10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended May 31, 2019

OR

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

For the transition period from ______________ to ______________

Commission File Number: 0-54236

UBI Blockchain Internet Ltd.

(Exact name of registrant as specified in its charter)

Delaware	27-3349143
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

Unit 03, Level 9, Core F, Smart Space, Block 3, 100 Cyberport Rd., Hong Kong, People’s Republic of China
(Address of principal executive offices)	(Zip Code)

(852) 36186110

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July 12, 2019, there were 30,799,046 Class A shares of common stock, par value $0.001; 6,000,000 Class B shares of common stock, par value $0.001, and 73,550,000 Class C shares of common stock, par value $0.001 of the registrant issued and outstanding.

UBI Blockchain Internet Ltd. Quarterly Report on Form 10-Q

For the Quarterly Period Ended May 31, 2019

Table of Contents

	Page
PART I - FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Balance Sheets as of May 31, 2019 (Unaudited) and August 31, 2018	1
Statements of Operations for the Three and Nine Months Ended May 31, 2019 (Unaudited)	2
Statements of Stockholders’ Deficit for the Nine Months Ended May 31, 2019 and May 31, 2018 (Unaudited)	3
Statements of Cash Flows for the Nine Months Ended May 31, 2019 and May 31, 2018 (Unaudited)	4
Notes to Financial Statements (Unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures about Market Risk	30
Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION	31
Item 1 — Legal Proceedings	31
Item 1A — Risk Factors	31
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3 — Defaults Upon Senior Securities	31
Item 4 — Mine Safety Disclosures	31
Item 5 — Other Information	31
Item 6 — Exhibits	31
SIGNATURES	32

i

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Condensed Consolidated Balance Sheets

	May 31, 2019			August 31, 2018
	(Unaudited)
Assets
Current Assets
Cash	$	60,328		$	23,434
Inventory		23,205			23,448
Current portion of prepaid stock-based salaries and consulting fees		-			493,333
Deposit and prepaid expenses		19,938			18,093
Total Current Assets		103,471			558,308
Office equipment, net of accumulated depreciation		2,786			9,359
Other Assets
Intangible assets, net of accumulated amortization		103,088			127,037
Total Other Assets		103,088			127,037
Total Assets	$	209,345		$	694,704
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	222,278		$	151,405
Due to related party		3,400,725			1,923,599
Total current liabilities		3,623,003			2,075,004
Total liabilities		3,623,003			2,075,004
Stockholders’ Equity (Deficit):
		-			-
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 30,799,046 and 30,799,046 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively		30,799			30,799
Class B common stock, $0.001 par value, 500,000,000 shares authorized, 6,000,000 and 6,000,000 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively		6,000			6,000
Class C common stock, $0.001 par value, 500,000,000 shares authorized, 73,550,000 and 73,550,000 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively		73,550			73,550
Additional paid in capital		7,841,571			7,841,571
Stock subscription payable		90,521			90,521
Accumulated other comprehensive income		35,250			25,051
Accumulated deficit		(11,491,349	)		(9,447,792	)
Total stockholders’ equity (deficit)		(3,413,658	)		(1,380,300	)
Total liabilities and Stockholders’ Equity (Deficit)	$	209,345		$	694,704

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

1

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Unaudited Condensed Consolidated Statements of Operations

For the Three and Nine Months Ended May 31, 2019 and 2018

	Three Months Ended						Nine Months Ended
	May 31, 2019			May 31, 2018			May 31, 2019			May 31, 2018
Revenue	$	-		$	-		$	113,278		$	-
Operating Expenses:
Employee compensation (including stock-based compensation of $0,$0, $0, and $96,668 respectively)		250,247			180,980			674,924			641,036
Consulting fees (including stock-based compensation of $123,333, $185,000, $493,333 and $1,018,333, respectively)		123,333			185,000			493,333			1,023,383
Professional fees (including stock-based compensation of $0, $0, $0 and $335,872, respectively)		95,230			61,280			203,850			454,152
Research and development		97,695			86,717			220,941			158,496
Occupancy		29,752			25,359			96,825			65,049
Depreciation and amortization		10,061			6,697			28,843			11,021
Other		162,716			28,898			309,910			100,392
Total Operating Expenses		769,034			574,931			2,028,626			2,453,529
Loss from Operations		(769,034	)		(574,931	)		(1,915,348	)		(2,453,529	)
Other Income (Expenses)
Interest expense - related party		(51,173	)		(24,024	)		(128,122	)		(52,869	)
Interest income		37			-			120			-
(Loss) gain on foreign currency exchange		(11	)		(157	)		(207	)		(215	)
Total Other Income (Expenses) - net		(51,147	)		(24,181	)		(128,209	)		(53,084	)
Net Loss		(820,181	)		(599,112	)		(2,043,557	)		(2,506,613	)
Other comprehensive income (loss):
Foreign exchange translation adjustment		25,523			6,415			10,199			(1,084	)
Comprehensive Loss	$	(794,658	)	$	(592,697	)	$	(2,033,358	)	$	(2,507,697	)
Net Loss per share of Class A, Class B, and Class C Common Stock
Basic and Diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Weighted Average Number of Class A, Class B, and Class C Common Shares
Basic and Diluted		110,349,046			110,199,046			110,349,046			110,189,700

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Unaudited Condensed Consolidated Statements of Stockholders’ Deficit

For the Nine Months Ended May 31, 2019 and 2018

	Preferred Stock				Class A Common Stock				Class B Common Stock				Class C Common Stock				Additional Paid in		Stock Subscription		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable		Deficit			Income			Equity
For the Nine Months Ended May 31, 2019
Balance - August 31, 2017		-	$	-		30,717,046	$	30,717		6,000,000	$	6,000		73,400,000	$	73,400	$	7,475,931	$	90,521	$	(6,343,426	)	$	75		$	1,333,218
Class A common stock issued to four individuals associated with the Company’s former law firm - October 2, 2017		-		-		82,000		82		-		-		-		-		335,790		-		-			-			335,872
Class C common stock issued for consulting services - August 30, 2018		-		-		-		-		-		-		150,000		150		29,850		-		-			-			30,000
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		-		-			24,976			24,976
Net loss for the year ended August 31, 2018		-		-		-		-		-		-		-		-		-		-		(3,104,366	)		-			(3,104,366	)
Balance - August 31, 2018		-	$	-		30,799,046	$	30,799		6,000,000	$	6,000		73,550,000	$	73,550	$	7,841,571	$	90,521	$	(9,447,792	)	$	25,051		$	(1,380,300	)
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		-		-			10,199			10,199
Net loss for the nine months ended May 31, 2019		-		-		-																(2,043,557	)		-			(2,043,557	)
Balance - May 31, 2019		-	$	-		30,799,046	$	30,799		6,000,000	$	6,000		73,550,000	$	73,550	$	7,841,571	$	90,521	$	(11,491,349	)	$	35,250		$	(3,413,658	)
For the Nine Months Ended May 31, 2018
Balance - August 31, 2017		-	$	-		30,717,046	$	30,717		6,000,000	$	6,000		73,400,000	$	73,400	$	7,475,931	$	90,521	$	(6,343,426	)	$	75		$	1,333,218
Class A common stock issued to four individuals associated with the Company’s former law firm - October 2, 2017		-		-		82,000		82		-		-		-		-		335,790		-		-			-			335,872
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		-		-			(1,084	)		(1,084	)
Net loss for the nine months ended May 31, 2018		-		-		-		-		-		-		-		-		-		-		(2,506,613	)		-			(2,506,613	)
		-	$	-		30,799,046	$	30,799		6,000,000	$	6,000		73,400,000	$	73,400	$	7,811,721	$	90,521	$	(8,850,039	)	$	(1,009	)	$	(838,607	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Unaudited Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended May 31, 2019 and 2018

	May 31, 2019			May 31, 2018
Cash Flows from Operating Activities
Net Loss	$	(2,043,557	)	$	(2,506,613	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization expense		28,843			11,021
Stock-based compensation - employees		-			96,668
Stock-based compensation - consulting fees		493,333			1,018,333
Stock-based compensation - professional fees		-			335,872
Changes in operating assets and liabilities:
Increase in inventory		-			(24,806	)
Increase in deposit and prepaid expense		(2,055	)		(3,659	)
Increase in accounts payable and accrued liabilities		71,032			41,966
Increase in interest payable to related party		128,123			52,796
Net cash used by operating activities		(1,324,281	)		(978,422	)
Cash Flows from investing activities
Website and software development costs		-			(20,114	)
Purchase of office equipment		-			(9,302	)
Net cash used by operating activities		-			(29,416	)
Cash Flows from financing activities
Advance from related party		1,361,014			1,047,943
Net cash provided by financing activities		1,361,014			1,047,943
Effect of exchange rate on cash		161			(265	)
Net Increase in Cash		36,894			39,840
Cash and cash equivalents at beginning of period		23,434			15,405
Cash and cash equivalents at end of period	$	60,328		$	55,245
Supplemental Cash Flow Information:
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

UBI BLOCKCHAIN INTERNET LTD.

(FORMERLY JA ENERGY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2019 AND 2018

NOTE 1 – ABOUT THE COMPANY

Organization and Capitalization of the Company

The Company was organized August 26, 2010 (Date of Inception) under the laws of the State of Nevada, as JA Energy. The Company was incorporated as a subsidiary of Reshoot Production Company, a Nevada corporation. Reshoot Production Company was incorporated October 31, 2007. In November 2014, Reshoot dividended its shares of JA Energy to the then stockholders of Reshoot. On November 21, 2016, the Company reincorporated in Delaware under the name UBI Blockchain Internet Ltd.

On September 15, 2016, the Company, with the approval of the Board of Directors agreed to issue 30,000,000 shares of unregistered restricted Class A Common Stock, 6,000,000 shares of unregistered restricted Class B Voting Common Stock, which carries a voting weight equal to ten (10) Common Shares, and 40,000,000 shares of unregistered restricted Class C Common Stock to UBI Blockchain Internet, LTD (“UBI Hong Kong”), a Hong Kong company, or assigns in exchange for $200,000. On September 26, 2016, pursuant to NRS 78.1955, the Board of Directors approved the filing of a Certificate of Designation with the Nevada Secretary of State to designate Class A, B and C common shares, par value $0.001. Concurrently with the filing of this Certificate of Designation, all Common Stock issued and outstanding became Class A Common Stock. Class B Common Stock carries a voting weight equal to ten (10) Common Shares. The Class B shares can be converted into fully paid and non-assessable Common Shares, on a one-to-one basis, at the option of the holder at any time upon written notice to the Company and its authorized transfer agent. Class C Common Stock has no voting or conversion rights.

On October 7, 2016, the 30,000,000 Class A shares and 6,000,000 Class B shares were issued.

On November 21, 2016, the Company reincorporated in Delaware under the name UBI Blockchain Internet Ltd. and increased the number of authorized shares from 75,000,000 to 200,000,000 shares consisting of 130,000,000 authorized shares of Class A Common Stock, 6,000,000 authorized shares of Class B Common Stock and 64,000,000 authorized shares of Class C Common Stock. On March 1, 2017, the 40,000,000 shares of Class C common stock were issued. All of the preceding shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and were issued under Regulation S to one (1) foreign entity who attested it is an accredited investor who is not a citizen or a resident of the USA.

On January 3, 2017, the Company appointed four new directors, accepted the resignations of its two former directors and appointed Tony Liu (who controls UBI Hong Kong) as Chief Executive Officer of the Company.

Commencing in the three months ended February 28, 2017, the Company started research activities in Hong Kong relating to “blockchain” technology planned to be provided for future customers.

On March 1, 2017, the Company issued 40,000,000 shares of Class C common stock to our chief executive officer Tony Liu pursuant to the September 15, 2016 agreement (see above).

On April 3, 2017, the Company issued a total of 8.400,000 shares of Class C common stock to a total of 45 contractor employees and nonemployees (see Note 7).

On May 1, 2017, the Company issued 500,000 restricted shares of Class A common stock to an independent consultant for consulting services to be performed for the Company (see Note 7).

On May 24, 2017, the Company increased the number of authorized common shares from 200,000,000 shares to 2,000,000,000 shares (1,000,000,000 shares of Class A common stock, 500,000,000 shares of Class B common stock, and 500,000,000 shares of Class C common stock).

5

On August 29, 2017, upon the approval of the acquisition by the related PRC authorities, the Company issued a total of 25,000,000 shares of Class C common stock to shareholders of Shenzhen Nova E-commerce, Ltd. (“Nova”) in exchange for control of the business of Nova (see Notes 4 and 7). On April 7, 2018, Nova changed its name to UBI Shenzhen Cross Border E- Commerce Co., Ltd. (“UBI Shenzhen”).

Current Company Operations

UBI Blockchain Internet Ltd. (“UBI Delaware”) was reincorporated in Delaware on November 21, 2016 for the purpose of entering into the blockchain technology business. UBI Blockchain Internet, Ltd (“UBI Hong Kong”) was organized in the Hong Kong Special Administrative Region (the “HKSAR”) in September 2016 to facilitate local financing participations. UBI Delaware opened a bank account at Abacus Federal Savings Bank in New York City. This bank account is funded by Tony Liu and is used to pay Company invoices from the U.S. UBI Hong Kong has a bank account at China Citic Bank International in Hong Kong, which is also funded by Tony Liu; this account makes disbursements relating to UBI Delaware operations in Hong Kong (such as payroll, rent, and other office expenses). UBI Hong Kong is owned and controlled by Tony Liu, CEO of UBI Delaware. UBI Hong Kong owns 30,000,000 (97%) of the 30,799,046 issued and outstanding shares of UBI Delaware Class A common stock at May 31, 2019. UBI Hong Kong has no other assets and no business operations of its own.

In December 2016, UBI Delaware engaged the services of 8 full time employees to principally work in its blockchain technology business. In January 2018, UBI Hong Kong executed an agreement with the HKSAR and The Hong Kong Polytechnic University to complete a project related to blockchain technology (see Note 11).

NOTE 2 - GOING CONCERN

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. At May 31, 2019, the Company had cash of $60,328 and current liabilities of $3,623,003. For the nine months ended May 31, 2019, the Company incurred a net loss of $2,043,557. According to US GAAP, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. However, our major shareholder, who has been funding our operations in the past, has agreed to continue doing so when the Company does not generate sufficient revenue to cover its costs of operations. The Company does not have any debt other than good faith loans from the major shareholder.

The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company.

The accompanying condensed unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The consolidated balance sheet of the Company at the end of the preceding fiscal year has been derived from the audited balance sheet and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 and is presented herein for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for all period presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the respective full years.

6

Certain footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 filed with the SEC on December 7, 2018.

Basis of Accounting

The accompanying condensed unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of UBI Blockchain Internet Ltd. and its wholly owned subsidiary UBI Shenzhen Cross Border E-Commerce Co., Ltd, (“UBI Shenzhen”), formerly Shenzhen Nova E-commerce, Ltd. (“Nova”) from the date of acquisition of Nova on August 29, 2017 (see Note 4). All intercompany balances and transactions have been eliminated in consolidation.

Earnings per Share

The basic earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the weighted average number of Class A, Class B and Class C common shares issued and outstanding during the period. The diluted earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the diluted weighted average number of Class A, Class B and Class C shares outstanding during the period. The diluted weighted average number of Class A, Class B and Class C shares outstanding is the basic weighted average number of Class A, Class B, and Class C shares adjusted as of the first day of the period for any potentially dilutive debt or equity (none for the periods presented).

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash and cash equivalents.

Of the $60,328 cash at May 31, 2019, $45,388 was held in foreign bank accounts not insured by FDIC.

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

Inventory

Inventory, consisting of finished goods purchased from third parties, are stated at the lower of cost (first-in, first-out method) or market.

7

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line basis over the estimated useful lives of the respective assets. Expenditures for repairs and maintenance are expensed as incurred.

Intangible Assets

Intangible assets, including website development costs, software acquired to be marketed, and office software, are carried at cost less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated economic lives of the respective assets (5 years for website development costs and 5 years for the software acquired to be marketed and 2 years for the office software).

Software development costs include payments made to independent software developers under development agreements, as well as direct costs incurred for internally developed products. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product requires both technical design documentation and game design documentation, or the completed and tested product design and a working model. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established and the evaluation is performed on a product-by-product basis. For products where proven technology exists, this may occur early in the development cycle. Software development costs related to hosted service revenue arrangements are capitalized after the preliminary project phase is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Prior to a product’s release, if and when we believe capitalized costs are not recoverable, we expense the amounts. Capitalized costs for products that are canceled or are expected to be abandoned are expensed in the period of cancellation. Amounts related to software development which are not capitalized are charged immediately to “Research and development”.

Foreign Currency Translation

The reporting currency and functional currency of the Company is the United States Dollar.

The functional currency of UBI Shenzhen is the Chinese Renminbi (“RMB”). Assets and liabilities of UBI Shenzhen are translated into United States dollars at period-end exchange rates ($1.00 = 6.9092 RMB at May 31, 2019 and $1.00 = 6.8375 RMB at August 31, 2018). UBI Shenzhen revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 6.8264 RMB for the nine months ended May 31, 2019 and $1.00 = 6.5282 RMB for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

The functional currency of UBI HK is the Hong Kong Dollar (“HK$”). Assets and liabilities of UBI HK are translated into United States dollars at period-end exchange rates ($1.00 = 7.8430 HK$ at May 31, 2019 and $1.00 = 7.8494 HK$ at August 31, 2018). UBI HK revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 7.8399 HK$ for the nine months ended May 31, 2019 and $1.00 = 7.8130 HK$ for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant for the three and nine months ended May 31, 2019 and 2018, were reflected in income.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

8

Revenue recognition

The Company recognizes revenue from services and product sales once all the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services or products have been delivered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonably assured.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation - Stock Compensation,” which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company does not have an employee stock option plan.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock issued to consultants and other non-employees. In accordance with ASC Topic 505-50, the stock issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the stock, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to expense over the period during which services are rendered.

Year end

The Company’s fiscal year-end is August 31.

Related Parties

Related parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.

Recent Accounting Pronouncements

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

NOTE 4 – ACQUISITION OF UBI SHENZHEN CROSS BORDER E-COMMERCE CO., LTD (FORMERLY NOVA E-COMMERCE, LTD.)

On August 29, 2017, pursuant to an Acquisition Agreement dated May 16, 2017, the Company acquired 100% ownership of UBI Shenzhen Cross Border E-Commerce Co., Ltd. (“UBI Shenzhen”), formerly Shenzhen Nova E-commerce, Ltd. (“Nova”), in exchange for 25,000,000 shares of Company Class C common stock. UBI Shenzhen is a Shenzhen Chinese corporation which was incorporated on May 26, 2016. UBI Shenzhen plans on operating an online store in China selling a wide range of products.

9

The acquisition has been accounted for as a recapitalization transaction in the accompanying condensed unaudited consolidated financial statements. Accordingly, the financial position and results of operations of UBI Shenzhen prior to the August 29, 2017 date of acquisition have been excluded from the accompanying condensed unaudited consolidated financial statements.

