of 3,150,000 shares of the Company’s common stock for a total purchase price of $315,000. The shares were issued to two accredited investors pursuant to the exemption from registration provided by Rule 4(a)(2) of the Securities Act of 1933, as amended (the “Act”). The investors purchased the shares for their own accounts and were provided access to both information regarding the Company and the Company’s officers and directors. The certificates representing the shares will contain a standard restrictive legend.

On May 18, 2017, the Company issued a total of 350,000 shares of the Company common stock for $35,000 to two consultants pursuant to the terms of consulting agreements entered into between the Company and the consultants. The shares were issued to the consultants, each of which is an accredited investor, pursuant to the exemption from registration provided by Rule 4(a)(2) of the Act. The consultants acquired the shares for their own accounts and were provided access to both information regarding the Company and the Company’s officers and directors. The certificates representing the shares will contain a standard restrictive legend.

ITEM 6. SELECTED FINANCIAL DATA

Smaller reporting companies are not required to provide the information required by this item

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

General

AB INTERNATIONAL GROUP CORP. 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, the Company's former sole officer, who owned 83% of the Company's outstanding common shares, sold all his common shares to un-related investor Jianli Deng. After the stock sale, the Company modified its business to focus on the creation of a mobile app marketing engine. Mr. Deng served until August 28, 2017, as the Company's Chief Executive Officer and sole Director, at which point he resigned all positions held with the Company.

Currently, the Company is focused on the acquisition and development of intellectual property. 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 the Company a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”), which 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, subject to a right to renew for an additional 5 year term. We are in the process of usingused the underlying technology to create a smartphone app marketing engine to be used for movie trailer promotion in China, which we sold on November 16, 2017, for $103,000 . The Company was 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.

Results of Operations

Until this year we have incurred recurring losses. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities. There can be no assurance we will be successful in raising the funds we require to implement our business plan.

FYE August 31, 2017 Compared to FYE August 31, 2016

Revenue. During the year ended August 31, 2017, we generated $408,085 in revenue, and during the year ended August 31, 2016, we generated $28,200 in revenue.

Cost of Goods Sold. We recognized an expense of $51,912 for cost of services sold during the year ended August 31, 2017, compared to $3,616 for cost of goods sold during the year ended August 31, 2016.

Net Income/Losses. Our net income from continued operations and net income of $141,432 for the fiscal year ended August 31, 2017, was compared to a net loss from continued operations of $36,679 and net loss of $44,489 for the fiscal year ended August 31, 2016.

Liquidity and Capital Resources

As of August 31, 2017, our total assets were $954,031 comprised of $147,164 in cash, $88,320 in accounts receivable, $35,835 in prepaid expenses and $682,712 of intangible assets. Our total liabilities were $228,124 comprised of $168,664 in accounts payable, $2,500 in accrued payroll, $1,613 in advances from a related party and $55,347 tax payable. Stockholders’ equity was $725,907 as of August 31, 2017.

Cash Flows from Operating Activities. We have generated positive cash flows from operating activities in the amount of $166,522 for the fiscal year ended August 31, 2017, compared to negative cash flows from operating activities in the amount of $75,729 during the fiscal year ended August 31, 2016. The increase between the two periods reflects primarily the increase of net income.

Cash Flows from Investing Activities. There was $500,000 and $30,000 of cash used in the purchase of Intangible Assets for the period ended August 31, 2017 and 2016 respectively. For the fiscal year ended August 31, 2017, the Company used $138,240 for the purchase of copyright and $361,760 for the purchase of a patent from a related party.

Cash Flows from Financing Activities. We have financed our operations primarily from the sale of shares of our common stock and by way of a loan from a shareholder. For the fiscal years ended August 31, 2017 and 2016, net cash flows from financing activities were $313,816 and $266,697 respectively. For the fiscal year ended August 31, 2017, $315,000 was received from proceeds from the sale of shares of our common stock and $1,184 was paid to a shareholder that made a loan to the Company. For the year ended August 31, 2016, $263,600 was received from proceeds from the sale of shares of our common stock to both related and unrelated parties, as well as $300 provided from loans from a previous shareholder, and $2,797 due to current shareholder.

Plan of Operation and Funding

The Company has generated income since Inception (July 29, 2013) resulting in retained earnings of $104,753 as of August 31, 2017, though losses are anticipated in the development of our business.

The ability to continue is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, revenue from operations, loans from directors and, or, the private placement of common stock.

We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business; and (ii) marketing expenses. We intend to finance these expenses with further issuances of equity and debt. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

Material Commitments

As of the date of this Annual Report, we do not have any material commitments.

Purchases of Significant Equipment

We do not intend to purchase any significant equipment during the next twelve months.

Off-Balance Sheet Arrangements

As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies are not required to provide the information required by this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO AUDITED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the board of Directors and Shareholders of AB International Group Corp

We have audited the accompanying consolidated balance sheets of AB International Group Corp. (the “Company”) as of August 31, 2017 and 2016 and the related consolidated statements of operations, statements of stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (Untied States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AB International Group Corp. as of August 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

New York, New York

January 12, 2018

Certified Public Accountants

99 Madison Avenue, Suite 601, New York NY 10016

Tel: 347-618-9237, 516-778-6818

Email: Info@ywlcpa.com 

AB INTERNATIONAL GROUP CORP.

Consolidated Balance Sheets

AB INTERNATIONAL GROUP CORP.

Consolidated Statements of Operations

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

AB INTERNATIONAL GROUP CORP.

Consolidated Statements of Stockholders' Equity (Deficit)

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

AB INTERNATIONAL GROUP CORP.

Consolidated Statements of Cash Flows

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

AB INTERNATIONAL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2017

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

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, the Company's former sole officer, who owned 83% of the Company's outstanding common shares, sold all his common shares to un-related investors. Subsequently, the Company modified its business plan and is currently focusing on the creation of a mobile app marketing engine to be used for movie trailer promotion through a mobile smartphone app in China.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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. No intercompany balances or transactions exist during the period ended August 31, 2017.

On January 22, 2016, the Company modified its business plan, and therefore the Company has classified all transactions and balances prior to the modification of the business plan as Discontinued Operations in the financial statements.

Basis of Consolidation

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 August 31, 2017.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

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.

Foreign Currency Transactions

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 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.

Accounts Receivable

Accounts receivable consist of amounts due from promotional services provided. 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 years ended August 31, 2017 and 2016, and no write-off for bad debt were recorded for the years ended August 31, 2017, and 2016.

Prepaid Expenses

Prepaids consist of filing fees and advances related to consulting fees that have been paid in advance. The prepaid balances are amortized when the related expense is incurred.

Intangible Assets

Intangible assets are stated at cost and depreciated as follows:

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.

Income Taxes

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 August 31, 2017, there were no unrecognized tax benefits.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. The Company has recognized the revenues associated with mobile app sales once the criteria has been met, the product has been delivered, and the Company has received payment from the vendor.

Basic and Diluted Income (Loss) Per Share

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. 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 income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

No potentially dilutive debt or equity instruments were issued or outstanding during the years ended August 31, 2017 and 2016.

Recent accounting pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company other than those relating to the revised requirements related to revenue recognition, which are required subsequent to December 15, 2016.

NOTE 3 – INTANGIBLE ASSETS

As of August 31, 2017, and August 31, 2016, the balance of intangible assets are as follows;

Amortization expenses for the years ended August 31, 2017, and 2016, was $51,912 and $3,616, respectively.

On June 1, 2017, the Company entered into patent license agreement with a related party. The agreement shall be for a term of 5 years commencing on the effective date and the Company shall pay the licensor a non-refundable, up-from payment of $500,000 and a royalty of 20% of the gross revenue realized from it sale of licensed products and sub-licensing of others under the agreement. During the year ended August 31, 2017, the Company has paid $361,760 and $138,240 was recorded as accounts payable. On October 10, 2017, the Company fully paid $138,240.

During the year ended August 31, 2017, the Company purchased the copyright and all other rights in a film named “Gong Fu Nv Pai” for $138,240 cash from a non-related party.

NOTE 4 – RELATED PARTY TRANSACTIONS

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 year ended August 31, 2017, a shareholder was repaid $1,184. As at August 31, 2017 and 2016, the Company owed $1,613 and $2,797 to this shareholder, respectively. The amounts are due on demand, unsecured, and non-interest bearing.

From July 29, 2013 through August 31, 2015, the Company's previous sole director loaned the Company $22,406 to pay for incorporation costs and operating expenses. The loan was non-interest bearing, due upon demand and unsecured. Thereafter, this director advanced another $300 to the Company for operating expenses and the Company's computer was sold to this director for a value of $563. On January 15, 2016, the $22,143 balance of the loan was forgiven by this director and was recorded as additional paid-in capital. As at August 31, 2017 and 2016, the Company owed $0 to this director.

On June 1, 2016, the Company sold 10,000,000 shares of its common stock to the Company’s sole director at $0.01.

During the year ended August 31, 2017 and 2016, $30,000 and $15,000 was paid to two related parties as salaries and wages.