The carrying values of the assets and liabilities of UBI Shenzhen at the August 29, 2017 date of acquisition consisted of:

Cash	$	-
Office equipment, net		13,628
Website development costs		92,035
Total assets		105,663
Accounts payable and accrued liabilities		24,651
Due to related party		135,865
Total liabilities		160,516
Excess of liabilities over assets	$	54,853

NOTE 5 – PREPAID STOCK BASED SALARIES AND CONSULTING FEES

Prepaid stock-based salaries and consulting fees at May 31, 2019 and August 31, 2018 consist of:

	Fair value of stock issuance (Note 6)		Prepaid balance at May 31, 2019		Prepaid balance at August 31, 2018
1,450,000 shares of Class C common stock issued to 7 employees on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective employees with a service term of one year expiring December 31, 2017	$	290,000	$	-	$	-
6,950,000 shares of Class C common stock issued to 38 consultants on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective consultants with a service term of one year expiring December 31, 2017		1,390,000		-		-
500,000 shares of Class A common stock issued to a consultant on May 1, 2017 pursuant to Consulting Agreement dated April 28, 2017 between UBI Delaware and the respective consultant with a service term of two years expiring April 30, 2019		1,480,000		-		493,333
Total	$	3,160,000		-		493,333
Current portion				-		(493,333	)
Non-current portion			$	-	$	-

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NOTE 6 – INTANGIBLE ASSETS

Intangible assets at May 31, 2019 and August 31, 2018 consist of:

	May 31, 2019			August 31, 2018
Website development costs	$	92,977		$	93,952
Accumulated amortization		(25,041	)		(11,278	)
Website development costs, net		67,936			82,674
Software acquired to be marketed		36,907			37,294
Accumulated amortization		(5,603	)		-
Software acquired to be marketed, net		31,304			37,294
Office software		8,395			8,483
Accumulated amortization		(4,547	)		(1,414	)
Office software, net		3,848			7,069
Total intangible assets - net	$	103,088		$	127,037

At May 31, 2019, the expected future amortization expense of the intangible assets was:

Years ending	Amount
May 31, 2020	$	29,824
May 31, 2021		25,976
May 31, 2022		24,043
May 31, 2023		18,595
May 31, 2024		4,650
Total	$	103,088

Website Development Costs

In January 2018, UBI Shenzhen changed the domain name for its website from www.oyamall.com to www.hihealth8.com. The change was made to, among other things, correct certain technical problems which we experienced in testing potential transactions involving Chinese currency. UBI Shenzhen’s website became operational on March 12, 2018.

UBI Shenzhen has yet to generate any revenues from its website. In order for UBI Shenzhen to begin its business operations, UBI Shenzhen will be selling third party products. In the future, management plans to develop its own products for sale. It was a management decision to acquire UBI Shenzhen for primarily two business reasons: 1) as a separate subsidiary, once UBI Shenzhen is fully operational, management anticipates it should generate revenues and profit for the Company; and 2) this acquisition provides a test model to utilize the blockchain technology the Company is developing to track drug products sold by UBI Shenzhen. As a test model, this will allow the Company to see if the products sold through its website are substituted with counterfeit products before they reach the final consumer. In other words, products sold through a third-party consumer will be tracked using the Company’s blockchain technology to see if there is a break in the supply chain. This will take place once the Company develops its blockchain digital tracking system. The Company will be able to monitor UBI Shenzhen shipments to the final consumer to determine if there has been any tampering with shipments in the supply chain.

UBI Shenzhen employs two people principally involved in website related creation/maintenance activities. UBI Shenzhen’s expenses are being funded by loans from Tony Liu.

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Software Acquired to be Marketed

On November 24, 2017, January 17, 2018 and March 15, 2018, UBI Shenzhen executed agreements with a third-party vendor to produce customized game software called Farmer Game for a total of RMB 285,000 ($41,682 using the August 31, 2018 exchange rate). UBI Shenzhen expects to use the Farmer Game to attract more visitors to its website and to potentially earn revenues from users’ use of game points to purchase products sold on the website. Farmer Game is expected to be introduced to website visitors in the near future.

In the year ended August 31, 2018, UBI Shenzhen paid the Farmer Game vendor a total of RMB 285,000 ($41,682), of which RMB 30,000 ($4,388) was expensed and RMB 255,000 ($37,294) was capitalized.

NOTE 7 - STOCKHOLDERS’ EQUITY

Pursuant to the September 15, 2016 change in control agreement (see Note 1), a representative of UBI paid into an attorney trust account $150,000 on September 14, 2016 and $67,500 on October 11, 2016, for a total of $217,500. The $217,500 consisted of $200,000 for the newly issued shares of Class A, Class B Voting, and Class C Common Stock and $17,500 for the payment of specific expenses.

Starting in December 2016, the Company engaged the services of a total of 45 employees and non-employees to perform certain marketing, research and development and investor relations services. The related agreements, which were executed in March 2017, provided for the contractors to work for the Company for terms ranging from September 2016 to January 1, 2017 to December 31, 2017 for compensation including the issuance of a total of 8,400,000 shares of Class C common stock (which occurred April 3, 2017). Of the 8,400,000 shares, 5,000,000 shares were issued to Star Bright International Investment Enterprise Limited, 100,000 shares were issued to the Company’s chief financial officer and 500,000 shares were issued to an independent Director of the Company.

The $1,680,000 estimated fair value of the 8,400,000 shares of Class C common stock (using a price of $0.20 per share) was recorded as prepaid expenses and was expensed evenly over the year ended December 31, 2017 (see Note 5). For the nine months ended May 31, 2019 and 2018, we recognized stock-based employee compensation of $0 and $96,668, respectively and recognized stock-based consulting fees expense of $0 and $463,333, respectively, from these agreements.

On May 1, 2017, the Company issued 500,000 restricted shares of Class A common stock to a consultant pursuant to a Consulting Agreement dated April 28, 2017 with a service term of two years expiring April 30, 2019. The $1,480,000 estimated fair value of the 500,000 shares of Class A common stock (using a price of $2.96 per share based on a $3.95 closing trading price on April 28, 2017 less a 25% restricted stock discount) was recorded as a prepaid expense and was expensed evenly over the 2-year service period expiring April 30, 2019. For the year ended August 31, 2018, we recognized stock-based consulting fees expense of $740,000 from this agreement. For the nine months ended May 31, 2019 and 2018, we recognized stock-based consulting fees expense of $493,333 and $555,000, respectively, from this agreement.

On August 29, 2017, upon the regulatory approval of the transfer of Nova’s Hong Kong business license to the Company, the Company acquired 100% ownership of Nova in exchange for the Company’s issuance of a total of 25,000,000 shares of Class C common stock to the 130 owners of Nova.

On October 2, 2017, the Company issued a total of 82,000 restricted shares of Class A common stock to 4 individuals associated with the Company’s law firm for legal services rendered. The $335,872 estimated fair value of the 82,000 shares of Class A common stock (using a price of $4.10 per share based on a $5.12 closing trading price on October 2, 2017 less a 20% restricted stock discount) was expensed in the three months ended November 30, 2017.

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On December 26, 2017, the Company’s Board of Directors approved a 3 for 1 common stock dividend of the Company’s issued and outstanding Class A and Class B common stock. On January 2, 2018, the Company was advised by FINRA to resubmit its request as a forward stock split instead of a stock dividend.

On January 4, 2018, the Company’s Board of Directors approved a 4 for 1 forward stock split for holders of record on January 10, 2018 of the Company’s issued and outstanding shares of Class A and Class B common stock. For each share of Class A common stock held, stockholders were to receive an additional 3 shares of Class A common stock, For each share of Class B common stock held, stockholders were to receive an additional 3 shares of Class B common stock. On January 18, 2018, the Company’s Board of Directors decided to cancel the proposed 4-for-1 forward stock split.

On January 5, 2018, the Securities and Exchange Commission announced the temporary suspension of trading in the Company’s securities from January 8, 2018 to January 22, 2018 because of (i) questions regarding the accuracy of assertions, since at least September 2017, by the Company in filings with the Commission regarding the Company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the Company’s Class A common stock since at least November 2017.

On March 31, 2018, the Company’s Board of Directors approved issuing 150,000 Class C common unregistered restricted shares to Global Alliance Securities for consulting services. 150,000 Class C common shares were issued on August 30, 2018. The $30,000 estimated fair value of the 150,000 shares of Class C common stock (using a price of $0.20 per share) was expensed in the three months ended August 31, 2018.

NOTE 8 - RELATED PARTY TRANSACTIONS

Commencing March 2017, the Company has been using office space provided by an affiliate of UBI Blockchain Internet, LTD. (Hong Kong) (“UBI Hong Kong”) at a monthly rent of 22,100 Hong Kong Dollars (approximately $2,818 at the May 31, 2019 exchange rate) per month. For expediency reasons, the Company also uses bank accounts in the name of UBI Hong Kong to collect cash receipts and expend cash disbursements relating to Company operations. UBI Hong Kong owns 30,000,000 shares of the Company’s Class A common stock.

During the three and nine months ended May 31, 2019, Tony Liu, chief executive officer of the Company, advanced or paid a total of $557,703 and $1,361,014, respectively, of expenditures on behalf of the Company. As of May 31, 2019, the total principal amount due to Tony Liu was $3,181,634. The amount due to Tony Liu for these expenditures is interest bearing at a rate of 7% per annum. $51,173 and $24,024 interest expense was accrued for the three months ended May 31, 2019 and 2018, respectively. $128,122 and $52,869 interest expense was accrued for the nine months ended May 31, 2019 and 2018, respectively. As of May 31, 2019, accrued interest amounted to $219,091. The advances and related accrued interest are due on demand.

Included in accounts payable and accrued liabilities at May 31, 2019 and August 31, 2018 is accrued salary due to Tony Liu, chief executive officer, $51,000 and $62,744, respectively.

NOTE 9 - PROVISION FOR INCOME TAXES

The Company accounts for income taxes under FASB Accounting Standard Codification ASC 740 “Income Taxes”. ASC 740 requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

13

As of May 31, 2019 and August 31, 2018, the Company had net operating loss carry forwards of approximately $4,433,000 and $2,883,000, respectively, as follows:

Tax Jurisdiction	May 31, 2019		August 31, 2018
United States	$	1,543,000	$	1,296,000
Hong Kong		1,631,000		855,000
China (UBI Shenzhen)		1,259,000		732,000
Total	$	4,433,000	$	2,883,000

United States net operating losses prior to 2018 may be carried forward to reduce future years taxable income for 20 years; United States net operating losses after 2017 may be carried forward indefinitely. Hong Kong net operating losses may be carried forward indefinitely. China net operating losses may be carried forward for 5 years. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization has not been determined likely to occur. Also, United States tax laws limit the amount at loss available to be offset against future taxable income when a substantial change in ownership occurs.

At May 31, 2019 and August 31, 2018, deferred tax assets consisted of:

	May 31, 2019			August 31, 2018
Net operating loss carry forwards	$	907,919		$	587,617
Valuation allowance		(907,919	)		(587,617	)
Deferred tax assets - net	$	-		$	-

As a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, the United States corporate income tax rate was reduced from 35% to 21% effective January 1, 2018. Accordingly, we reduced our deferred income tax asset relating to our United States net operating loss carryforward (and the valuation allowance thereon) by approximately $166,000 on December 31, 2017.

All tax years remain subject to examination by the respective tax authorities.

NOTE 10 - DEVELOPMENT AGREEMENTS

The Brewing Company Agreement

In August 2018, the Company entered into a development agreement, by and among the Company, Heilongjiang Province TongFangZhuoXin Brewing Co., Ltd. (the “Brewing Company”) and Global Blockchain Cooperation Alliance, dated August 26, 2018 (the “Brewing Company Agreement”). Pursuant to the terms of the Brewing Company Agreement, the Company agreed to provide to the Brewing Company blockchain based technology and software for the management of the Brewing Company’s manufacturing process. In exchange for the services and technology provided by the Company, the Brewing Company agreed to pay to the Company a total of RMB 7,000,000 (approximately $1,007,808), which is payable over the term of the Brewing Company Agreement in a series of milestone payments. The Company received the initial payment of RMB 400,000 (RMB 388,350 net of tax or approximately $56,223) on September 30, 2018. The balance is payable in a series of 8 payments ranging from RMB 300,000 (approximately $43,192) to RMB 1,500,000 (approximately $215,959) from time to time as each milestone is completed over a period of 27 months, with the final payment being due on or before December 31, 2020. Any disputes between the parties are to be submitted to the Beijing International Arbitration Center. The Brewing Company Agreement provides for a breach penalty in an amount equal to 5% of the contract amount in the event that either party defaults in its obligations pursuant to the Brewing Company Agreement.

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The Company recognizes revenue under this agreement as its performance obligations under each milestone of the agreement are completed. At November 30, 2018, the Company’s performance obligations of the Phase 1 Period 1 milestone (relating to the RMB 400,000 initial payment) had been completed. At May 31, 2019, the Company has no contract assets or contract liabilities relating to this agreement.

The Hotel Group Agreement

In August 2018, the Company entered into a development agreement, by and between the Company and Harbin Madieer Hotel Group Co., Ltd. (the “Hotel Group”), dated August 26, 2018 (the “Hotel Group Agreement”). Pursuant to the terms of the Hotel Group Agreement, the Company agreed to provide to the Hotel Group a blockchain based system for hotel management. In exchange for the services and technology provided by the Company, the Hotel Group agreed to pay to the Company a total of RMB 1,000,000 (approximately $143,973) which is payable over the term of the Hotel Group Agreement in a series of milestone payments. The initial payment of RMB 400,000 (RMB $388,350 net of tax or approximately $56,222) was received on November 12, 2018. The balance is payable in a series of 2 payments of RMB 300,000 (approximately $43,192) from time to time as each milestone is completed, over a period of 11 months, with the final payment being due on or before July 31, 2019. Any disputes between the parties are to be submitted to the Beijing International Arbitration Agency or a People’s Court of the Hotel Group’s location. The Hotel Group Agreement provides for a breach penalty in an amount equal to 5% of the contract amount in the event that either party defaults in its obligations pursuant to the Hotel Group Agreement.

The Company recognizes revenue under this agreement as its performance obligations under each milestone of the agreement are completed. At November 30, 2018, the Company’s performance obligations of the Phase 1 Period 1 milestone (relating to the RMB 400,000 initial payment) had been completed. At May 31, 2019, the Company has no contract assets or contract liabilities relating to this agreement.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Hong Kong Polytechnic University Project

On January 10, 2018, the Company announced that the Hong Kong Special Administrative Region (“HKSAR”) approved in principle a grant of up to HK$3,018,750 (approximately $386,000) to assist in financing a project entitled “Blockchain-Based Food and Drug Counterfeit Detection and Regulatory System” (“the HKPU Project”) to be jointly developed by UBI Hong Kong and The Hong Kong Polytechnic University (“HKPU”). The related agreement also provides for UBI Hong Kong to contribute up to HK $3,018,750 (approximately $386,000) to the project cost in installments with the first installment of HK$561,198 (approximately $72,000) due upon HKSAR’s signing of the agreement (which occurred on January 5, 2018). UBI Hong Kong, owned and controlled by Tony Liu, is the largest Class A Common Stock shareholder of UBI Blockchain Internet, Ltd., (Delaware). Although the Company does not own or control UBI Hong Kong, UBI Hong Kong entered into an Assignment Agreement with UBI Delaware on May 1, 2018, whereby UBI Hong Kong assigned all of its rights, plans, ideas, tangible assets, intangible assets and intellectual property under the HKPU Project agreement to UBI Delaware, in order for UBI Delaware to commercialize the technology being developed. The project is expected to be completed by November 14, 2019. In a series of two payments made by UBI Hong Kong on January 12, 2018 and January 16, 2018, UBI Hong Kong paid its first installment of a total of HK$561,198 (approximately $72,000) to HKPU. On February 1, 2018, HKSAR paid its first installment of HK $561,198 (approximately $72,000) to HKPU. At this point, the project is progressing on track, and the parties believe the established budget will be sufficient to complete the project.

The agreement also provides for UBI Hong Kong to pay the remaining HK $2,457,552 (approximately $314,000) of its installments as follows: HK $687,934 (approximately $88,000) by April 1, 2018; HK$687,934 (approximately $88,000) by October 1, 2018; HK $687,934 (approximately $88,000) by April 1, 2019 and HK$393,750 (approximately $50,000) within three months of the completion of the HKPU Project. On May 11, 2018, UBI Hong Kong paid HKPU a second installment of HK $643,647 (approximately $82,000). On May 24, 2018, HKSAR also paid HKPU a second installment of HK $643,647 (approximately $82,000). On December 10, 2018, UBI Hong Kong paid HKPU a third installment of HK$ 653,647 (approximately $83,000). On May 10, 2019, UBI Hong Kong paid HKPU a fourth installment of HK$ 766,507 (approximately $98,000), While UBI Hong Kong does not have the financial wherewithal to pay current installments under the agreement as due, Tony Liu has personally agreed and been able to provide funding as necessary for both operations of the Company and obligations due under the agreement.

15

The agreement also provides for the HKSAR to pay the remaining HK $2,457,522 (approximately $314,000) of its installments periodically within 30 days after the acceptance by the Commissioner of Innovation and Technology (“CIT”), an agency of the HKSAR, of certain Progress Reports to be submitted periodically by HKPU. The agreement provides that HKPU should provide CIT the first written Progress Report in a format acceptable to CIT covering from the Commencement Date to August 31, 2018 to be submitted on or before September 30, 2018. The first written progress report was timely submitted by UBI Hong Kong and HKPU to CIT. The agreement imposes no penalties on UBI Hong Kong should it fail to make any of its installment contributions except that HKSAR principally has the right to cease their installment contributions if UBI Hong Kong fails to make its installment contributions. HKSAR may terminate the agreement if UBI Hong Kong fails to make any of its installment contributions. Further, if any of the parties are in breach of the terms of the agreement or fail in a material way to progress in accordance with the Project Proposal, HKPU shall on demand by the government pay to the Government an amount equivalent to the funds or portion thereof released for the Project.

Installment payments to HKPU are charged to research and development expense.

Project Summary

The goal of this project is to provide a comprehensive solution to the worldwide problem of counterfeit medicines. Leveraging latest techniques the team wants to develop a low-cost, scalable, secure system for: (1) Manufacturers to record necessary data of the drugs during their production and transportation; (2) Distributors to trace the drugs; (3) Auditors to inspect all data; and finally (4) Consumers to verify the authenticity of the purchased product. This platform will provide suppliers of food and drug products a safety control system to determine if there was a break in the supply chain. It will identify if a product was substituted with a counterfeit or inferior product. It will help suppliers of perishable food products, reduce spoilage by tracking food shipments in the supply chain to the final consumer.

In February 2018, UBI Hong Kong performed a test at the offices of Guangxi Houde Mega Health Enterprise (“Guangxi”), a medical products company, of the e-commerce “alpha” platform (using simulated test data provided by Guangxi). Guangxi is owned 70% by Star Bright International Investment Enterprise Limited, owner of 5,000,000 shares of Company Class C Common Stock (see Note 7). The test identified some technical issues that needed to be addressed. A second round of tests was performed in July 2018 at Guangxi’s offices and at the offices of three other pharmaceutical companies. In December 2018, the company’s research team made another visit to Guangxi’s offices to prepare for a third round of testing of the company’s latest version of its blockchain tracking platform. The e-commerce platform will provide a digital shared accounting ledger that would make it possible to trace back a product to the very origin of the raw material used.

Once a working model of a platform is successfully operational, the Company plans to license the technology to larger food and drug third party customers, in which case the licensee can use it in accordance with the license agreement; and the Company also intends to provide the technology, when commercial ready, to third party suppliers as a paid service.

The agreement provides that the equipment acquired from the HKPU Project will belong to HKPU, who is also identified as the Beneficiary of the grant for the project and is required to provide CIT with interim and a final accounting for the proceeds of the grant as well as monies advanced by UBI Hong Kong whether the project is successful or not. While HKPU, as the Beneficiary, is provided discretion on how income arising from the intellectual property rights from the Project Materials (including among other things computer software/programs, technical materials, models, documents and materials compiled developed, produced or created by or on behalf of the Beneficiary - the “platform”) and Project Result is to be allocated, UBI Hong Kong is the sole and absolute beneficial owner (has title to) of all of the intellectual property rights which would include the platform if successfully completed under the project.

16

While HKPU receives full legal and equitable title and interest in any and all of the equipment procured by the Beneficiary, the agreement does not discuss whether HKPU can discontinue its own performance in the event that either HKSAR or UBI Hong Kong fail to make the required payments. However, without funding no one would expect that HKPU would be obligated to continue its performance.

The agreement also has a provision whereby the HKSAR can terminate the grant under certain conditions. These conditions include, among other things, ethical misuse of funds received under the grant or violations of other requirements under the grant. This would include UBI Hong Kong’s failure to meet its general financial obligations as due or go into liquidation. In the event of termination, the HKSAR has the right to suspend payment under the grant or require that amounts previously paid by it be refundable under the grant.

The Company expects to use the technology learned from the HKPU Project to help it develop and market a platform system for application to control and manage the safety of food and drugs. Pursuant to an understanding with UBI Hong Kong, the Company is responsible for the installments due and other costs relating to the HKPU Project paid by UBI Hong Kong. These costs are expected to be paid by UBI Hong Kong from loans received from the Company’s CEO Tony Liu. The Company records these costs as research and development expenses and increases in amounts due to Tony Liu until such time as a “technologically feasible” working model of the platform has been successfully produced.

The Company plans to commercialize our blockchain technology, by selling suppliers of food and drug products a blockchain technology platform to track the shipping of their products from its source to the final consumer with tamper-resistant digital records that replaces the current related shipping paperwork. There are two ways we plan to commercialize the technology: 1) to license the technology to third parties, in which case the licensee can use it in accordance with the license agreement; and 2) UBI to provide the technology to third party suppliers (the supplier will pay for each use). The goal is to license our blockchain technology to streamline record-keeping for the food and drug supply chain. We also plan to provide blockchain technology, when commercial ready, to suppliers as a paid service. Our goal is to design a blockchain tracking system that eliminates counterfeit drug products being substituted in the supply chain. And, with regards to food products where lost or delayed shipments causes perishable goods lying in wait to spoil, our blockchain tracking is being designed to help expedite and monitor physical transportation. It is management’s goal to have this technology ready for commercialization soon after the fiscal year ending August 31, 2019.

Management believes that blockchain technology along with the capabilities of tamper resistance products can help bring about new safety standards for the health industry. This makes blockchain technology worthy of our research and investment. It is for this reason management made the decision to establish a company to research and develop blockchain technology. In order to achieve its goals, management is working to design a product tracking system, where every step a product takes in its supply chain is recorded, time-stamped and monitored to protect the integrity of the product(s) being shipped from its source to the final consumer. This is accomplished by tracing the movement of the product from its origin to its final consumer. Utilizing blockchain technology, every time the product moves, its location is recorded and time-stamped, and a shared accounting ledger can be reviewed to determine if there was a break in the supply chain, to see if the product was substituted with a counterfeit or inferior product.

UBI’s business strategy is to incorporate the research and application of blockchain technology, Internet of Things (“IoT”), pharmaceutical and food products, which together, we refer to as IBSH platform. We have hired professional and technical personnel to develop a working platform. With the development and research on the platform, we plan to build a blockchain based safety control system, tentatively named “UBI Security Shield”, with its first application to be used for food and drug safety.

Agreement with Jinzhuan Think Tank (Beijing) International Information Consulting Co., Ltd

On March 15, 2019, the Company executed an agreement with Jinzhuan Think Tank (Beijing) International Information Consulting Co., Ltd. (“Jinzhuan”). The agreement provides for Jinzhuan to arrange for the Company’s sponsorship and participation in a “Belt and Road” Think Tank Cooperation Forum where company representatives are to deliver speeches and for Jinzhuan to introduce the Company to participating government agencies, higher educational institutions, and financial institutions and to provide consulting and referral services to the Company. The agreement also provides for the Company’s payment of a RMB 611,700 (approximately $91,500) fee to Jinzhuan for such services. This fee was paid on March 15, 2019 and charged to other operating expenses.

17

Lease Commitments

In September 2017, UBI Shenzhen entered into two lease agreements for office space in Shenzhen China. The first lease provides for monthly rent of RMB 12,353, or approximately $1,788 per month, and expires September 2020. The second lease provides for monthly rent of RMB 8,964, or approximately $1,297 per month, and expires September 2019.

As of May 31, 2019, the future minimum lease payments under non-cancelable operating leases were:

Year ending May 31, 2020	$	26,644
Year ending May 31, 2021		5,188
Total	$	31,832

For the three and nine months ended May 31, 2019, total rent expense was $29,752 and $96,825, respectively.

For the three and nine months ended May 31, 2018, total rent expense was $25,359 and $65,049, respectively.

Right of Rescission Contingency

The offer and sale of the 25,000,000 Class C Common Shares for the acquisition of UBI Shenzhen may have been in violation of the rules and regulations under the Securities Act and the interpretations of the SEC. The possible violation involves whether the Company conducted a public offering without providing the former UBI Shenzhen shareholders with a registration statement declared effective by the SEC. If a violation of the Section 5 of the Securities Act did in fact occur, anyone who acquired Class C Common Shares at a price based on an evaluation of $0.20 per share would have a right to rescind the purchase. The Securities Act generally requires that any claim brought for a violation of Section 5 of the Securities Act be brought within one year of the violation. If all the shareholders who acquired Class C Common Shares for their exchange in the ownership of UBI Shenzhen demanded rescission within that one-year period and prevailed in their claims, we would have potentially been obligated to repay approximately $5,000,000.

In the opinion of management and company counsel, the likelihood of any of the former UBI Shenzhen shareholders making a claim for a violation of Section 5 of the Securities Act is remote because the effected shareholders are all Chinese citizens who have a close knit relationship with each other and who all voted in favor of the Company’s acquisition of UBI Shenzhen. None of these effected shareholders have made any claim to date and the one-year period that they had to bring a claim expired August 29, 2018.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements. When used in this Quarterly Report on Form 10-Q, the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and similar expressions identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved. Our actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied, by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Important factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Quarterly Report on Form 10-Q. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this Quarterly Report on Form 10-Q, except as required by federal securities laws, we are under no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

In this Quarterly Report on Form 10-Q references to “UBI Blockchain Internet Ltd.,” “JA Energy,” “UBI Blockchain Internet, Ltd., formerly known as JA Energy,” “UBI,” “the Company”, “we,” “us,” and “our” refer to UBI Blockchain Internet Ltd.

Corporate History

The Company was incorporated in Nevada on August 26, 2010, under the name “JA Energy,” as a subsidiary of Reshoot Production Company, a Nevada corporation, incorporated October 31, 2007. In May, 2011, Reshoot Production Company spun off the Company to its shareholders.

From August 2010 to May 2014 the Company was in the business of designing a suite of modular, self-contained, fully automated, climate controlled units for distributed production of energy. While some of these products were proven to be technologically viable, none were ever developed to the point where they were ready for introduction to the marketplace.

In October 2014, pursuant to the terms of an Irrevocable Asset and Liability Exchange Agreement, dated as of October 15, 2014, by and among the Company, James Lusk, Mark DeStefano and T.J. Jesky, the Company transferred all of its assets and liabilities to its wholly owned subsidiary, Peak Energy Holdings, a Nevada corporation (“Peak”) and Peak issued to the Company’s shareholders, one share of Peak common stock for each share of common stock owned in the Company and one share of Peak preferred stock for each share of preferred stock owned in the Company (the “Spin-Off”). Following the Spin-Off, Peak operated as an independent entity separate from the Company with new management. The Spin-Off allowed the Company to explore new business opportunities without the burden of the assets and liabilities on the corporate books.

In September 2016, the Company established its headquarters in Hong Kong, and issued 30,000,000 shares of unregistered restricted Class A Common Stock, 6,000,000 shares of unregistered restricted Class B Voting Common Stock, which carries a voting weight equal to ten (10) Common Shares, and 40,000,000 shares of unregistered restricted Class C Common Stock to UBI Blockchain Internet, LTD (“UBI Hong Kong”), in exchange for $200,000. UBI Hong Kong is beneficially owned and controlled by Tony Liu our CEO and as a result of the transaction UBI Hong Kong and Tony Liu became controlling shareholders of the Company. Thereafter, the Company’s business focus was dedicated to the application of the blockchain technology to safety issues arising out of counterfeit and inferior substitute products and services in the Chinese health industry.

On November 21, 2016, the Company changed its corporate name from JA Energy (“JA”) to UBI Blockchain Internet, LTD, and changed its state of incorporation from the State of Nevada to the State of Delaware pursuant to a plan of conversion about which the Company adopted a new certificate of incorporation under the laws of the State of Delaware after UBI acquired a controlling equity in JA and this transaction was treated as a reverse merger for accounting purposes.

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Acquisition of UBI Shenzhen Cross Border E-commerce Co., formerly, Shenzhen Nova Cross-Border E-commerce, Ltd. (“UBI Shenzhen”)

On May 16, 2017, the Board of Directors of the Company ratified and approved an Acquisition Agreement between the Company and UBI Shenzhen. Under the terms of the Agreement, UBI acquired 100% ownership of UBI Shenzhen in exchange for the issuance to UBI Shenzhen’s shareholders of 25,000,000 shares of UBI unregistered restricted Class C common stock. Upon completion of the acquisition, UBI Shenzhen became a 100% owned subsidiary of UBI.

About UBI Shenzhen

UBI Shenzhen was formed as a private Shenzhen Chinese company on May 26, 2016, under the name Nova Cross-Border E-Commerce, and operates an online store in China selling a wide range of products including maternal and infant products, cosmetics, wine, household goods, digital and luxury products via its Oya Mall, a cross-border e-commerce platform. This website entered into operation in April, 2017.

In April 2018, UBI Shenzhen changed its name from Shenzhen Nova Cross-Border E-commerce, Ltd. to UBI Shenzhen Cross Border E-commerce Co. UBI Shenzhen is registered in Qianhai Free Trade Zone, China. The website changed its name from www.oyamall.com to www.hihealth8.com in April 2018. On September 1, 2018, the website became operational as a marketplace for customers can buy products including, food, non-prescription medicine, skin care products, etc.

UBI Shenzhen’s operations include, but are not limited to:

● Researching and developing business opportunities unique to a Chinese customer base;

● Building corporate infrastructure and administration;

● Integration of multiple technologies and programs;

● Building Business Relationships;

● Human resource staffing;

● Training personnel;

● Equipment procurement;

● Building the corporate website;

● Developing marketing strategies to capitalize on commercialization activities;

● Establishing and maintaining strategic collaborations with product suppliers; and

● Obtaining financing to implement the business activities.

Overview

UBI Blockchain Internet is a company focused on research & development and application of blockchain technology, including the combination of Internet of Things (“IoT”) and other high-tech technologies to health industry issues prevalent in China.

UBI’s business focus on blockchain technology is based on management’s persistent exploration and pursuit of solutions to prevent and eliminate the health industry issues prevalent in China, i.e. the safety issues of products and services caused by counterfeits and inferior substitutes resulting in harm to human lives. Entering the 21st century, with the rise of technology innovation and progress, especially with the emergence of the blockchain technology, our management determined that an opportunity was available to discover and apply blockchain based solutions to the problem of safety and counterfeits in health products and services.

UBI has established a dedicated R&D team, developed in cooperation with the Hong Kong Polytechnic University (HKPU), and has obtained approval from the Hong Kong government for the blockchain project, titled “Blockchain-Based Food and Drug Counterfeit Detection and Regulatory System”, coded as “UIM/331”. Information related to this project is publicly available on Hong Kong Special Administration Region (“HKSAR”)’s official website at http://itf.gov.hk/l-eng/Prj-eng/Prj_Search_Index.asp. At the same time, UBI cooperates with blockchain experts and technical teams from Germany, India and other countries and regions, committed to the development of blockchain and its application in health industry.

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On August 15-16, 2018, UBI together with other founders and sponsors, organized a Global Blockchain Cooperation Alliance Forum at the Company’s Hong Kong Cyberport headquarters. More than 200 people who are blockchain experts, scholars, lawyers, financiers and entrepreneurs, from universities, research institutes, and media from over 20 countries and regions attended the event. UBI introduced and demonstrated the results of its blockchain development and application at the conference, and proposed the concept “2018, the genesis of applied blockchain technology.”

UBI is optimistic about blockchain technology because blockchain is an innovative form of combination of computer skills such as distributed data storage, point-to-point transmission, consistent mechanisms, and encryption algorithms. Owing to its unique characteristics such as being traceable and modification resistant, decentralized and open transparent. Blockchain technology can be used to effectively address the safety and quality issues of products and services in the health industry. Monitored by the technology, the factitious factors are eliminated. The integration of Internet of Things “IoT”, Virtual Reality “VR”, Augmented Reality “AR”, Artificial Intelligence “AI”, and other technologies will greatly improve the application level and effectiveness.

The UBI blockchain system is based on the Ethereum framework and adopts the consortium blockchain (as defined below). This is the first generation and the first product of UBI as well. In early September 2018, the product was introduced to the market for promotion. UBI defines the consortium blockchain as follows: 1. Important product quality data must be stored in the blockchain to ensure its traceability and resistance to modification; 2. Only authorized organizations or individual are allowed to enter product data in the blockchain (characteristics of private chain); 3. Block Data in the blockchain is completely open and accessible to the public (characteristics of public chain). 4. Smart contracts are widely used in application scenarios.

UBI has developed a plan dedicated to the long-term development and application of blockchain technology to the Chinese health care industry. The Company’s goal is to reshape the trust system and innovate the business model for the Chinese health care industry by building the UBI blockchain based Global Health Chain system. This goal has three important parts: the first one is Kang-Chain Network, which will be an internet-based blockchain network capable of worldwide coverage, which we believe will enable connections through the internet between natural persons, medical institutions, and providers of health products and health services. We may also describe it as a value oriented or trust internet, to differentiate it from the current information internet. A trust system, service concept, and value orientation can be built for the safeguard of human lives and health quality from the perspective of super technology and cutting-edge thinking. We believe this future model for health differentiates itself from the current health practice in that it is built on trust and safeguard to provide a professional, targeted, flexible, easy to use, peer to peer, group to group, and safe health world that is writable and readable. We believe that the Kang-Chain Network will connect everyone, regardless the location in the world, to have all one’s needs of health satisfied. We believe that the Kang-Chain Network has the potential to entirely change the health world as it is known to us today. The second part consists of the Kang-Kang-Chain Cloud, which will fundamentally change people’s fear for and concerns about “clouds”. What is more important is that it will protect data privacy with clustered blockchain technology, so as to truly realize the data safety, privacy, permit based share, value, and socialization. Disconnected, and fragmented health data can be active and integrated with a humane premise, hence making it possible a human shared wealth to serve the human health. Kang Chain Cloud establishes a convenient cloud storage, a private safe, and information exchange of health data and information for individuals. The third part is Kang-Chain Community. Exchange and transactions between people used to be simple. However, along with the emergence of residual value, the trust between people started to disappear. People have worked hard to find a mechanism to get the lost trust back. People did not realize that the mechanism they were looking for had deviated from their original intention until today. Peer to peer is forthright and simple. This is exactly one of the essential characteristics of the blockchain technology, and the one that makes the disruption of reality and return to the nature possible. UBI believes the peer to peer business model will replace the current ones, and will work as a catalyst for the new communities and new business models. This also reflects the social progress and development, as well as the new normal of the shared demand, shared value, shared interest, and mutual reliance. The satisfaction between supply and demand featuring the exchange of peer to peer, group to group, and zero distance will naturally make the cost of exchange down to zero, value and speed maximized, and trusted. The innovative Kang Chain Community will be the highlight of the UBI global public health chain. Kang Chain Community is a commercial community formed out of an innovative model based on Kang Chain Network, and Kang Chain Cloud. This is a voluntary consumer community of the new era built on mutual understanding and trusting with their common needs and shared values.

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Industry Trends

Blockchain techniques have shown considerable adaptability in recent years, as various market sectors have sought to find ways of incorporating capabilities into their operations. Especially since 2014, the blockchain began to be applied in the industry and commerce, and the blockchain application has entered a new era in 2018. Previously, the blockchain was mainly applied in the cryptocurrency, which kind of replaced the blockchain to mainly serve the financial industry. However, as the governments of various countries strengthen the supervision of virtual currency, the cryptocurrency circle will be restricted, and the blockchain will play an increasingly important role in industrial applications. Blockchain technology will be widely applied in the future in the fields of finance, medical health, games, copyright, sharing economy, social contact, cloud computing and other fields or industries. It will subvert today’s thinking and social models in many ways.

Application based on blockchain technology

Our management plans to focus its blockchain business on the health industry in China, and give priority to food and pharmaceuticals safety by providing effective technical systems, to prevent counterfeit foods and pharmaceuticals. With the development of blockchain technology, we can trace the entire process of food or pharmaceuticals in an all-round way in the integration of technology clusters such as IoT, VR, AR, AI, and robotics to provide manufacturers and consumers with the maximum symmetrical information exchange throughout the whole manufacturing and logistics process.

We are now in the early stages of blockchain technology, but we believe we have a good understanding of the framework design, the transition between the health industry language and the IT language, and the combination between the blockchain & the IoT and food & pharmaceutical technologies. We believe we are in a leading position and destined to have a bright future of blockchain technology.

Healthcare market

Our management believes that with the improvement of people’s living standards and the growing health awareness, the era of comprehensive health care has arrived. Following the article “Health China 2030” published by China government, we came to further understanding that healthcare, genetic testing, cell storage, precise health management, personal health data storage and analysis are increasingly recognized by humans and will become rigid demands. Traditional health care methods are being subverted. In 2015, “Health in China” was upgraded to China’s national strategy; in 2016, China launched the “Precision Medical Plan” with genetic testing technology as the main means; in 2016, “Health in China Outline 2030” plans to invest 60 billion yuan; in “The Development Plan for Emerging Industries of 2017”, genetic technology is included in National Document No. 1. In the United States, more than 5 million people receive genetic testing every year, creating a profit of 3 billion US dollars; Japan proposed the National Health Plan as early as in 1988 and nowadays the Japanese’s average life expectancy has reached 84 years old. Everybody needs health management. It is estimated that the market scale of China’s health industry will exceed 10 trillion yuan by 2020, according to China National Statistics Bureau.

Opportunities

Blockchain and the IoT are technologies that affect the future and are important ways and means to ensure the safety of health products and health services in the health market. UBI is the first company to enter this market. Being the first one of applying blockchain technology in the health industry will help the company position and develop itself in this field. The access in this market is of high criteria and cost. The ideas and beliefs of the UBI team make us optimistic about the future.

In conclusion, we believe that the global health market has the potential to be huge, not only because it has tremendous market dividends formed by resources that people continuously invest, but also because this market is related to human life and wellness, directly affecting the quality of human life and happiness. Therefore, we will seize the emerging technology of blockchain and the market opportunities at this particular stage, from the perspective of interests as well as the responsibility for human life and wellness, striving for the safety of food and pharmaceuticals and the safety of health services.

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Our Strategy

UBI will firmly and persistently dedicate itself in research, development, application and promotion of the blockchain technology to the health industry in China. We believe that this disruptive technology will profoundly affect the next ten years or even longer and will, in our opinion, benefit all humanity in the health industry. Our mission is to reshape the trust system and innovate the business model with blockchain technology. We will promote the wide application of blockchain technology in the entity industry and commerce, to explore further of the blockchain beyond its characteristics of value transfer.