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 the Company a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”), which 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 sublicense the technology for an initial period of 5 years, subject to a right to renew for an additional 5 year term. We are in the process of using the underlying technology to create a smartphone app marketing engine to be used for movie trailer promotion in China. The Company is obligated to pay the Licensor a $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, joint owns and controls Licensor During the year ended August 31, 2017, the Company paid $361,760 and $138,240 was recorded as accounts payable. On October 10, 2017, the Company paid the balance owing of $138,204 (Note 3).

NOTE 5 – EQUITY

The Company has 75,000,000 shares of common stock authorized with a par value of $ 0.001 per share.

During the year ended August 31, 2017, the company issued common stock, as follows;

During the year ended August 31, 2016, the company issued 12,780,000 common shares, par value of $0.01, for proceeds of $163,600 to four unrelated parties.

On June 3, 2016, the Company sold 10,000,000 shares of its common stock to a related party (an executive officer and sole director of the Company) at $0.01 per share for total proceeds of $100,000. The shares were sold pursuant to the exemption from registration set forth in Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, constitute "restricted securities" as that term is defined in Rule 144 promulgated under the Act, and contain a standard restrictive legend. The funds were received by the Company on June 3, 2016.

As at August 31, 2017 and 2016, 29,650,000 and 26,150,000 issued and outstanding shares of common stock were held by approximately 13 and 11 shareholders of record, respectively.

NOTE 6 – INCOME TAXES

As of August 31, 2017 the Company had no net operating loss carry forwards. Due to the change in control during the year, the Company determined there are no loss carry forward amounts.

Components of net deferred tax assets, including a valuation allowance, are as follows at August 31, 2017 and 2016:

The valuation allowance for deferred tax assets as of August 31, 2017 was $0, and $25,628 as of August 31, 2016. 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 August 31, 2017 and 2016.

Reconciliation between the statutory rate and the effective tax rate is as follows at August 31, 2017 and 2016:

NOTE 7 – SUBSEQUENT EVENTS

In November 16, 2017, the Company sold the copyright and all other rights in a film named “Gong Fu Nv Pai” copyright and the mobile application (Amoney) assets to an unrelated party for $253,000 cash.

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to August 31, 2017 to the date these financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in these financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

We carried out an evaluation required by Rule 13a-15 of the Exchange Act under the supervision and with the participation of our management, including the individual serving as our principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Annual Report.

The evaluation of the Company’s disclosure controls and procedures and internal control over financial reporting included a review of our objectives and processes, implementation by us and the effect on the information generated for use in this Annual Report. In the course of this evaluation and in accordance with Section 302 of the Sarbanes Oxley Act, we sought to identify material weaknesses in our controls, to determine whether we had identified any acts of fraud involving personnel who have a significant role in our internal control over financial reporting that would have a material effect on our consolidated financial statements, and to confirm that any necessary corrective action, including process improvements, were being undertaken. Our evaluation of our disclosure controls and procedures is done quarterly and management reports the effectiveness of our controls and procedures in our periodic reports filed with the Securities and Exchange Commission. Our internal control over financial reporting is also evaluated on an ongoing basis by our executive management and by other individuals in our organization. The overall goals of these evaluation activities are to monitor our disclosure controls and procedures and internal control over financial reporting and to make modifications as necessary. We periodically evaluate our processes and procedures and make improvements as required.

Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management applies its judgment in assessing the benefits of controls 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. The design of any system of controls 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, regardless of how remote.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) information is accumulated and communicated to management, including the individual serving as our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. Based on that evaluation, the individual serving as our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures were effective as of August 31, 2017.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including the individual serving as our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Based on the foregoing evaluation, our management concluded that our internal control over financial reporting was effective as of August 31, 2017.

There were no changes in our internal controls over financial reporting during the fourth quarter of the year ended August 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

The name, age and titles of our executive officers and directors are as follows:

_____________

(1) Resigned all positions held with the Company on August 28, 2017.

Jianli Deng acted as our President, CEO, Treasurer, Chief Financial Officer, Chief Accounting Officer and sole Director from January 22, 2016 until his resignation on August 28, 2017. Mr. Deng owns 43.17% of the outstanding shares of our common stock. Mr. Deng is a producer of numerous international film and music productions involving mixed media. He is the creator of a mobile phone application which brings video merging functions containing sophisticated video editing technology normally utilized by computers to the smart phone. Mr. Deng attended Hong Kong Open University where he studied music marketing and management. Mr. Deng is Chiyuan Deng’s son.