Our growth strategy depends to a large extent on our ability to bring the products and technical service to potential customers in target markets. We plan to initially target the China market and gradually expand to Europe, the United States and the other countries and regions.

In order to achieve the company’s strategy, UBI has made a market development plan with the following milestones:

● By the end of 2018, the Company further improved the development and promotion of the consortium blockchain product.

● Starting from 2019, the company will develop the “UBI Global Health Public Chain” with full efforts. Our strategic position and product deployment consists of “Kang-Chain Net”, “Kang-Chain Cloud” and “Kang-Chain Community” to create and provide comprehensive security services plan for human health. This plan is to be completed in three years.

● By the end of 2021, it will be fully promoted and applied.

Competitive Advantages

1. Excellent technical team

In its early stage of development, UBI has been cooperating with Hong Kong Polytechnic University (HKPU) and received support from the HKSAR. In this context, a joint effort in research and development participated by enterprises, universities and governments was formed with a competitive advantage. At the same time, we work closely with international blockchain experts and technical teams. We have brought together the advantages of technology and talent.

2. Innovate blockchain application system and products through independent design and development.

The initial design of our blockchain system has firmly grasped the food and drug safety issue, an industry pain point that are widely concerned. The technicians and enterprise personnel cooperated to make analysis and design, optimize various frameworks and solutions from the perspective of the industry chain and supply chain, and has created a unique blockchain traceability system for safety purpose — consortium blockchain product. Meanwhile, we are deploying the UBI global health chain global system based on UBI blockchain technology world widely, in order to create Kang-Chain product group.

3. We have reliable resources in China’s health industry.

In China, UBI’s management has rich experience and resources in the health industry, which can be used for scientific research and development, raw material production bases and other industrial chains. The company’s management is also familiar with the international pharmaceutical market and the food market.

4. A good management team.

Our management, technical team and consulting team are the leading talents and professionals in their fields. They pursue high quality work. They are smart, responsible, charitable and gifted with vision and innovation spirit.

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Target Market

Our current target market is China, where we believe food and pharmaceuticals safety has become a major challenge. Counterfeit food and pharmaceuticals are very common in China, due to natural and man-made factors. Although the safety of food and pharmaceuticals is closely linked to the vital wellness of hundreds of millions of people, we believe that the laws and regulations governing food and pharmaceutical safety in China are not perfect or complete and may not be strictly enforced in many occasions. The occurrence of poison capsule events, vaccine incident, ginkgo leaf, licorice tablets and other major drug dealing and counterfeiting cases, have had serious affects on people’s physical and mental health.

Sources of Income and Pricing

UBI plans to develop a series of blockchain technology based products, such as private blockchain, consortium blockchain and public blockchain which are developed based on different application scenarios and market demands, and as well as the technical system platform. The company generates revenue and profits by providing services and effective products to potential target customers. The price will be determined by the market supply and demand. After initial promotion and marketing, the company’s products and services may have an impact on the existing healthcare industry. Looking ahead, emerging technologies will lead new trends in the health care industry, law enforcement, privacy protection, food and pharmaceuticals safety. UBI will produce good profit by providing specific blockchain solutions and systematic services.

Sales and Marketing

In the future, we will mainly market UBI blockchain system and products through online and offline store. Marketing will also be promoted through cross-border e-commerce platforms. Conference marketing and professional channel marketing will be utilized. Our products and designs also consider the overall needs of human beings and will be tailor-made for some clients. Currently, we are paying attention to the development, formation and demands of China’s “One Belt, One Road” infrastructure initiative.

UBI management believe that UBI’s Global Health Public Blockchain will be our flagship product. On this public blockchain, we not only provide services for health institutions, enterprises, hospitals, etc., but more importantly, our health public blockchain network will connect various communities. In this case, peer-to-peer non-centralized marketing will be realized, which will make marketing faster and lower in cost. Meanwhile, enterprises and consumers can establish a common value on consuming. It will also enable individuals in the community to establish their own health data leger on the public chain, so they can effectively and safely manage their own health data, and become the true manager of their own health. Health data can be used for individuals to improve their own health, and can also be managed to create economic and social benefits through data analysis and appropriate use based on consented and shared value built among community members.

Manufacturing

The Company does not now engage in any manufacturing but may engage in manufacturing of products to be sold on the Company’s website in the future.

Government Regulation

We are or may become subject to a variety of laws and regulations in the State of Delaware, where we are incorporated, the United States and the People’s Republic of China (“PRC”) that involve matters central to our business, including laws and regulations regarding privacy, data protection, data security, data retention, consumer protection, advertising, electronic commerce, intellectual property, manufacturing, anti-bribery and anti-corruption, and economic or other trade prohibitions or sanctions. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws.

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In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data, the scope of which is changing, subject to differing interpretations, and may be inconsistent among different jurisdictions. We strive to comply with all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy, data security, and data protection. However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure to comply with our privacy or security policies or privacy-related legal obligations by us or third-party service-providers or the failure or perceived failure by third-party apps, with which our users choose to share their data, to comply with their privacy policies or privacy-related legal obligations as they relate to the data shared with them, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our brand and operating results.

We plan to develop solutions to ensure that data transfers from the E.U. provide adequate protections to comply with the E.U. Data Protection Directive. If we fail to develop such alternative data transfer solutions, one or more national data protection authorities in the European Union could bring enforcement actions seeking to prohibit or suspend our data transfers to the U.S. and we could also face additional legal liability, fines, negative publicity, and resulting loss of business.

Governments are continuing to focus on privacy and data security and it is possible that new privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business. Any significant change to applicable laws, regulations, or industry practices regarding our users’ data could require us to modify our services and features, possibly in a material manner, and may limit our ability to develop new products, services, and features. Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs.

The labeling, distribution, importation, marketing, and sale of our intended products are subject to extensive regulation by various U.S. state and federal and foreign agencies, including the CPSC, Federal Trade Commission, Food and Drug Administration, or FDA, Federal Communications Commission, and state attorneys general, as well as by various other federal, state, provincial, local, and international regulatory authorities in the countries in which our intended products and services are distributed or sold. If we fail to comply with any of these regulations, we could become subject to enforcement actions or the imposition of significant monetary fines, other penalties, or claims, which could harm our operating results or our ability to conduct our business.

The global nature of our business operations also create various domestic and foreign regulatory challenges and subject us to laws and regulations such as the U.S. Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act, and similar anti-bribery and anti-corruption laws in other jurisdictions, and our intended products are also subject to U.S. export controls, including the U.S. Department of Commerce’s Export Administration Regulations and various economic and trade sanctions regulations established by the Treasury Department’s Office of Foreign Assets Controls. If we become liable under these laws or regulations, we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to discontinue certain products or services, which would negatively affect our business, financial condition, and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits, regulatory proceedings, and legislative proposals could harm our brand or otherwise impact the growth of our business. Any costs incurred as a result of compliance or other liabilities under these laws or regulations could harm our business and operating results.

PRC Government Regulations

Because our business and employees are located in the PRC, our business is also regulated by the national and local laws of the PRC. We believe our conduct of business complies with existing PRC laws, rules and regulations.

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General Regulation of Businesses

We believe we are in material compliance with all applicable labor and safety laws and regulations in the PRC, including the PRC Labor Contract Law, the PRC Production Safety Law, the PRC Regulation for Insurance for Labor Injury, the PRC Unemployment Insurance Law, the PRC Provisional Insurance Measures for Maternity of Employees, PRC Interim Provisions on Registration of Social Insurance, PRC Interim Regulation on the Collection and Payment of Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time.

According to the PRC Labor Contract Law, we are required to enter into labor contracts with our employees. We are required to pay no less than local minimum wages to our employees. We are also required to provide employees with labor safety and sanitation conditions meeting PRC government laws and regulations and carry out regular health examinations of our employees engaged in hazardous occupations. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative and criminal liability in the case of serious violations. In addition, according to the PRC Social Insurance Law, employers like our PRC subsidiaries in China must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance, and housing funds.

Foreign Currency Exchange

The principal regulation governing foreign currency exchange in China is the Foreign Currency Administration Rules (1996), as amended (2008). Under these Rules, RMB is freely convertible for current account items, such as trade and service-related foreign exchange transactions, but not for capital account items, such as direct investment, loan or investment in securities outside China unless the prior approval of, and/or registration with, the State Administration of Foreign Exchange of the People’s Republic of China, or SAFE, or its local counterparts (as the case may be) is obtained.

Pursuant to the Foreign Currency Administration Rules, foreign invested enterprises, or FIEs, in China may purchase foreign currency without the approval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange (subject to a cap approved by SAFE) to satisfy foreign exchange liabilities or to pay dividends. In addition, if a foreign company acquires a subsidiary in China, the acquired company will also become an FIE. However, the relevant PRC government authorities may limit or eliminate the ability of FIEs to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside China are still subject to limitations and require approvals from, and/or registration with, SAFE.

Employees

We have 18 full-time employees and we engage the services 47 non-employee contractors. Within our workforce, 8 employees are engaged in product and business development and 10 employees are engaged in finance, human resources, facilities, information technology and general management and administration. We have no collective bargaining agreements with our employees and we have not experienced any work stoppages. We consider our relationship with our employees to be good.

Property

The Company owns no real property. Our administrative offices are located at: SmartSpace 3F, Level 9, Unit 908, 100 Cyberport Rd., Hong Kong, People’s Republic of China., telephone: (212) 372-8836. The Company has been using this Hong Kong office space provided by UBI Hong Kong at a cost to the Company equal to UBI Hong Kong’s monthly rent of 22,100 Hong Kong Dollars (approximately $2,825 at the November 30, 2018 exchange rate). UBI Hong Kong owns 30,000,000 shares of the Company’s Class A common stock, 6,000,000 shares of the Company’s Class B common stock; and 40,000,000 shares of the Company’s C common stock.

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Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Three Months Ended May 31, 2019 Compared to Three Months Ended May 31, 2018

Revenues

There was no revenue during the three-month periods ended May 31, 2019 and 2018.

Expenses

Operating Expenses:	2019		2018		Changes in $			Changes in %
Employee compensation	$	250,247	$	180,980	$	69,267			38	%
Consulting fees (including stock-based compensation of $123,333 and $185,000 , respectively)		123,333		185,000		(61,667	)		-33	%
Professional fees		95,230		61,280		33,950			55	%
Research and development		97,695		86,717		10,978			13	%
Occupancy		29,752		25,359		4,393			17	%
Depreciation and amortization		10,061		6,697		3,364			50	%
Other		162,716		28,898		133,818			463	%
Total Operating Expenses	$	769,034	$	574,931	$	194,103			34	%

For the three months ended May 31, 2019, the total operating expenses was $769,034, an increase of $194,103, or 34% as compared to $574,931 for the same period in 2018. Among the increased operating expenses in 2019: employee compensation was $250,247, an increase of $69,267, or 38%, compared to $180,980 in 2018; professional fees was $95,230, an increase of $33,950, or 55%, compared to $61,280 in 2018; research and development cost was $97,695, an increase of $10,978, or 13%, compared to $86,717 in 2018; occupancy cost was $29,752, an increase of $4,393, or 17%, compared to $25,359 in 2018; depreciation and amortization expenses were $10,061, an increase of $3,364, or 50%, compared to $6,697 in 2018; other operating expenses was $162,716, an increase of $133,818, or 463%, compared to $28,898 in 2018, which resulted from a conference cost of $135,905 incurred in 2019.

The increase in operating expenses was offset by a decrease in stock-based consulting expense in the three months ended May 31, 2019. The stock-based consulting expense was $123,333, a decrease of $61,667, or 33%, compared to $185,000 in 2018. As of May 31, 2019, all unrecognized compensation costs were recognized, which were related to shares of Class A common stock issued to a consultant pursuant to a Consulting Agreement dated April 28, 2017 and shares of Class C common stock issued to 7 employees and 38 consultants pursuant to service agreements dated on April 3, 2017.

In January 2018, May 2018, December 2018, and May 2019, the Company through UBI Hong Kong paid $71,779, $82,382, $83,374, and $97,770, respectively to the HKPU Project. The Company charged these payments as research and development expenses. The Company will continue to charge future HKPU Project payments as R&D expense until such time as a “technologically feasible” working model of the platform has been successfully produced.

For the three months ended May 31, 2019, the interest expense accrued for loans from Tony Liu was $51,173, an increase of $27,149, or 113%, compared to $24,024 in the three months ended May 31, 2018, which resulted from the increased loan balance due Mr. Liu. As of May 31, 2019, loans payable to Mr. Liu amounted to $3,181,634.

Net Loss

For the three months ended May 31, 2019, the Company had a net loss of $820,181 or $(0.01) per share of Class A, Class B and Class C common stock and compared to a loss of $599,112 or $(0.01) per share of Class A, Class B and Class C common stock for the same period of 2018.

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Nine Months Ended May 31, 2019 Compared to Nine Months Ended May 31, 2018

Revenues

During the nine-month period ended May 31, 2019, the Company recognized $113,278 revenue from development agreements and the Company had no revenues in 2018.

Expenses

Operating Expenses:	2019		2018		Changes in $			Changes in %
Employee compensation (including stock-based compensation of $0 and $96,668 respectively)	$	674,924	$	641,036	$	33,888			5	%
Consulting fees (including stock-based compensation of $493,333 and $1,018,333, respectively)		493,333		1,023,383		(530,050	)		-52	%
Professional fees (including stock-based compensation of $0 and $335,872, respectively)		203,850		454,152		(250,302	)		-55	%
Research and development		220,941		158,496		62,445			39	%
Occupancy		96,825		65,049		31,776			49	%
Depreciation and amortization		28,843		11,021		17,822			162	%
Other		309,910		100,392		209,518			209	%
Total Operating Expenses	$	2,028,626	$	2,453,529	$	(424,903	)		-17	%

For the nine months ended May 31, 2019, the total operating expenses was $2,028,626, a decrease of $424,903, or 17% as compared to $2,453,529 for the same period in 2018. The decrease in operating expenses was primarily due to the reduction in stock-based consulting and professional fees in 2019. For the nine months ended May 31, 2019, stock-based consulting expense was $493,333, a decrease of $525,000, or 52%, compared to $1,018,333 in 2018; stock-based professional fees was $0 in the nine months ended May 31, 2019, a decrease of $335,872, compared to $335,872 in 2018. As of May 31, 2019, all unrecognized compensation costs were recognized, which were related to shares of Class A common stock issued to a consultant pursuant to a Consulting Agreement dated April 28, 2017 and shares of Class C common stock issued to 7 employees and 38 consultants pursuant to service agreements dated on April 3, 2017.

During nine months ended May 31, 2019, employee compensation was $674,924, an increase of $33,888, or 5%, compared to $641,036 in 2018; research and development cost was $220,941, an increase of $62,445, or 39%, compared to $158,496 in 2018; occupancy cost was $96,825, an increase of $31,776, or 49%, compared to $65,049 in 2018; depreciation and amortization expenses were $28,843, an increase of $17,822, or 162%, compared to $11,021 in 2018; other operating expenses was $309,910, an increase of $209,518, or 209%, compared to $100,392 in 2018, which resulted from a conference cost of $135,905 incurred in 2019.

In January 2018, May 2018, December 2018, and May 2019, the Company through UBI Hong Kong paid $71,779, $82,382, $83,374, and $97,770, respectively to the HKPU Project. The Company charged this payment as research and development expenses. The Company will continue to charge future HKPU Project payments as R&D expense until such time as a “technologically feasible” working model of the platform has been successfully produced.

For the Nine months ended May 31, 2019, the interest expense accrued for loans from Tony Liu was $128,122, an increase of $75,253, or 142%, compared to $52,869 in the Nine months ended May 31, 2018, which resulted from the increased loan balance due Mr. Liu. As of May 31, 2019, loans payable to Mr. Liu amounted to $3,181,634.

28

Net Loss

For the Nine months ended May 31, 2019, the Company had a net loss of $2,043,557 or $(0.02) per share of Class A, Class B and Class C common stock and compared to a loss of $2,506,613 or $(0.02) per share of Class A and Class C common stock for the same period of 2018.

Going Concern

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. At May 31, 2019, the Company had cash of $60,328 and current liabilities of $3,623,003. For the nine months ended May 31, 2019, the Company incurred a net loss of $2,043,557. According to US GAAP, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. However, our major shareholder, who has been funding our operations in the past, has agreed to continue doing so when the Company does not generate sufficient revenue to cover its costs of operations. The Company does not have any debt other than good faith loans from the major shareholder.

The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company.

The accompanying condensed unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

Liquidity and Capital Resources

As of May 31, 2019, the Company has total assets of $209,345 consisting of cash $60,328, inventory of $23,205, deposit and prepaid expenses of $19,938, office equipment of $2,786 and intangible assets of $103,088. Total liabilities are $3,623,003 as of May 31, 2019. The Company has been continuously investing in the research and development of blockchain systems and platforms. We will evaluate such investment when appropriate, in the belief that considerable values can be created.

The Company started to generate income from project development in the quarter ended November 30, 2018. Working capital for the business has been provided by Tony Liu, the majority shareholder of the Company. The Company has limited financial resources available, which has had an adverse impact on the Company’s liquidity, activities and operations. These limitations have adversely affected the Company’s ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. In order for the Company to remain a Going Concern it will need to find additional capital. Additional working capital may be sought through additional debt or equity private placements, additional notes payable to banks or related parties (officers, directors or stockholders), or from other available funding sources at market rates of interest, or a combination of these. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is sought. No assurances can be given that any necessary financing can be obtained on terms favorable to the Company, or at all.

Off-Balance Sheet Arrangements

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 or operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

Revenue Recognition: We recognize revenue from services and product sales once all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonable assured.

29

New Accounting Standards

Management has evaluated recently issued accounting pronouncements through July 12, 2019 and concluded that they will not have a material effect on future financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the SEC, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the quarterly period covered by this report. Based on such evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

Item 1 — Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A — Risk Factors

See Risk Factors set forth in Part I, Item 1A of the Company’s Annual Report on 10-K for the fiscal year ended August 31, 2018 and the discussion in Item 2 of Part I above, under “Liquidity and Capital Resources.”

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

None.

Item 3 — Defaults Upon Senior Securities

None.

Item 4 — Mine Safety Disclosures

None.

Item 5 — Other Information

None

Item 6 — Exhibits

Exhibit Number	Description of Document
31.1	Certifications of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal 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 this Quarterly Report on Form 10-Q for the quarter ended May 31, 2019, formatted in XBRL (eXtensible Business Reporting Language):
	(1) Balance Sheets at May 31, 2019 (Unaudited) and August 31, 2018 (Audited).
	(2) Unaudited Statements of Operations for the three month and nine-month periods ended May 31, 2019 and 2018.
	(3) Unaudited Statements of Stockholders’ Deficit for the nine months ended May 31, 2019 and May 31, 2018.
	(4) Unaudited Statements of Cash Flows for the nine month periods ended May 31, 2019 and 2018.
	(5) Notes to the financial statements (Unaudited).