Chiyuan Deng, age 54, has served as our Chief Executive Officer, Chief Financial Officer, President, and a Director since August 2017. He is an investor, producer, and director of Chinese films. He has worked as Vice Chairman of the Guangdong Province Film and TV Production Industry Association and Vice Secretary General of the China City Image Project Advancement Committee. He has extensive investment and management experience in China, including in the areas of corporate development and business investment activities. Mr. Deng graduated from Guangzhou Broadcast TV University in 1987. Mr. Deng is Jianli Deng’s father.

Ying Zhang, age 33, has served as our Vice President and a Director since August 2017. She is currently the China Marketing & E-Commerce - Business Development Director of All In One Media Ltd. Miss Zhang has 10 years of experience in social media networking and online video marketing.

Linqing Ye, age 37, has served as a Director since August 2017. He currently works in the management of a filming studio and production group in China. Mr. Ye has over 15 years of experience working in movie production, and from 2008 to 2010 he worked as a video photographer with a team that served as a partner for Google in China.

Guangyu Liu, age 34, has served as Treasurer since August 2017. He currently works as Secretary of the company from January 2016. Mr. Liu has 10 years of experience working in property managements in China.

During the past ten years, none of our listed officers or directors has been subject to any of the following events:

1. Any bankruptcy petition filed by or against any business of which any of our officers or directors was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.

2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.

3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting our officers or directors involvement in any type of business, securities or banking activities.

4. Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

5. Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

6. Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

7. Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i. Any Federal or State securities or commodities law or regulation; or

ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8. Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Ethics

We do not presently have a Code of Ethics. Management intends to adopt to adopt a Code of Ethics in the near future.

Board Committees

Our full board serves the functions that would normally be served by a separately-designated Audit Committee, Nominating Committee, and Compensation Committee. Further, we do not have an audit committee financial expert on the Board. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive.

ITEM 11. EXECUTIVE COMPENSATION

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal years ended August 31, 2017 and 2016.

Summary Compensation Table

There are no current employment agreements between the company and its officers.

There are no annuity, pension or retirement benefits or compensation proposed to be paid to our officers or directors or employees pursuant to any plan, contract, or agreement.

There are no outstanding equity awards to our officers or directors or employees.

To date our directors have not received compensation for serving on our Board of Directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides certain information regarding the ownership of our common stock, as of January 12, 2018, and as of the date of the filing of this annual report by:

Our present officers and directors do not beneficially own any of our common stock.

The percent of class is based on 29,650,000 shares of common stock issued and outstanding as of the date of this annual report. We do not currently have any equity compensation plans in place.

The Company has not adopted any equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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 year ended August 31, 2017, a shareholder was repaid $1,184. As at August 31, 2017 and 2016, the Company owed $1,613 and $2,797 to this shareholder, respectively. The amounts are due on demand, unsecured, and non-interest bearing.

From July 29, 2013 through August 31, 2015, the Company's previous sole director loaned the Company $22,406 to pay for incorporation costs and operating expenses. The loan was non-interest bearing, due upon demand and unsecured. Thereafter, this former director advanced another $300 to the Company for operating expenses and the Company's computer was sold to this former director for a value of $563. On January 15, 2016, the $22,143 balance of the loan was forgiven by this former director and was recorded as additional paid-in capital. As at August 31, 2017 and 2016, the Company owed $0 to this former director.

On June 1, 2016, the Company sold 10,000,000 shares of its common stock to the Company’s then sole director at $0.01.

During the year ended August 31, 2017 and 2016, $30,000 and $15,000, respectively, was paid to two related parties as salaries and wages.

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 the Company a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”), which Technology is the subject of a utility model patent in the Peoples 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, subject to a right to renew for an additional 5 year term. We are in the process of using the underlying technology to create a smartphone app marketing engine to be used for movie trailer promotion in China. The Company is obligated to pay the Licensor a $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, joint owns and controls Licensor.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company's Board of Directors has selected Yu Certified Public Accountant, P.C. to serve as the Company's independent registered public accounting firm and to audit the Company's consolidated financial statements for the fiscal year ending August 31, 2017 and the fiscal year ending August 31, 2016.

The following table presents fees billed by our independent registered accountants for the following professional services rendered for the Company for the fiscal years ended August 31, 2017 and 2016:

"Audit fees" relate to services for the audit of the Company's consolidated financial statements for the fiscal year and for reviews of the interim consolidated financial statements included in the Company's quarterly reports filed with the SEC.

“Audit-related fees" relate to services that are reasonably related to the audit of the Company's consolidated financial statements and are not included in "audit fees." These services include consultations on certain accounting matters.

Our Board’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accounting firm, and to not engage them to perform the specific non-audit services proscribed by law or regulation.

ITEM 15. EXHIBITS

The following exhibits are filed as part of this Annual Report.

Exhibits:

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.