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UBI Blockchain Internet, Ltd. Registrant
Date: July 12, 2019	By:	/s/ Tony Liu
	Name:	Tony Liu
		Principal Executive Officer
Date: July 12, 2019	By:	/s/ Chan Cheung
	Name:	Chan Cheung
		Principal Accounting Officer

32

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tony Liu, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of UBI Blockchain Internet, Ltd.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 12, 2019

/s/ Tony Liu

Tony Liu, Chairman, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chan Cheung, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of UBI Blockchain Internet, Ltd.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 12, 2019

/s/ Chan Cheung

Chan Cheung, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of UBI Blockchain Internet, Ltd. (the “Company”) on Form 10-Q for the quarter ended May 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tony Liu, Chief Executive Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
(ii)	The information contained the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

Date: July 12, 2019

	/s/ Tony Liu
Name:	Tony Liu
Title:	Chairman, Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of UBI Blockchain Internet, Ltd. (the “Company”) on Form 10-Q for the quarter ended May 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chan Cheung, Chief Financial Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
(ii)	The information contained the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

Date: July 12, 2019

	/s/ Chan Cheung
Name:	Chan Cheung
Title:	Chief Financial Officer
	(Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	May 31, 2019	Jul. 12, 2019
Entity Registrant Name	UBI Blockchain Internet LTD-DE
Entity Central Index Key	0001500242
Document Type	10-Q
Document Period End Date	May 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Shell Company	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019
Class A Common Stock [Member]
Entity Common Stock, Shares Outstanding		30,799,046
Class B Common Stock [Member]
Entity Common Stock, Shares Outstanding		6,000,000
Class C Common Stock [Member]
Entity Common Stock, Shares Outstanding		73,550,000

XML

Condensed Consolidated Balance Sheets - USD ($)	May 31, 2019	Aug. 31, 2018
Current Assets
Cash	$ 60,328	$ 23,434
Inventory	23,205	23,448
Current portion of prepaid stock-based salaries and consulting fees		493,333
Deposit and prepaid expenses	19,938	18,093
Total Current Assets	103,471	558,308
Office equipment, net of accumulated depreciation	2,786	9,359
Other Assets
Intangible assets, net of accumulated amortization	103,088	127,037
Total Other Assets	103,088	127,037
Total Assets	209,345	694,704
Current liabilities:
Accounts payable and accrued liabilities	222,278	151,405
Due to related party	3,400,725	1,923,599
Total current liabilities	3,623,003	2,075,004
Total liabilities	3,623,003	2,075,004
Stockholders' Equity (Deficit):
Additional paid in capital	7,841,571	7,841,571
Stock subscription payable	90,521	90,521
Accumulated other comprehensive income	35,250	25,051
Accumulated deficit	(11,491,349)	(9,447,792)
Total stockholders' equity (deficit)	(3,413,658)	(1,380,300)
Total liabilities and Stockholders' Equity (Deficit)	209,345	694,704
Class A Common Stock [Member]
Stockholders' Equity (Deficit):
Common stock, value	30,799	30,799
Class B Common Stock [Member]
Stockholders' Equity (Deficit):
Common stock, value	6,000	6,000
Class C Common Stock [Member]
Stockholders' Equity (Deficit):
Common stock, value	$ 73,550	$ 73,550

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	May 31, 2019	Aug. 31, 2018	May 24, 2017	Nov. 21, 2016	Sep. 26, 2016
Class A Common Stock [Member]
Common stock, par value	$ 0.001	$ 0.001			$ 0.001
Common stock, shares authorized	1,000,000,000	1,000,000,000	1,000,000,000	130,000,000
Common stock, shares issued	30,799,046	30,799,046
Common stock, shares outstanding	30,799,046	30,799,046
Class B Common Stock [Member]
Common stock, par value	$ 0.001	$ 0.001			0.001
Common stock, shares authorized	500,000,000	500,000,000	500,000,000	6,000,000
Common stock, shares issued	6,000,000	6,000,000
Common stock, shares outstanding	6,000,000	6,000,000
Class C Common Stock [Member]
Common stock, par value	$ 0.001	$ 0.001			$ 0.001
Common stock, shares authorized	500,000,000	500,000,000	500,000,000	64,000,000
Common stock, shares issued	73,550,000	73,550,000
Common stock, shares outstanding	73,550,000	73,550,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	May 31, 2019	May 31, 2018	May 31, 2019	May 31, 2018
Income Statement [Abstract]
Revenue			$ 113,278
Operating Expenses:
Employee compensation (including stock-based compensation of $0,$0, $0, and $96,668 respectively)	250,247	180,980	674,924	641,036
Consulting fees (including stock-based compensation of $123,333, $185,000, $493,333 and $1,018,333, respectively)	123,333	185,000	493,333	1,023,383
Professional fees (including stock-based compensation of $0, $0, $0 and $335,872, respectively)	95,230	61,280	203,850	454,152
Research and development	97,695	86,717	220,941	158,496
Occupancy	29,752	25,359	96,825	65,049
Depreciation and amortization	10,061	6,697	28,843	11,021
Other	162,716	28,898	309,910	100,392
Total Operating Expenses	769,034	574,931	2,028,626	2,453,529
Loss from Operations	(769,034)	(574,931)	(1,915,348)	(2,453,529)
Other Income (Expenses)
Interest expense - related party	(51,173)	(24,024)	(128,122)	(52,869)
Interest income	37		120
(Loss) gain on foreign currency exchange	(11)	(157)	(207)	(215)
Total Other Income (Expenses) - net	(51,147)	(24,181)	(128,209)	(53,084)
Net Loss	(820,181)	(599,112)	(2,043,557)	(2,506,613)
Other comprehensive income (loss):
Foreign exchange translation adjustment	25,523	6,415	10,199	(1,084)
Comprehensive Loss	$ (794,658)	$ (592,697)	$ (2,033,358)	$ (2,507,697)
Net Loss per share of Class A, Class B, and Class C Common Stock, Basic and Diluted	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Weighted Average Number of Class A, Class B, and Class C Common Shares, Basic and Diluted	110,349,046	110,199,046	110,349,046	110,189,700

XML

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	May 31, 2019	May 31, 2018	May 31, 2019	May 31, 2018
Stock - based compensation			$ 493,333	$ 1,018,333
Employee Compensation [Member]
Stock - based compensation	$ 0	$ 0	0	96,668
Consulting Fees [Member]
Stock - based compensation	123,333	185,000	493,333	1,018,333
Professional Fees [Member]
Stock - based compensation	$ 0	$ 0	$ 0	$ 335,872

XML

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)	Preferred Stock [Member]	Class A Common Stock [Member]	Class B Common Stock [Member]	Class C Common Stock [Member]	Additional Paid-In Capital [Member]	Stock Subscription Payable [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Aug. 31, 2017		$ 30,717	$ 6,000	$ 73,400	$ 7,475,931	$ 90,521	$ (6,343,426)	$ 75	$ 1,333,218
Balance, shares at Aug. 31, 2017		30,717,046	6,000,000	73,400,000
Class A common stock issued to four individuals associated with the Company's former law firm - October 2, 2017		$ 82			335,790				335,872
Class A common stock issued to four individuals associated with the Company's former law firm - October 2, 2017, shares		82,000
Foreign currency translation adjustment								(1,084)	(1,084)
Net loss							(2,506,613)		(2,506,613)
Balance at May. 31, 2018		$ 30,799	$ 6,000	$ 73,400	7,811,721	90,521	(8,850,039)	(1,009)	(838,607)
Balance, shares at May. 31, 2018		30,799,046	6,000,000	73,400,000
Balance at Aug. 31, 2017		$ 30,717	$ 6,000	$ 73,400	7,475,931	90,521	(6,343,426)	75	1,333,218
Balance, shares at Aug. 31, 2017		30,717,046	6,000,000	73,400,000
Class A common stock issued to four individuals associated with the Company's former law firm - October 2, 2017		$ 82			335,790				335,872
Class A common stock issued to four individuals associated with the Company's former law firm - October 2, 2017, shares		82,000
Class C common stock issued for consulting services - August 30, 2018				$ 150	29,850				30,000
Class C common stock issued for consulting services - August 30, 2018, shares				150,000
Foreign currency translation adjustment								24,976	24,976
Net loss							(3,104,366)		(3,104,366)
Balance at Aug. 31, 2018		$ 30,799	$ 6,000	$ 73,550	7,841,571	90,521	(9,447,792)	25,051	(1,380,300)
Balance, shares at Aug. 31, 2018		30,799,046	6,000,000	73,550,000
Balance at May. 31, 2018		$ 30,799	$ 6,000	$ 73,400	7,811,721	90,521	(8,850,039)	(1,009)	(838,607)
Balance, shares at May. 31, 2018		30,799,046	6,000,000	73,400,000
Balance at Aug. 31, 2018		$ 30,799	$ 6,000	$ 73,550	7,841,571	90,521	(9,447,792)	25,051	(1,380,300)
Balance, shares at Aug. 31, 2018		30,799,046	6,000,000	73,550,000
Foreign currency translation adjustment								10,199	10,199
Net loss							(2,043,557)		(2,043,557)
Balance at May. 31, 2019		$ 30,799	$ 6,000	$ 73,550	$ 7,841,571	$ 90,521	$ (11,491,349)	$ 35,250	$ (3,413,658)
Balance, shares at May. 31, 2019		30,799,046	6,000,000	73,550,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	May 31, 2019	May 31, 2018
Cash Flows from Operating Activities
Net Loss	$ (2,043,557)	$ (2,506,613)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization expense	28,843	11,021
Stock-based compensation - employees		96,668
Stock-based compensation - consulting fees	493,333	1,018,333
Stock-based compensation - professional fees		335,872
Changes in operating assets and liabilities:
Increase in inventory		(24,806)
Increase in deposit and prepaid expense	(2,055)	(3,659)
Increase in accounts payable and accrued liabilities	71,032	41,966
Increase in interest payable to related party	128,123	52,796
Net cash used by operating activities	(1,324,281)	(978,422)
Cash Flows from investing activities
Website and software development costs		(20,114)
Purchase of office equipment		(9,302)
Net cash used by investing activities		(29,416)
Cash Flows from financing activities
Advance from related party	1,361,014	1,047,943
Net cash provided by financing activities	1,361,014	1,047,943
Effect of exchange rate on cash	161	(265)
Net Increase in Cash	36,894	39,840
Cash and cash equivalents at beginning of period	23,434	15,405
Cash and cash equivalents at end of period	60,328	55,245
Supplemental Cash Flow Information:
Income taxes paid
Interest paid

XML

About the Company

9 Months Ended

May 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

About the Company

NOTE 1 – ABOUT THE COMPANY

Organization and Capitalization of the Company

The Company was organized August 26, 2010 (Date of Inception) under the laws of the State of Nevada, as JA Energy. The Company was incorporated as a subsidiary of Reshoot Production Company, a Nevada corporation. Reshoot Production Company was incorporated October 31, 2007. In November 2014, Reshoot dividended its shares of JA Energy to the then stockholders of Reshoot. On November 21, 2016, the Company reincorporated in Delaware under the name UBI Blockchain Internet Ltd.

On September 15, 2016, the Company, with the approval of the Board of Directors agreed to issue 30,000,000 shares of unregistered restricted Class A Common Stock, 6,000,000 shares of unregistered restricted Class B Voting Common Stock, which carries a voting weight equal to ten (10) Common Shares, and 40,000,000 shares of unregistered restricted Class C Common Stock to UBI Blockchain Internet, LTD (“UBI Hong Kong”), a Hong Kong company, or assigns in exchange for $200,000. On September 26, 2016, pursuant to NRS 78.1955, the Board of Directors approved the filing of a Certificate of Designation with the Nevada Secretary of State to designate Class A, B and C common shares, par value $0.001. Concurrently with the filing of this Certificate of Designation, all Common Stock issued and outstanding became Class A Common Stock. Class B Common Stock carries a voting weight equal to ten (10) Common Shares. The Class B shares can be converted into fully paid and non-assessable Common Shares, on a one-to-one basis, at the option of the holder at any time upon written notice to the Company and its authorized transfer agent. Class C Common Stock has no voting or conversion rights.

On October 7, 2016, the 30,000,000 Class A shares and 6,000,000 Class B shares were issued.

On November 21, 2016, the Company reincorporated in Delaware under the name UBI Blockchain Internet Ltd. and increased the number of authorized shares from 75,000,000 to 200,000,000 shares consisting of 130,000,000 authorized shares of Class A Common Stock, 6,000,000 authorized shares of Class B Common Stock and 64,000,000 authorized shares of Class C Common Stock. On March 1, 2017, the 40,000,000 shares of Class C common stock were issued. All of the preceding shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and were issued under Regulation S to one (1) foreign entity who attested it is an accredited investor who is not a citizen or a resident of the USA.

On January 3, 2017, the Company appointed four new directors, accepted the resignations of its two former directors and appointed Tony Liu (who controls UBI Hong Kong) as Chief Executive Officer of the Company.

Commencing in the three months ended February 28, 2017, the Company started research activities in Hong Kong relating to “blockchain” technology planned to be provided for future customers.

On March 1, 2017, the Company issued 40,000,000 shares of Class C common stock to our chief executive officer Tony Liu pursuant to the September 15, 2016 agreement (see above).

On April 3, 2017, the Company issued a total of 8.400,000 shares of Class C common stock to a total of 45 contractor employees and nonemployees (see Note 7).

On May 1, 2017, the Company issued 500,000 restricted shares of Class A common stock to an independent consultant for consulting services to be performed for the Company (see Note 7).

On May 24, 2017, the Company increased the number of authorized common shares from 200,000,000 shares to 2,000,000,000 shares (1,000,000,000 shares of Class A common stock, 500,000,000 shares of Class B common stock, and 500,000,000 shares of Class C common stock).

On August 29, 2017, upon the approval of the acquisition by the related PRC authorities, the Company issued a total of 25,000,000 shares of Class C common stock to shareholders of Shenzhen Nova E-commerce, Ltd. (“Nova”) in exchange for control of the business of Nova (see Notes 4 and 7). On April 7, 2018, Nova changed its name to UBI Shenzhen Cross Border E- Commerce Co., Ltd. (“UBI Shenzhen”).

Current Company Operations

UBI Blockchain Internet Ltd. (“UBI Delaware”) was reincorporated in Delaware on November 21, 2016 for the purpose of entering into the blockchain technology business. UBI Blockchain Internet, Ltd (“UBI Hong Kong”) was organized in the Hong Kong Special Administrative Region (the “HKSAR”) in September 2016 to facilitate local financing participations. UBI Delaware opened a bank account at Abacus Federal Savings Bank in New York City. This bank account is funded by Tony Liu and is used to pay Company invoices from the U.S. UBI Hong Kong has a bank account at China Citic Bank International in Hong Kong, which is also funded by Tony Liu; this account makes disbursements relating to UBI Delaware operations in Hong Kong (such as payroll, rent, and other office expenses). UBI Hong Kong is owned and controlled by Tony Liu, CEO of UBI Delaware. UBI Hong Kong owns 30,000,000 (97%) of the 30,799,046 issued and outstanding shares of UBI Delaware Class A common stock at May 31, 2019. UBI Hong Kong has no other assets and no business operations of its own.

In December 2016, UBI Delaware engaged the services of 8 full time employees to principally work in its blockchain technology business. In January 2018, UBI Hong Kong executed an agreement with the HKSAR and The Hong Kong Polytechnic University to complete a project related to blockchain technology (see Note 11).

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Going Concern

9 Months Ended

May 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

NOTE 2 - GOING CONCERN

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. At May 31, 2019, the Company had cash of $60,328 and current liabilities of $3,623,003. For the nine months ended May 31, 2019, the Company incurred a net loss of $2,043,557. According to US GAAP, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. However, our major shareholder, who has been funding our operations in the past, has agreed to continue doing so when the Company does not generate sufficient revenue to cover its costs of operations. The Company does not have any debt other than good faith loans from the major shareholder.

The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company.

The accompanying condensed unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

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Significant Accounting Policies

9 Months Ended

May 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The consolidated balance sheet of the Company at the end of the preceding fiscal year has been derived from the audited balance sheet and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 and is presented herein for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for all period presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the respective full years.

Certain footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 filed with the SEC on December 7, 2018.

Basis of Accounting

The accompanying condensed unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of UBI Blockchain Internet Ltd. and its wholly owned subsidiary UBI Shenzhen Cross Border E-Commerce Co., Ltd, (“UBI Shenzhen”), formerly Shenzhen Nova E-commerce, Ltd. (“Nova”) from the date of acquisition of Nova on August 29, 2017 (see Note 4). All intercompany balances and transactions have been eliminated in consolidation.

Earnings per Share

The basic earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the weighted average number of Class A, Class B and Class C common shares issued and outstanding during the period. The diluted earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the diluted weighted average number of Class A, Class B and Class C shares outstanding during the period. The diluted weighted average number of Class A, Class B and Class C shares outstanding is the basic weighted average number of Class A, Class B, and Class C shares adjusted as of the first day of the period for any potentially dilutive debt or equity (none for the periods presented).

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash and cash equivalents.

Of the $60,328 cash at May 31, 2019, $45,388 was held in foreign bank accounts not insured by FDIC.

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

Inventory

Inventory, consisting of finished goods purchased from third parties, are stated at the lower of cost (first-in, first-out method) or market.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line basis over the estimated useful lives of the respective assets. Expenditures for repairs and maintenance are expensed as incurred.

Intangible Assets

Intangible assets, including website development costs, software acquired to be marketed, and office software, are carried at cost less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated economic lives of the respective assets (5 years for website development costs and 5 years for the software acquired to be marketed and 2 years for the office software).

Software development costs include payments made to independent software developers under development agreements, as well as direct costs incurred for internally developed products. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product requires both technical design documentation and game design documentation, or the completed and tested product design and a working model. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established and the evaluation is performed on a product-by-product basis. For products where proven technology exists, this may occur early in the development cycle. Software development costs related to hosted service revenue arrangements are capitalized after the preliminary project phase is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Prior to a product’s release, if and when we believe capitalized costs are not recoverable, we expense the amounts. Capitalized costs for products that are canceled or are expected to be abandoned are expensed in the period of cancellation. Amounts related to software development which are not capitalized are charged immediately to “Research and development”.

Foreign Currency Translation

The reporting currency and functional currency of the Company is the United States Dollar.

The functional currency of UBI Shenzhen is the Chinese Renminbi (“RMB”). Assets and liabilities of UBI Shenzhen are translated into United States dollars at period-end exchange rates ($1.00 = 6.9092 RMB at May 31, 2019 and $1.00 = 6.8375 RMB at August 31, 2018). UBI Shenzhen revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 6.8264 RMB for the nine months ended May 31, 2019 and $1.00 = 6.5282 RMB for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

The functional currency of UBI HK is the Hong Kong Dollar (“HK$”). Assets and liabilities of UBI HK are translated into United States dollars at period-end exchange rates ($1.00 = 7.8430 HK$ at May 31, 2019 and $1.00 = 7.8494 HK$ at August 31, 2018). UBI HK revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 7.8399 HK$ for the nine months ended May 31, 2019 and $1.00 = 7.8130 HK$ for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant for the three and nine months ended May 31, 2019 and 2018, were reflected in income.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Revenue recognition

The Company recognizes revenue from services and product sales once all the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services or products have been delivered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonably assured.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation - Stock Compensation,” which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company does not have an employee stock option plan.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock issued to consultants and other non-employees. In accordance with ASC Topic 505-50, the stock issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the stock, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to expense over the period during which services are rendered.

Year end

The Company’s fiscal year-end is August 31.

Related Parties

Related parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.

Recent Accounting Pronouncements

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

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Acquisition of UBI Shenzhen Cross Border E-commerce Co., Ltd (Formerly Nova E-commerce, Ltd.)

9 Months Ended

May 31, 2019

Business Combinations [Abstract]

Acquisition of UBI Shenzhen Cross Border E-commerce Co., Ltd (Formerly Nova E-commerce, Ltd.)

NOTE 4 – ACQUISITION OF UBI SHENZHEN CROSS BORDER E-COMMERCE CO., LTD (FORMERLY NOVA E-COMMERCE, LTD.)

On August 29, 2017, pursuant to an Acquisition Agreement dated May 16, 2017, the Company acquired 100% ownership of UBI Shenzhen Cross Border E-Commerce Co., Ltd. (“UBI Shenzhen”), formerly Shenzhen Nova E-commerce, Ltd. (“Nova”), in exchange for 25,000,000 shares of Company Class C common stock. UBI Shenzhen is a Shenzhen Chinese corporation which was incorporated on May 26, 2016. UBI Shenzhen plans on operating an online store in China selling a wide range of products.

The acquisition has been accounted for as a recapitalization transaction in the accompanying condensed unaudited consolidated financial statements. Accordingly, the financial position and results of operations of UBI Shenzhen prior to the August 29, 2017 date of acquisition have been excluded from the accompanying condensed unaudited consolidated financial statements.

The carrying values of the assets and liabilities of UBI Shenzhen at the August 29, 2017 date of acquisition consisted of:

Cash	$	-
Office equipment, net		13,628
Website development costs		92,035
Total assets		105,663
Accounts payable and accrued liabilities		24,651
Due to related party		135,865
Total liabilities		160,516
Excess of liabilities over assets	$	54,853

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Prepaid Stock Based Salaries and Consulting Fees

9 Months Ended

May 31, 2019

Prepaid Stock Based Salaries And Consulting Fees

Prepaid Stock Based Salaries and Consulting Fees

NOTE 5 – PREPAID STOCK BASED SALARIES AND CONSULTING FEES

Prepaid stock-based salaries and consulting fees at May 31, 2019 and August 31, 2018 consist of:

	Fair value of stock issuance (Note 6)		Prepaid balance at May 31, 2019		Prepaid balance at August 31, 2018
1,450,000 shares of Class C common stock issued to 7 employees on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective employees with a service term of one year expiring December 31, 2017	$	290,000	$	-	$	-
6,950,000 shares of Class C common stock issued to 38 consultants on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective consultants with a service term of one year expiring December 31, 2017		1,390,000		-		-
500,000 shares of Class A common stock issued to a consultant on May 1, 2017 pursuant to Consulting Agreement dated April 28, 2017 between UBI Delaware and the respective consultant with a service term of two years expiring April 30, 2019		1,480,000		-		493,333
Total	$	3,160,000		-		493,333
Current portion				-		(493,333	)
Non-current portion			$	-	$	-

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Intangible Assets

9 Months Ended

May 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 6 – INTANGIBLE ASSETS

Intangible assets at May 31, 2019 and August 31, 2018 consist of:

	May 31, 2019			August 31, 2018
Website development costs	$	92,977		$	93,952
Accumulated amortization		(25,041	)		(11,278	)
Website development costs, net		67,936			82,674
Software acquired to be marketed		36,907			37,294
Accumulated amortization		(5,603	)		-
Software acquired to be marketed, net		31,304			37,294
Office software		8,395			8,483
Accumulated amortization		(4,547	)		(1,414	)
Office software, net		3,848			7,069
Total intangible assets - net	$	103,088		$	127,037

At May 31, 2019, the expected future amortization expense of the intangible assets was:

Years ending	Amount
May 31, 2020	$	29,824
May 31, 2021		25,976
May 31, 2022		24,043
May 31, 2023		18,595
May 31, 2024		4,650
Total	$	103,088

Website Development Costs

In January 2018, UBI Shenzhen changed the domain name for its website from www.oyamall.com to www.hihealth8.com. The change was made to, among other things, correct certain technical problems which we experienced in testing potential transactions involving Chinese currency. UBI Shenzhen’s website became operational on March 12, 2018.

UBI Shenzhen has yet to generate any revenues from its website. In order for UBI Shenzhen to begin its business operations, UBI Shenzhen will be selling third party products. In the future, management plans to develop its own products for sale. It was a management decision to acquire UBI Shenzhen for primarily two business reasons: 1) as a separate subsidiary, once UBI Shenzhen is fully operational, management anticipates it should generate revenues and profit for the Company; and 2) this acquisition provides a test model to utilize the blockchain technology the Company is developing to track drug products sold by UBI Shenzhen. As a test model, this will allow the Company to see if the products sold through its website are substituted with counterfeit products before they reach the final consumer. In other words, products sold through a third-party consumer will be tracked using the Company’s blockchain technology to see if there is a break in the supply chain. This will take place once the Company develops its blockchain digital tracking system. The Company will be able to monitor UBI Shenzhen shipments to the final consumer to determine if there has been any tampering with shipments in the supply chain.

UBI Shenzhen employs two people principally involved in website related creation/maintenance activities. UBI Shenzhen’s expenses are being funded by loans from Tony Liu.

Software Acquired to be Marketed

On November 24, 2017, January 17, 2018 and March 15, 2018, UBI Shenzhen executed agreements with a third-party vendor to produce customized game software called Farmer Game for a total of RMB 285,000 ($41,682 using the August 31, 2018 exchange rate). UBI Shenzhen expects to use the Farmer Game to attract more visitors to its website and to potentially earn revenues from users’ use of game points to purchase products sold on the website. Farmer Game is expected to be introduced to website visitors in the near future.

In the year ended August 31, 2018, UBI Shenzhen paid the Farmer Game vendor a total of RMB 285,000 ($41,682), of which RMB 30,000 ($4,388) was expensed and RMB 255,000 ($37,294) was capitalized.

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Stockholders' Equity

9 Months Ended

May 31, 2019

Equity [Abstract]

Stockholders' Equity

NOTE 7 - STOCKHOLDERS’ EQUITY

Pursuant to the September 15, 2016 change in control agreement (see Note 1), a representative of UBI paid into an attorney trust account $150,000 on September 14, 2016 and $67,500 on October 11, 2016, for a total of $217,500. The $217,500 consisted of $200,000 for the newly issued shares of Class A, Class B Voting, and Class C Common Stock and $17,500 for the payment of specific expenses.

Starting in December 2016, the Company engaged the services of a total of 45 employees and non-employees to perform certain marketing, research and development and investor relations services. The related agreements, which were executed in March 2017, provided for the contractors to work for the Company for terms ranging from September 2016 to January 1, 2017 to December 31, 2017 for compensation including the issuance of a total of 8,400,000 shares of Class C common stock (which occurred April 3, 2017). Of the 8,400,000 shares, 5,000,000 shares were issued to Star Bright International Investment Enterprise Limited, 100,000 shares were issued to the Company’s chief financial officer and 500,000 shares were issued to an independent Director of the Company.

The $1,680,000 estimated fair value of the 8,400,000 shares of Class C common stock (using a price of $0.20 per share) was recorded as prepaid expenses and was expensed evenly over the year ended December 31, 2017 (see Note 5). For the nine months ended May 31, 2019 and 2018, we recognized stock-based employee compensation of $0 and $96,668, respectively and recognized stock-based consulting fees expense of $0 and $463,333, respectively, from these agreements.

On May 1, 2017, the Company issued 500,000 restricted shares of Class A common stock to a consultant pursuant to a Consulting Agreement dated April 28, 2017 with a service term of two years expiring April 30, 2019. The $1,480,000 estimated fair value of the 500,000 shares of Class A common stock (using a price of $2.96 per share based on a $3.95 closing trading price on April 28, 2017 less a 25% restricted stock discount) was recorded as a prepaid expense and was expensed evenly over the 2-year service period expiring April 30, 2019. For the year ended August 31, 2018, we recognized stock-based consulting fees expense of $740,000 from this agreement. For the nine months ended May 31, 2019 and 2018, we recognized stock-based consulting fees expense of $493,333 and $555,000, respectively, from this agreement.

On August 29, 2017, upon the regulatory approval of the transfer of Nova’s Hong Kong business license to the Company, the Company acquired 100% ownership of Nova in exchange for the Company’s issuance of a total of 25,000,000 shares of Class C common stock to the 130 owners of Nova.

On October 2, 2017, the Company issued a total of 82,000 restricted shares of Class A common stock to 4 individuals associated with the Company’s law firm for legal services rendered. The $335,872 estimated fair value of the 82,000 shares of Class A common stock (using a price of $4.10 per share based on a $5.12 closing trading price on October 2, 2017 less a 20% restricted stock discount) was expensed in the three months ended November 30, 2017.

On December 26, 2017, the Company’s Board of Directors approved a 3 for 1 common stock dividend of the Company’s issued and outstanding Class A and Class B common stock. On January 2, 2018, the Company was advised by FINRA to resubmit its request as a forward stock split instead of a stock dividend.

On January 4, 2018, the Company’s Board of Directors approved a 4 for 1 forward stock split for holders of record on January 10, 2018 of the Company’s issued and outstanding shares of Class A and Class B common stock. For each share of Class A common stock held, stockholders were to receive an additional 3 shares of Class A common stock, For each share of Class B common stock held, stockholders were to receive an additional 3 shares of Class B common stock. On January 18, 2018, the Company’s Board of Directors decided to cancel the proposed 4-for-1 forward stock split.

On January 5, 2018, the Securities and Exchange Commission announced the temporary suspension of trading in the Company’s securities from January 8, 2018 to January 22, 2018 because of (i) questions regarding the accuracy of assertions, since at least September 2017, by the Company in filings with the Commission regarding the Company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the Company’s Class A common stock since at least November 2017.

On March 31, 2018, the Company’s Board of Directors approved issuing 150,000 Class C common unregistered restricted shares to Global Alliance Securities for consulting services. 150,000 Class C common shares were issued on August 30, 2018. The $30,000 estimated fair value of the 150,000 shares of Class C common stock (using a price of $0.20 per share) was expensed in the three months ended August 31, 2018.

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Related Party Transactions

9 Months Ended

May 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 8 - RELATED PARTY TRANSACTIONS

Commencing March 2017, the Company has been using office space provided by an affiliate of UBI Blockchain Internet, LTD. (Hong Kong) (“UBI Hong Kong”) at a monthly rent of 22,100 Hong Kong Dollars (approximately $2,818 at the May 31, 2019 exchange rate) per month. For expediency reasons, the Company also uses bank accounts in the name of UBI Hong Kong to collect cash receipts and expend cash disbursements relating to Company operations. UBI Hong Kong owns 30,000,000 shares of the Company’s Class A common stock.

During the three and nine months ended May 31, 2019, Tony Liu, chief executive officer of the Company, advanced or paid a total of $557,703 and $1,361,014, respectively, of expenditures on behalf of the Company. As of May 31, 2019, the total principal amount due to Tony Liu was $3,181,634. The amount due to Tony Liu for these expenditures is interest bearing at a rate of 7% per annum. $51,173 and $24,024 interest expense was accrued for the three months ended May 31, 2019 and 2018, respectively. $128,122 and $52,869 interest expense was accrued for the nine months ended May 31, 2019 and 2018, respectively. As of May 31, 2019, accrued interest amounted to $219,091. The advances and related accrued interest are due on demand.

Included in accounts payable and accrued liabilities at May 31, 2019 and August 31, 2018 is accrued salary due to Tony Liu, chief executive officer, $51,000 and $62,744, respectively.

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Provision for Income Taxes

9 Months Ended

May 31, 2019

Income Tax Disclosure [Abstract]

Provision for Income Taxes

NOTE 9 - PROVISION FOR INCOME TAXES

The Company accounts for income taxes under FASB Accounting Standard Codification ASC 740 “Income Taxes”. ASC 740 requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

As of May 31, 2019 and August 31, 2018, the Company had net operating loss carry forwards of approximately $4,433,000 and $2,883,000, respectively, as follows:

Tax Jurisdiction	May 31, 2019		August 31, 2018
United States	$	1,543,000	$	1,296,000
Hong Kong		1,631,000		855,000
China (UBI Shenzhen)		1,259,000		732,000
Total	$	4,433,000	$	2,883,000

United States net operating losses prior to 2018 may be carried forward to reduce future years taxable income for 20 years; United States net operating losses after 2017 may be carried forward indefinitely. Hong Kong net operating losses may be carried forward indefinitely. China net operating losses may be carried forward for 5 years. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization has not been determined likely to occur. Also, United States tax laws limit the amount at loss available to be offset against future taxable income when a substantial change in ownership occurs.

At May 31, 2019 and August 31, 2018, deferred tax assets consisted of:

	May 31, 2019			August 31, 2018
Net operating loss carry forwards	$	907,919		$	587,617
Valuation allowance		(907,919	)		(587,617	)
Deferred tax assets - net	$	-		$	-

As a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, the United States corporate income tax rate was reduced from 35% to 21% effective January 1, 2018. Accordingly, we reduced our deferred income tax asset relating to our United States net operating loss carryforward (and the valuation allowance thereon) by approximately $166,000 on December 31, 2017.

All tax years remain subject to examination by the respective tax authorities.

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Development Agreements

9 Months Ended

May 31, 2019

Development Agreements

Development Agreements

NOTE 10 - DEVELOPMENT AGREEMENTS

The Brewing Company Agreement

In August 2018, the Company entered into a development agreement, by and among the Company, Heilongjiang Province TongFangZhuoXin Brewing Co., Ltd. (the “Brewing Company”) and Global Blockchain Cooperation Alliance, dated August 26, 2018 (the “Brewing Company Agreement”). Pursuant to the terms of the Brewing Company Agreement, the Company agreed to provide to the Brewing Company blockchain based technology and software for the management of the Brewing Company’s manufacturing process. In exchange for the services and technology provided by the Company, the Brewing Company agreed to pay to the Company a total of RMB 7,000,000 (approximately $1,007,808), which is payable over the term of the Brewing Company Agreement in a series of milestone payments. The Company received the initial payment of RMB 400,000 (RMB 388,350 net of tax or approximately $56,223) on September 30, 2018. The balance is payable in a series of 8 payments ranging from RMB 300,000 (approximately $43,192) to RMB 1,500,000 (approximately $215,959) from time to time as each milestone is completed over a period of 27 months, with the final payment being due on or before December 31, 2020. Any disputes between the parties are to be submitted to the Beijing International Arbitration Center. The Brewing Company Agreement provides for a breach penalty in an amount equal to 5% of the contract amount in the event that either party defaults in its obligations pursuant to the Brewing Company Agreement.

The Company recognizes revenue under this agreement as its performance obligations under each milestone of the agreement are completed. At November 30, 2018, the Company’s performance obligations of the Phase 1 Period 1 milestone (relating to the RMB 400,000 initial payment) had been completed. At May 31, 2019, the Company has no contract assets or contract liabilities relating to this agreement.

The Hotel Group Agreement

In August 2018, the Company entered into a development agreement, by and between the Company and Harbin Madieer Hotel Group Co., Ltd. (the “Hotel Group”), dated August 26, 2018 (the “Hotel Group Agreement”). Pursuant to the terms of the Hotel Group Agreement, the Company agreed to provide to the Hotel Group a blockchain based system for hotel management. In exchange for the services and technology provided by the Company, the Hotel Group agreed to pay to the Company a total of RMB 1,000,000 (approximately $143,973) which is payable over the term of the Hotel Group Agreement in a series of milestone payments. The initial payment of RMB 400,000 (RMB $388,350 net of tax or approximately $56,222) was received on November 12, 2018. The balance is payable in a series of 2 payments of RMB 300,000 (approximately $43,192) from time to time as each milestone is completed, over a period of 11 months, with the final payment being due on or before July 31, 2019. Any disputes between the parties are to be submitted to the Beijing International Arbitration Agency or a People’s Court of the Hotel Group’s location. The Hotel Group Agreement provides for a breach penalty in an amount equal to 5% of the contract amount in the event that either party defaults in its obligations pursuant to the Hotel Group Agreement.

The Company recognizes revenue under this agreement as its performance obligations under each milestone of the agreement are completed. At November 30, 2018, the Company’s performance obligations of the Phase 1 Period 1 milestone (relating to the RMB 400,000 initial payment) had been completed. At May 31, 2019, the Company has no contract assets or contract liabilities relating to this agreement.

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Commitments and Contingencies

9 Months Ended

May 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Hong Kong Polytechnic University Project

On January 10, 2018, the Company announced that the Hong Kong Special Administrative Region (“HKSAR”) approved in principle a grant of up to HK$3,018,750 (approximately $386,000) to assist in financing a project entitled “Blockchain-Based Food and Drug Counterfeit Detection and Regulatory System” (“the HKPU Project”) to be jointly developed by UBI Hong Kong and The Hong Kong Polytechnic University (“HKPU”). The related agreement also provides for UBI Hong Kong to contribute up to HK $3,018,750 (approximately $386,000) to the project cost in installments with the first installment of HK$561,198 (approximately $72,000) due upon HKSAR’s signing of the agreement (which occurred on January 5, 2018). UBI Hong Kong, owned and controlled by Tony Liu, is the largest Class A Common Stock shareholder of UBI Blockchain Internet, Ltd., (Delaware). Although the Company does not own or control UBI Hong Kong, UBI Hong Kong entered into an Assignment Agreement with UBI Delaware on May 1, 2018, whereby UBI Hong Kong assigned all of its rights, plans, ideas, tangible assets, intangible assets and intellectual property under the HKPU Project agreement to UBI Delaware, in order for UBI Delaware to commercialize the technology being developed. The project is expected to be completed by November 14, 2019. In a series of two payments made by UBI Hong Kong on January 12, 2018 and January 16, 2018, UBI Hong Kong paid its first installment of a total of HK$561,198 (approximately $72,000) to HKPU. On February 1, 2018, HKSAR paid its first installment of HK $561,198 (approximately $72,000) to HKPU. At this point, the project is progressing on track, and the parties believe the established budget will be sufficient to complete the project.

The agreement also provides for UBI Hong Kong to pay the remaining HK $2,457,552 (approximately $314,000) of its installments as follows: HK $687,934 (approximately $88,000) by April 1, 2018; HK$687,934 (approximately $88,000) by October 1, 2018; HK $687,934 (approximately $88,000) by April 1, 2019 and HK$393,750 (approximately $50,000) within three months of the completion of the HKPU Project. On May 11, 2018, UBI Hong Kong paid HKPU a second installment of HK $643,647 (approximately $82,000). On May 24, 2018, HKSAR also paid HKPU a second installment of HK $643,647 (approximately $82,000). On December 10, 2018, UBI Hong Kong paid HKPU a third installment of HK$ 653,647 (approximately $83,000). On May 10, 2019, UBI Hong Kong paid HKPU a fourth installment of HK$ 766,507 (approximately $98,000), While UBI Hong Kong does not have the financial wherewithal to pay current installments under the agreement as due, Tony Liu has personally agreed and been able to provide funding as necessary for both operations of the Company and obligations due under the agreement.

The agreement also provides for the HKSAR to pay the remaining HK $2,457,522 (approximately $314,000) of its installments periodically within 30 days after the acceptance by the Commissioner of Innovation and Technology (“CIT”), an agency of the HKSAR, of certain Progress Reports to be submitted periodically by HKPU. The agreement provides that HKPU should provide CIT the first written Progress Report in a format acceptable to CIT covering from the Commencement Date to August 31, 2018 to be submitted on or before September 30, 2018. The first written progress report was timely submitted by UBI Hong Kong and HKPU to CIT. The agreement imposes no penalties on UBI Hong Kong should it fail to make any of its installment contributions except that HKSAR principally has the right to cease their installment contributions if UBI Hong Kong fails to make its installment contributions. HKSAR may terminate the agreement if UBI Hong Kong fails to make any of its installment contributions. Further, if any of the parties are in breach of the terms of the agreement or fail in a material way to progress in accordance with the Project Proposal, HKPU shall on demand by the government pay to the Government an amount equivalent to the funds or portion thereof released for the Project.

Installment payments to HKPU are charged to research and development expense.

Project Summary

The goal of this project is to provide a comprehensive solution to the worldwide problem of counterfeit medicines. Leveraging latest techniques the team wants to develop a low-cost, scalable, secure system for: (1) Manufacturers to record necessary data of the drugs during their production and transportation; (2) Distributors to trace the drugs; (3) Auditors to inspect all data; and finally (4) Consumers to verify the authenticity of the purchased product. This platform will provide suppliers of food and drug products a safety control system to determine if there was a break in the supply chain. It will identify if a product was substituted with a counterfeit or inferior product. It will help suppliers of perishable food products, reduce spoilage by tracking food shipments in the supply chain to the final consumer.

In February 2018, UBI Hong Kong performed a test at the offices of Guangxi Houde Mega Health Enterprise (“Guangxi”), a medical products company, of the e-commerce “alpha” platform (using simulated test data provided by Guangxi). Guangxi is owned 70% by Star Bright International Investment Enterprise Limited, owner of 5,000,000 shares of Company Class C Common Stock (see Note 7). The test identified some technical issues that needed to be addressed. A second round of tests was performed in July 2018 at Guangxi’s offices and at the offices of three other pharmaceutical companies. In December 2018, the company’s research team made another visit to Guangxi’s offices to prepare for a third round of testing of the company’s latest version of its blockchain tracking platform. The e-commerce platform will provide a digital shared accounting ledger that would make it possible to trace back a product to the very origin of the raw material used.

Once a working model of a platform is successfully operational, the Company plans to license the technology to larger food and drug third party customers, in which case the licensee can use it in accordance with the license agreement; and the Company also intends to provide the technology, when commercial ready, to third party suppliers as a paid service.

The agreement provides that the equipment acquired from the HKPU Project will belong to HKPU, who is also identified as the Beneficiary of the grant for the project and is required to provide CIT with interim and a final accounting for the proceeds of the grant as well as monies advanced by UBI Hong Kong whether the project is successful or not. While HKPU, as the Beneficiary, is provided discretion on how income arising from the intellectual property rights from the Project Materials (including among other things computer software/programs, technical materials, models, documents and materials compiled developed, produced or created by or on behalf of the Beneficiary - the “platform”) and Project Result is to be allocated, UBI Hong Kong is the sole and absolute beneficial owner (has title to) of all of the intellectual property rights which would include the platform if successfully completed under the project.

While HKPU receives full legal and equitable title and interest in any and all of the equipment procured by the Beneficiary, the agreement does not discuss whether HKPU can discontinue its own performance in the event that either HKSAR or UBI Hong Kong fail to make the required payments. However, without funding no one would expect that HKPU would be obligated to continue its performance.

The agreement also has a provision whereby the HKSAR can terminate the grant under certain conditions. These conditions include, among other things, ethical misuse of funds received under the grant or violations of other requirements under the grant. This would include UBI Hong Kong’s failure to meet its general financial obligations as due or go into liquidation. In the event of termination, the HKSAR has the right to suspend payment under the grant or require that amounts previously paid by it be refundable under the grant.

The Company expects to use the technology learned from the HKPU Project to help it develop and market a platform system for application to control and manage the safety of food and drugs. Pursuant to an understanding with UBI Hong Kong, the Company is responsible for the installments due and other costs relating to the HKPU Project paid by UBI Hong Kong. These costs are expected to be paid by UBI Hong Kong from loans received from the Company’s CEO Tony Liu. The Company records these costs as research and development expenses and increases in amounts due to Tony Liu until such time as a “technologically feasible” working model of the platform has been successfully produced.

The Company plans to commercialize our blockchain technology, by selling suppliers of food and drug products a blockchain technology platform to track the shipping of their products from its source to the final consumer with tamper-resistant digital records that replaces the current related shipping paperwork. There are two ways we plan to commercialize the technology: 1) to license the technology to third parties, in which case the licensee can use it in accordance with the license agreement; and 2) UBI to provide the technology to third party suppliers (the supplier will pay for each use). The goal is to license our blockchain technology to streamline record-keeping for the food and drug supply chain. We also plan to provide blockchain technology, when commercial ready, to suppliers as a paid service. Our goal is to design a blockchain tracking system that eliminates counterfeit drug products being substituted in the supply chain. And, with regards to food products where lost or delayed shipments causes perishable goods lying in wait to spoil, our blockchain tracking is being designed to help expedite and monitor physical transportation. It is management’s goal to have this technology ready for commercialization soon after the fiscal year ending August 31, 2019.

Management believes that blockchain technology along with the capabilities of tamper resistance products can help bring about new safety standards for the health industry. This makes blockchain technology worthy of our research and investment. It is for this reason management made the decision to establish a company to research and develop blockchain technology. In order to achieve its goals, management is working to design a product tracking system, where every step a product takes in its supply chain is recorded, time-stamped and monitored to protect the integrity of the product(s) being shipped from its source to the final consumer. This is accomplished by tracing the movement of the product from its origin to its final consumer. Utilizing blockchain technology, every time the product moves, its location is recorded and time-stamped, and a shared accounting ledger can be reviewed to determine if there was a break in the supply chain, to see if the product was substituted with a counterfeit or inferior product.

UBI’s business strategy is to incorporate the research and application of blockchain technology, Internet of Things (“IoT”), pharmaceutical and food products, which together, we refer to as IBSH platform. We have hired professional and technical personnel to develop a working platform. With the development and research on the platform, we plan to build a blockchain based safety control system, tentatively named “UBI Security Shield”, with its first application to be used for food and drug safety.

Agreement with Jinzhuan Think Tank (Beijing) International Information Consulting Co., Ltd

On March 15, 2019, the Company executed an agreement with Jinzhuan Think Tank (Beijing) International Information Consulting Co., Ltd. (“Jinzhuan”). The agreement provides for Jinzhuan to arrange for the Company’s sponsorship and participation in a “Belt and Road” Think Tank Cooperation Forum where company representatives are to deliver speeches and for Jinzhuan to introduce the Company to participating government agencies, higher educational institutions, and financial institutions and to provide consulting and referral services to the Company. The agreement also provides for the Company’s payment of a RMB 611,700 (approximately $91,500) fee to Jinzhuan for such services. This fee was paid on March 15, 2019 and charged to other operating expenses.

Lease Commitments

In September 2017, UBI Shenzhen entered into two lease agreements for office space in Shenzhen China. The first lease provides for monthly rent of RMB 12,353, or approximately $1,788 per month, and expires September 2020. The second lease provides for monthly rent of RMB 8,964, or approximately $1,297 per month, and expires September 2019.

As of May 31, 2019, the future minimum lease payments under non-cancelable operating leases were:

Year ending May 31, 2020	$	26,644
Year ending May 31, 2021		5,188
Total	$	31,832

For the three and nine months ended May 31, 2019, total rent expense was $29,752 and $96,825, respectively.

For the three and nine months ended May 31, 2018, total rent expense was $25,359 and $65,049, respectively.

Right of Rescission Contingency

The offer and sale of the 25,000,000 Class C Common Shares for the acquisition of UBI Shenzhen may have been in violation of the rules and regulations under the Securities Act and the interpretations of the SEC. The possible violation involves whether the Company conducted a public offering without providing the former UBI Shenzhen shareholders with a registration statement declared effective by the SEC. If a violation of the Section 5 of the Securities Act did in fact occur, anyone who acquired Class C Common Shares at a price based on an evaluation of $0.20 per share would have a right to rescind the purchase. The Securities Act generally requires that any claim brought for a violation of Section 5 of the Securities Act be brought within one year of the violation. If all the shareholders who acquired Class C Common Shares for their exchange in the ownership of UBI Shenzhen demanded rescission within that one-year period and prevailed in their claims, we would have potentially been obligated to repay approximately $5,000,000.

In the opinion of management and company counsel, the likelihood of any of the former UBI Shenzhen shareholders making a claim for a violation of Section 5 of the Securities Act is remote because the effected shareholders are all Chinese citizens who have a close knit relationship with each other and who all voted in favor of the Company’s acquisition of UBI Shenzhen. None of these effected shareholders have made any claim to date and the one-year period that they had to bring a claim expired August 29, 2018.

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Significant Accounting Policies (Policies)

9 Months Ended

May 31, 2019

Accounting Policies [Abstract]

Interim Financial Statements

Interim Financial Statements

The consolidated balance sheet of the Company at the end of the preceding fiscal year has been derived from the audited balance sheet and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 and is presented herein for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for all period presented, have been made. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the respective full years.

Certain footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2018 filed with the SEC on December 7, 2018.

Basis of Accounting

Basis of Accounting

The accompanying condensed unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of UBI Blockchain Internet Ltd. and its wholly owned subsidiary UBI Shenzhen Cross Border E-Commerce Co., Ltd, (“UBI Shenzhen”), formerly Shenzhen Nova E-commerce, Ltd. (“Nova”) from the date of acquisition of Nova on August 29, 2017 (see Note 4). All intercompany balances and transactions have been eliminated in consolidation.

Earnings Per Share

Earnings per Share

The basic earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the weighted average number of Class A, Class B and Class C common shares issued and outstanding during the period. The diluted earnings (loss) per share of Class A, Class B and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C common shareholders by the diluted weighted average number of Class A, Class B and Class C shares outstanding during the period. The diluted weighted average number of Class A, Class B and Class C shares outstanding is the basic weighted average number of Class A, Class B, and Class C shares adjusted as of the first day of the period for any potentially dilutive debt or equity (none for the periods presented).

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash and cash equivalents.

Of the $60,328 cash at May 31, 2019, $45,388 was held in foreign bank accounts not insured by FDIC.

Use of Estimates

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

Inventory

Inventory

Inventory, consisting of finished goods purchased from third parties, are stated at the lower of cost (first-in, first-out method) or market.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line basis over the estimated useful lives of the respective assets. Expenditures for repairs and maintenance are expensed as incurred.

Intangible Assets

Intangible Assets

Intangible assets, including website development costs, software acquired to be marketed, and office software, are carried at cost less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated economic lives of the respective assets (5 years for website development costs and 5 years for the software acquired to be marketed and 2 years for the office software).

Software development costs include payments made to independent software developers under development agreements, as well as direct costs incurred for internally developed products. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product requires both technical design documentation and game design documentation, or the completed and tested product design and a working model. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established and the evaluation is performed on a product-by-product basis. For products where proven technology exists, this may occur early in the development cycle. Software development costs related to hosted service revenue arrangements are capitalized after the preliminary project phase is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Prior to a product’s release, if and when we believe capitalized costs are not recoverable, we expense the amounts. Capitalized costs for products that are canceled or are expected to be abandoned are expensed in the period of cancellation. Amounts related to software development which are not capitalized are charged immediately to “Research and development”.

Foreign Currency Translation

Foreign Currency Translation

The reporting currency and functional currency of the Company is the United States Dollar.

The functional currency of UBI Shenzhen is the Chinese Renminbi (“RMB”). Assets and liabilities of UBI Shenzhen are translated into United States dollars at period-end exchange rates ($1.00 = 6.9092 RMB at May 31, 2019 and $1.00 = 6.8375 RMB at August 31, 2018). UBI Shenzhen revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 6.8264 RMB for the nine months ended May 31, 2019 and $1.00 = 6.5282 RMB for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

The functional currency of UBI HK is the Hong Kong Dollar (“HK$”). Assets and liabilities of UBI HK are translated into United States dollars at period-end exchange rates ($1.00 = 7.8430 HK$ at May 31, 2019 and $1.00 = 7.8494 HK$ at August 31, 2018). UBI HK revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 7.8399 HK$ for the nine months ended May 31, 2019 and $1.00 = 7.8130 HK$ for the nine months ended May 31, 2018). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant for the three and nine months ended May 31, 2019 and 2018, were reflected in income.

Income Taxes

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Revenue Recognition

Revenue recognition

The Company recognizes revenue from services and product sales once all the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services or products have been delivered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonably assured.

Stock-based Compensation

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation - Stock Compensation,” which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company does not have an employee stock option plan.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock issued to consultants and other non-employees. In accordance with ASC Topic 505-50, the stock issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the stock, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to expense over the period during which services are rendered.

Year End

Year end

The Company’s fiscal year-end is August 31.

Related Parties

Related Parties

Related parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

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Acquisition of UBI Shenzhen Cross Border E-commerce Co., Ltd (Formerly Nova E-commerce, Ltd.) (Tables)

9 Months Ended

May 31, 2019

Business Combinations [Abstract]

Schedule of Business Acquisition of Assets and Liabilities

The carrying values of the assets and liabilities of UBI Shenzhen at the August 29, 2017 date of acquisition consisted of:

Cash	$	-
Office equipment, net		13,628
Website development costs		92,035
Total assets		105,663
Accounts payable and accrued liabilities		24,651
Due to related party		135,865
Total liabilities		160,516
Excess of liabilities over assets	$	54,853

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Prepaid Stock Based Salaries and Consulting Fees (Tables)

9 Months Ended

May 31, 2019

Prepaid Stock Based Salaries And Consulting Fees

Schedule of Prepaid Stock-based Salaries and Consulting Fees

Prepaid stock-based salaries and consulting fees at May 31, 2019 and August 31, 2018 consist of:

	Fair value of stock issuance (Note 6)		Prepaid balance at May 31, 2019		Prepaid balance at August 31, 2018
1,450,000 shares of Class C common stock issued to 7 employees on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective employees with a service term of one year expiring December 31, 2017	$	290,000	$	-	$	-
6,950,000 shares of Class C common stock issued to 38 consultants on April 3, 2017 pursuant to service agreements between UBI Delaware and the respective consultants with a service term of one year expiring December 31, 2017		1,390,000		-		-
500,000 shares of Class A common stock issued to a consultant on May 1, 2017 pursuant to Consulting Agreement dated April 28, 2017 between UBI Delaware and the respective consultant with a service term of two years expiring April 30, 2019		1,480,000		-		493,333
Total	$	3,160,000		-		493,333
Current portion				-		(493,333	)
Non-current portion			$	-	$	-

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Intangible Assets (Tables)

9 Months Ended

May 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets at May 31, 2019 and August 31, 2018 consist of:

	May 31, 2019			August 31, 2018
Website development costs	$	92,977		$	93,952
Accumulated amortization		(25,041	)		(11,278	)
Website development costs, net		67,936			82,674
Software acquired to be marketed		36,907			37,294
Accumulated amortization		(5,603	)		-
Software acquired to be marketed, net		31,304			37,294
Office software		8,395			8,483
Accumulated amortization		(4,547	)		(1,414	)
Office software, net		3,848			7,069
Total intangible assets - net	$	103,088		$	127,037

Schedule of Expected Future Amortization Expense of Website Development Costs

At May 31, 2019, the expected future amortization expense of the intangible assets was:

Years ending	Amount
May 31, 2020	$	29,824
May 31, 2021		25,976
May 31, 2022		24,043
May 31, 2023		18,595
May 31, 2024		4,650
Total	$	103,088

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Provision for Income Taxes (Tables)

9 Months Ended

May 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Net Operating Loss Carry Forwards

Tax Jurisdiction	May 31, 2019		August 31, 2018
United States	$	1,543,000	$	1,296,000
Hong Kong		1,631,000		855,000
China (UBI Shenzhen)		1,259,000		732,000
Total	$	4,433,000	$	2,883,000

Schedule of Deferred Tax Assets

At May 31, 2019 and August 31, 2018, deferred tax assets consisted of:

	May 31, 2019			August 31, 2018
Net operating loss carry forwards	$	907,919		$	587,617
Valuation allowance		(907,919	)		(587,617	)
Deferred tax assets - net	$	-		$	-

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Commitments and Contingencies (Tables)

9 Months Ended

May 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases

As of May 31, 2019, the future minimum lease payments under non-cancelable operating leases were:

Year ending May 31, 2020	$	26,644
Year ending May 31, 2021		5,188
Total	$	31,832

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About the Company (Details Narrative)									3 Months Ended	12 Months Ended
	Aug. 30, 2018 shares	Oct. 02, 2017 shares	Aug. 29, 2017 shares	May 01, 2017 shares	Apr. 03, 2017 Integer shares	Mar. 02, 2017 shares	Oct. 07, 2016 shares	Sep. 15, 2016 USD ($) shares	Aug. 31, 2018 $ / shares shares	Dec. 31, 2017 shares	May 31, 2019 $ / shares shares	May 24, 2017 shares	Nov. 21, 2016 shares	Sep. 26, 2016 $ / shares
Common stock conversion shares value | $								$ 200,000
Minimum [Member]
Common stock, shares authorized													75,000,000
Minimum [Member] | Board of Directors [Member]
Common stock, shares authorized												200,000,000
Maximum [Member]
Common stock, shares authorized													200,000,000
Maximum [Member] | Board of Directors [Member]
Common stock, shares authorized												2,000,000,000
Class A Common Stock [Member]
Unregistered restricted shares issued								30,000,000
Common stock, par value | $ / shares									$ 0.001		$ 0.001			$ 0.001
Number of shares issued							30,000,000
Common stock, shares authorized									1,000,000,000		1,000,000,000	1,000,000,000	130,000,000
Common stock, shares outstanding									30,799,046		30,799,046
Common stock, shares issued									30,799,046		30,799,046
Class A Common Stock [Member] | UBI Delaware [Member]
Common stock, shares outstanding											30,799,046
Common stock, shares issued											30,799,046
Class A Common Stock [Member] | UBI Hong Kong [Member]
Common stock, shares outstanding											30,000,000
Ownership percentage											97.00%
Class A Common Stock [Member] | Restricted Stock [Member]
Stock issued during period, shares, issued for services		82,000
Class A Common Stock [Member] | Independent Consultant [Member] | Restricted Stock [Member]
Stock issued during period, shares, issued for services				500,000
Class B Common Stock [Member]
Unregistered restricted shares issued								6,000,000
Common stock voting rights								Which carries a voting weight equal to ten (10) Common Shares
Common stock, par value | $ / shares									$ 0.001		$ 0.001			0.001
Number of shares issued							6,000,000
Common stock, shares authorized									500,000,000		500,000,000	500,000,000	6,000,000
Common stock, shares outstanding									6,000,000		6,000,000
Common stock, shares issued									6,000,000		6,000,000
Class C Common Stock [Member]
Unregistered restricted shares issued								40,000,000
Common stock, par value | $ / shares									$ 0.001		$ 0.001			$ 0.001
Number of shares issued						40,000,000				8,400,000
Common stock, shares authorized									500,000,000		500,000,000	500,000,000	64,000,000
Stock issued during period, shares, issued for services	150,000								150,000
Common stock, shares outstanding									73,550,000		73,550,000
Common stock, shares issued									73,550,000		73,550,000
Class C Common Stock [Member] | Shareholders of Shenzhen Nova E-commerce, Ltd. [Member]
Number of shares issued			25,000,000
Class C Common Stock [Member] | Tony Liu [Member] | September 15, 2016 Agreement [Member]
Number of shares issued						40,000,000
Class C Common Stock [Member] | 45 Contractor Employees and Nonemployees [Member]
Number of shares issued					8,400,000
Number of contractor employees and nonemployees | Integer					45

XML

Going Concern (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	May 31, 2019	May 31, 2018	May 31, 2019	May 31, 2018	Aug. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash	$ 60,328		$ 60,328		$ 23,434
Current liabilities	3,623,003		3,623,003		2,075,004
Net loss	$ (820,181)	$ (599,112)	$ (2,043,557)	$ (2,506,613)	$ (3,104,366)

XML

Significant Accounting Policies (Details Narrative)	9 Months Ended
	May 31, 2019 USD ($)	May 31, 2018	Aug. 31, 2018 USD ($)
Cash	$ 60,328		$ 23,434
Cash uninsured amount	$ 45,388
Revenues and Expenses [Member]
Foreign currency weighted average exchange rate	1.00	1.00
RMB [Member] | Revenues and Expenses [Member]
Foreign currency weighted average exchange rate	6.8264	6.5282
Hong Kong, Dollars [Member] | Revenues and Expenses [Member]
Foreign currency weighted average exchange rate	7.8399	7.8130
Assets and Liabilities [Member]
Exchange rate for foreign currency transaction	1.00		1.00
Assets and Liabilities [Member] | RMB [Member]
Exchange rate for foreign currency transaction	6.9092		6.8375
Assets and Liabilities [Member] | Hong Kong, Dollars [Member]
Exchange rate for foreign currency transaction	7.8430		7.8494
Website Development Costs [Member]
Estimated economic life	5 years
Software [Member]
Estimated economic life	5 years
Office Software [Member]
Estimated economic life	2 years

XML

Acquisition of UBI Shenzhen Cross Border E-commerce Co., Ltd (Formerly Nova E-commerce, Ltd.) (Details Narrative) - UBI Shenzhen Cross Border E-Commerce Co., Ltd. [Member]	Aug. 29, 2017 shares
Class C Common Stock [Member]
Purchases of shares	25,000,000
Acquisition Agreement [Member]
Ownership percentage	100.00%

XML

Acquisition of UBI Shenzhen Cross Border E-commerce Co., Ltd (Formerly Nova E-commerce, Ltd.) - Schedule of Business Acquisition of Assets and Liabilities (Details)	Aug. 29, 2017 USD ($)
Business Combinations [Abstract]
Cash
Office equipment, net	13,628
Website development costs	92,035
Total assets	105,663
Accounts payable and accrued liabilities	24,651
Due to related party	135,865
Total liabilities	160,516
Excess of liabilities over assets	$ 54,853

XML

Prepaid Stock Based Salaries and Consulting Fees - Schedule of Prepaid Stock-based Salaries and Consulting Fees (Details) - USD ($)	May 31, 2019	Aug. 31, 2018
Total		$ 493,333
Current portion		(493,333)
Non-current portion
Fair Value of Stock Issuance [Member]
Total	3,160,000
Class C Common Stock [Member] | 7 Employees [Member]
Total
Class C Common Stock [Member] | 7 Employees [Member] | Fair Value of Stock Issuance [Member]
Total	290,000
Class C Common Stock [Member] | 38 Consultants [Member]
Total
Class C Common Stock [Member] | 38 Consultants [Member] | Fair Value of Stock Issuance [Member]
Total	1,390,000
Class A Common Stock [Member] | Consultant [Member]
Total		$ 493,333
Class A Common Stock [Member] | Consultant [Member] | Fair Value of Stock Issuance [Member]
Total	$ 1,480,000

XML

Prepaid Stock Based Salaries and Consulting Fees - Schedule of Prepaid Stock-based Salaries and Consulting Fees (Details) (Parenthetical) - shares					12 Months Ended
	May 01, 2017	Apr. 03, 2017	Mar. 02, 2017	Oct. 07, 2016	Dec. 31, 2017
Class C Common Stock [Member]
Number of shares issued during period			40,000,000		8,400,000
Class C Common Stock [Member] | 7 Employees [Member]
Number of shares issued during period		1,450,000
Service term		1 year
Service agreements expiration date		Dec. 31, 2017
Class C Common Stock [Member] | 38 Consultants [Member]
Number of shares issued during period		6,950,000
Service term		1 year
Service agreements expiration date		Dec. 31, 2017
Class A Common Stock [Member]
Number of shares issued during period				30,000,000
Class A Common Stock [Member] | Consultant [Member]
Number of shares issued during period	500,000
Service term	2 years
Service agreements expiration date	Apr. 30, 2019

XML

Intangible Assets (Details Narrative)				12 Months Ended
	Mar. 15, 2018 CNY (¥)	Jan. 17, 2018 CNY (¥)	Nov. 24, 2017 CNY (¥)	Aug. 31, 2018 USD ($)	Aug. 31, 2018 CNY (¥)	Aug. 31, 2018 CNY (¥)
Purchase of game software | $				$ 41,682
Cash paid for game software | $				41,682
Software capitalized cost | $				37,294
Research and Development Expense [Member]
Software acquired expenses | $				$ 4,388
RMB [Member]
Purchase of game software | ¥	¥ 285,000	¥ 285,000	¥ 285,000
Cash paid for game software | ¥					¥ 285,000
Software capitalized cost | ¥						¥ 255,000
RMB [Member] | Research and Development Expense [Member]
Software acquired expenses | ¥					¥ 30,000

XML

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	May 31, 2019	Aug. 31, 2018
Total intangible assets - net	$ 103,088	$ 127,037
Website Development Costs [Member]
Intangible assets - gross	92,977	93,952
Accumulated amortization	(25,041)	(11,278)
Total intangible assets - net	67,936	82,674
Software Acquired [Member]
Intangible assets - gross	36,907	37,294
Accumulated amortization	(5,603)
Total intangible assets - net	31,304	37,294
Office Software [Member]
Intangible assets - gross	8,395	8,483
Accumulated amortization	(4,547)	(1,414)
Total intangible assets - net	$ 3,848	$ 7,069

XML

Intangible Assets - Schedule of Expected Future Amortization Expense of Website Development Costs (Details) - USD ($)	May 31, 2019	Aug. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
May 31, 2020	$ 29,824
May 31, 2021	25,976
May 31, 2022	24,043
May 31, 2023	18,595
May 31, 2024	4,650
Total	$ 103,088	$ 127,037

XML

Stockholders' Equity (Details Narrative)												3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 30, 2018 shares	Mar. 31, 2018 shares	Jan. 18, 2018	Jan. 04, 2018 shares	Dec. 26, 2017	Oct. 02, 2017 $ / shares shares	Aug. 29, 2017 Integer shares	May 01, 2017 USD ($) $ / shares shares	Mar. 02, 2017 shares	Oct. 07, 2016 shares	Sep. 15, 2016 USD ($)	Aug. 31, 2018 USD ($) $ / shares shares	Nov. 30, 2017 USD ($) shares	May 31, 2019 USD ($)	May 31, 2018 USD ($)	Aug. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Apr. 28, 2017 $ / shares	Dec. 31, 2016 Integer	Oct. 11, 2016 USD ($)	Sep. 14, 2016 USD ($)
Number of employees and non-employees | Integer																			45
Stock issued during period for services, value | $																$ 30,000
Class A Common Stock [Member]
Share price | $ / shares						$ 4.10
Stock issued during period for services													82,000
Closing trading price | $ / shares						$ 5.12
Stock issued during period for services, value | $													$ 335,872
Restricted stock discount percentage						20.00%
Consulting Agreement [Member]
Stock-based compensation | $														$ 493,333	$ 555,000	$ 740,000
Acquisition Agreement [Member] | UBI Shenzhen Cross Border E-Commerce Co., Ltd. [Member]
Ownership percentage							100.00%
Employee Compensation [Member]
Stock-based compensation | $														0	96,668
Consulting Fees [Member]
Stock-based compensation | $														$ 0	$ 463,333
Board of Directors [Member]
Common stock forward stock split			4-for-1 forward stock split
Class A Common Stock [Member]
Newly issued shares value | $											$ 200,000
Number of shares issued during period										30,000,000
Number of common shares receivable under stock split				3
Class A Common Stock [Member] | Restricted Stock [Member]
Stock issued during period for services						82,000
Class A Common Stock [Member] | Consulting Agreement [Member]
Share price | $ / shares								$ 2.96
Closing trading price | $ / shares																		$ 3.95
Class A Common Stock [Member] | Consulting Agreement [Member] | Restricted Stock [Member]
Number of shares issued during period								500,000
Stock issued during period for services								500,000
Agreement term description								Consulting Agreement dated April 28, 2017 with a service term of two years expiring April 30, 2019.
Agreement term								2 years
Service agreements expiration date								Apr. 30, 2019
Stock issued during period for services, value | $								$ 1,480,000
Restricted stock discount percentage								25.00%
Class B Common Stock [Member]
Newly issued shares value | $											200,000
Number of shares issued during period										6,000,000
Number of common shares receivable under stock split				3
Class C Common Stock [Member]
Newly issued shares value | $											200,000
Number of shares issued during period									40,000,000								8,400,000
Issuance of value based on fair value of stock based compensation | $																	$ 1,680,000
Issuance of shares based on fair value of stock based compensation																	8,400,000
Share price | $ / shares																	$ 0.20
Stock issued during period for services	150,000											150,000
Closing trading price | $ / shares												$ 0.20				$ 0.20
Stock issued during period for services, value | $												$ 30,000
Class C Common Stock [Member] | UBI Shenzhen Cross Border E-Commerce Co., Ltd. [Member]
Purchases of shares							25,000,000
Number of owner | Integer							130
Class C Common Stock [Member] | Chief Financial Officer [Member]
Number of shares issued during period																	100,000
Class C Common Stock [Member] | Independent Director [Member]
Number of shares issued during period																	500,000
Class C Common Stock [Member] | Star Bright International Investment Enterprises [Member]
Number of shares issued during period																	5,000,000
Class C Common Stock [Member] | Global Alliance Securities [Member] | Restricted Stock [Member]
Stock issued during period for services		150,000
Class A and Class B Common Stock [Member]
Common stock dividend approved description					Approved a 3 for 1 common stock dividend
Common stock forward stock split				Approved a 4 for 1 forward stock split for holders
Attorney Trust Account [Member]
Due to related party | $											217,500									$ 67,500	$ 150,000
Payment of specific expenses | $											$ 17,500

XML

Related Party Transactions (Details Narrative)		1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2019 USD ($)	Mar. 31, 2017 HKD ($)	May 31, 2019 USD ($)	May 31, 2018 USD ($)	May 31, 2019 USD ($) shares	May 31, 2018 USD ($)	Aug. 31, 2018 USD ($)
Monthly rent expenses	$ 2,818
Due to related parties	3,400,725		$ 3,400,725		$ 3,400,725		$ 1,923,599
Interest expense			51,173	$ 24,024	128,122	$ 52,869
Accrued interest	219,091		219,091		$ 219,091
UBI Hong Kong [Member] | Class A Common Stock [Member]
Number of shares owned | shares					30,000,000
Tony Liu [Member]
Payment of related parties			557,703		$ 1,361,014
Due to related parties	3,181,634		$ 3,181,634		$ 3,181,634
Interest rate			7.00%		7.00%
Accrued salary	$ 51,000		$ 51,000		$ 51,000		$ 62,744
Hong Kong, Dollars [Member]
Monthly rent expenses		$ 22,100

XML

Provision for Income Taxes (Details Narrative) - USD ($)	9 Months Ended
	May 31, 2019	Aug. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Net operating loss carry forwards	$ 4,433,000	$ 2,883,000
Net loss carry forwards, description	United States net operating losses prior to 2018 may be carried forward to reduce future years taxable income for 20 years; United States net operating losses after 2017 may be carried forward indefinitely. Hong Kong net operating losses may be carried forward indefinitely. China net operating losses may be carried forward for 5 years.
Income tax, description	As a result of the tax Cuts and Jobs Act enacted on December 22, 2017, the United States corporate income tax rate was reduced from 35% to 21% effective January 1, 2018.
United states corporate income tax rate	21.00%
Net operating loss carryforward			$ 166,000

XML

Provision for Income Taxes - Schedule of Net Operating Loss Carry Forwards (Details) - USD ($)	May 31, 2019	Aug. 31, 2018
Total	$ 4,433,000	$ 2,883,000
United States [Member]
Total	1,543,000	1,296,000
Hong Kong [Member]
Total	1,631,000	855,000
China (UBI Shenzhen) [Member]
Total	$ 1,259,000	$ 732,000

XML

Provision for Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($)	May 31, 2019	Aug. 31, 2018
Income Tax Disclosure [Abstract]
Net operating loss carry forwards	$ 907,919	$ 587,617
Valuation allowance	(907,919)	(587,617)
Deferred tax assets - net

XML

Development Agreements (Details Narrative) - Development Agreement [Member]					1 Months Ended
	Nov. 12, 2018 USD ($)	Nov. 12, 2018 CNY (¥)	Sep. 30, 2018 USD ($)	Sep. 30, 2018 CNY (¥)	Aug. 31, 2018 USD ($)	Nov. 30, 2018 CNY (¥)	Aug. 31, 2018 CNY (¥)
Brewing Co., Ltd. [Member]
Due to related party | $					$ 1,007,808
Initial payment received net of tax | $			$ 56,223
Number of series of payment					8
Payment period					27 months
Payment due date					Dec. 31, 2020
Percentage of penalty					5.00%
Brewing Co., Ltd. [Member] | Minimum [Member]
Due to related party | $					$ 43,192
Brewing Co., Ltd. [Member] | Maximum [Member]
Due to related party | $					215,959
Brewing Co., Ltd. [Member] | RMB [Member]
Due to related party							¥ 7,000,000
Initial payment received				¥ 400,000
Initial payment received net of tax				¥ 388,350
Revenue performance obligations amount						¥ 400,000
Brewing Co., Ltd. [Member] | RMB [Member] | Minimum [Member]
Due to related party							300,000
Brewing Co., Ltd. [Member] | RMB [Member] | Maximum [Member]
Due to related party							1,500,000
Hotel Group Co., Ltd [Member]
Due to related party | $					$ 143,973
Initial payment received net of tax | $	$ 56,222
Number of series of payment					2
Payment period					11 months
Payment due date					Jul. 31, 2019
Percentage of penalty					5.00%
Hotel Group Co., Ltd [Member] | Minimum [Member]
Due to related party | $					$ 43,192
Hotel Group Co., Ltd [Member] | RMB [Member]
Due to related party							1,000,000
Initial payment received		¥ 400,000
Initial payment received net of tax		¥ 388,350
Revenue performance obligations amount						¥ 400,000
Hotel Group Co., Ltd [Member] | RMB [Member] | Minimum [Member]
Due to related party							¥ 300,000

XML

Commitments and Contingencies (Details Narrative)																	1 Months Ended		3 Months Ended		9 Months Ended
	May 10, 2019 USD ($)	May 10, 2019 HKD ($)	Mar. 15, 2019 USD ($)	Mar. 15, 2019 CNY (¥)	Dec. 10, 2018 USD ($)	Dec. 10, 2018 HKD ($)	May 24, 2018 USD ($)	May 24, 2018 HKD ($)	May 11, 2018 USD ($)	May 11, 2018 HKD ($)	Feb. 01, 2018 USD ($)	Feb. 01, 2018 HKD ($)	Jan. 10, 2018 USD ($)	Jan. 10, 2018 HKD ($)	Jan. 05, 2018 USD ($)	Jan. 05, 2018 HKD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 CNY (¥)	May 31, 2019 USD ($) $ / shares shares	May 31, 2018 USD ($)	May 31, 2019 USD ($) $ / shares shares	May 31, 2019 HKD ($) shares	May 31, 2018 USD ($)	Aug. 31, 2018 shares	Feb. 28, 2018 shares
Monthly rent expenses																			$ 29,752	$ 25,359	$ 96,825		$ 65,049
First Lease [Member]
Monthly rent expenses																	$ 1,788
Lease expires date																	Sep. 30, 2020	Sep. 30, 2020
Second Lease [Member]
Monthly rent expenses																	$ 1,297
Lease expires date																	Sep. 30, 2019	Sep. 30, 2019
Class C Common Stock [Member]
Common stock shares outstanding | shares																			73,550,000		73,550,000			73,550,000
Offer and sale of shares | shares																					25,000,000	25,000,000
Price per share | $ / shares																			$ 0.20		$ 0.20
Obligation to repay																					$ 5,000,000
Guangxi Houde Mega Health Enterprise [Member]
Ownership percentage																									70.00%
Guangxi Houde Mega Health Enterprise [Member] | Class C Common Stock [Member]
Common stock shares outstanding | shares																									5,000,000
Jinzhuan [Member]
Payment of consulting fee			$ 91,500
RMB [Member] | First Lease [Member]
Monthly rent expenses | ¥																		¥ 12,353
RMB [Member] | Second Lease [Member]
Monthly rent expenses | ¥																		¥ 8,964
RMB [Member] | Jinzhuan [Member]
Payment of consulting fee | ¥				¥ 611,700
HKPU Project [Member]
Project cost													$ 386,000		$ 386,000
Project completion date															Nov. 14, 2019	Nov. 14, 2019
Payments for project costs																					314,000
HKPU Project [Member] | Hong Kong Special Administrative Region [Member]
Payments for project costs											$ 72,000
HKPU Project [Member] | April 1, 2018 [Member] | UBI Hong Kong [Member]
Payments for project costs																					88,000
HKPU Project [Member] | October 1, 2018 [Member] | UBI Hong Kong [Member]
Payments for project costs																					88,000
HKPU Project [Member] | April 1, 2019 [Member] | UBI Hong Kong [Member]
Payments for project costs																					88,000
HKPU Project [Member] | First Installments [Member]
Project cost															$ 72,000
HKPU Project [Member] | First Installments [Member] | January 12, 2018 and January 16, 2018 [Member]
Project cost															$ 72,000
HKPU Project [Member] | Three Months of Completion [Member] | UBI Hong Kong [Member]
Payments for project costs																					50,000
HKPU Project [Member] | Second Installment [Member]
Payments for project costs							$ 82,000		$ 82,000
HKPU Project [Member] | Third Installment [Member]
Payments for project costs					$ 83,000
HKPU Project [Member] | Fourth Installment [Member]
Payments for project costs	$ 98,000
HKPU Project [Member] | With in Thirty Days after the Acceptance [Member] | UBI Hong Kong [Member]
Payments for project costs																					$ 314,000
HKPU Project [Member] | Hong Kong, Dollars [Member]
Project cost														$ 3,018,750		$ 3,018,750
HKPU Project [Member] | Hong Kong, Dollars [Member] | Hong Kong Special Administrative Region [Member]
Payments for project costs												$ 561,198
HKPU Project [Member] | Hong Kong, Dollars [Member] | UBI Hong Kong [Member]
Payments for project costs																						$ 2,457,552
HKPU Project [Member] | Hong Kong, Dollars [Member] | April 1, 2018 [Member] | UBI Hong Kong [Member]
Payments for project costs																						687,934
HKPU Project [Member] | Hong Kong, Dollars [Member] | October 1, 2018 [Member] | UBI Hong Kong [Member]
Payments for project costs																						687,934
HKPU Project [Member] | Hong Kong, Dollars [Member] | April 1, 2019 [Member] | UBI Hong Kong [Member]
Payments for project costs																						687,934
HKPU Project [Member] | Hong Kong, Dollars [Member] | First Installments [Member]
Project cost																561,198
HKPU Project [Member] | Hong Kong, Dollars [Member] | First Installments [Member] | January 12, 2018 and January 16, 2018 [Member]
Project cost																$ 561,198
HKPU Project [Member] | Hong Kong, Dollars [Member] | Within Three Months of Completion of HKPU Project [Member] | UBI Hong Kong [Member]
Payments for project costs																						393,750
HKPU Project [Member] | Hong Kong, Dollars [Member] | Second Installment [Member]
Payments for project costs								$ 643,647		$ 643,647
HKPU Project [Member] | Hong Kong, Dollars [Member] | Third Installment [Member]
Payments for project costs						$ 653,647
HKPU Project [Member] | Hong Kong, Dollars [Member] | Fourth Installment [Member]
Payments for project costs		$ 766,507
HKPU Project [Member] | Hong Kong, Dollars [Member] | With in Thirty Days after the Acceptance [Member] | UBI Hong Kong [Member]
Payments for project costs																						$ 2,457,522

XML

Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details)	May 31, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Year ending May 31, 2020	$ 26,644
Year ending May 31, 2021	5,188
Total	$ 31,832