EQUITY

12 Months Ended

Aug. 31, 2020

Notes to Financial Statements

EQUITY

NOTE 13– EQUITY

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

During the year ended August 31, 2019, the following 40,600,000 common shares were returned to the Company due to the termination of the Investor Agreement to acquire 51% ownership of iCrowdU Inc:

● 2,000,000 shares for acquisition of shares of iCrowdU as collateral and 8,000,000 shares as consideration.

● 20,200,000 issued to Alexander Holtermann for employment as Chief Executive Officer, 10,200,000 to Ian Wright for employment as Chief Operational Officer, and 200,000 to Eichbaum Financial Reporting Services Inc. for consulting fees.

In June, 2019, the Company incurred a 50:1 common reverse stock split. Prior to approval of the reverse split the Company had a total of 177,100,000 issued and outstanding shares of common stock, par value $0.001. On the effective date of the reverse split, the Company has a total of 3,602,016 issued and outstanding shares of common stock, par value $0.001. 

Upon the Reverse Split becoming effective, the par value per share of common stock will remain unchanged at $0.001 per share. As a result, on the effective date of the Reverse Split, the stated capital on the Company’s balance sheet attributable to our common stock will be reduced proportionally, based on the exchange ratio of the Reverse Split, from its present amount, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. The net income or loss and net book value per share of common stock will be increased, because there will be fewer shares of common stock outstanding.

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

● 1,975,000 shares issued for consulting services of $59,250 to two third-party consultants during Q1, FY2019 and 3,300,000 common shares for consulting services of $99,000 to nine third-party consultants during Q3, FY2019

● 20,100,000 shares for services of the Chief Operational Officer, the Chief Marketing Officer, and the Chief Financial Officer.

● 18,000,000 common shares issued at $0.02 per share to five unrelated parties for proceeds of $360,000 during Q2, FY2019. The five unrelated parties include Anyone Pictures Limited, Kangdi Liu, Lijun Yu, Zestv Features Limited, and All In One Media Limited.

● 13,000,000 common shares issued at $0.02 per share to three unrelated parties, including 3,000,000 to Kangdi Liu and 10,000,000 Bonus Media Investment Limited during Q3, 2019 for total proceeds of $260,000 during Q3, FY2019.

● 3,000,000 common shares issued at $0.02 per share to an unrelated third party Zestv Features Limited in Q4, FY2019 before the 50:1 reverse stock split for a total proceed of $60,000.

● 20,000,000 common shares to the Chief Executive Officer Chiyuan Deng with 14,000,000 issued at $0.02 per share in Q3, FY2019 and 600,000 shares issued at $2 per share in Q4, FY2019 after the 50:1 reverse stock split for total cash proceeds of $1,480,000.

● 620,000 common shares issued at $2 per share after the reverse stock split to five unrelated party, including 100,000 to All In One Media Limited, 60,000 to KangDi Liu, 130,000 to Anyone Pictures Limited, 165,000 to StarEastNet, and 165,000 to Baoyu Chen, for total proceeds of $1,240,000 

 The Company issued and cancelled the following common shares during the year ended August 31, 2020:

· 10,000,000 common shares issued at $0.035 per share to five unrelated parties for proceeds of $350,000 during Q4, FY2020. The five unrelated parties include All In One Media Limited, Capitalive Holdings Limited,KangDi Liu, Yilin Liu, and Zestv Features Limited.

· 11,000,000 common shares issued at $0.0205 per share to five unrelated parties for proceeds of $225,500 during Q4, FY2020. The five unrelated parties include All In One Media Limited, KangDi Liu, Mingpeng Ou , Weishan Jian , Xinyang Liu.

· 18,014,401 common shares issued from note conversions for total proceeds of $309,894. Please refer to Note 9 for detailed conversion price.

· 3,250,000 common shares issued from warrant exercise at $0.03 and $0.0205 per share for total proceeds of $43,247 during Q4, FY 2020.

· 425,000 restricted common shares cancelled due to the resignations of Secretary and Treasurer, Chief Marketing Officer, and Chief Operating Officer, who received these shares from the upfront issuances of restricted shares as stock-based compensation upon inauguration.

The Company issued the following warrant shares during the year ended August 31, 2020:

· During FY2020 the Company issued six five-year warrants to purchase up to 803,920 shares of common stock at an exercise price of $10.00 per share, $12.50 per share, or $0.1 per share. The exercise prices for all the warrants are subject to anti-dilution adjustments. Refer to Note 10 for further details.

The Company has 46,661,417 and 4,822,016 shares issued and outstanding, as of August 31, 2020 and August 31, 2019, respectively. These common shares were held by approximately 520 and 513 shareholders of record at August 31, 2020 and August 31, 2019, respectively.

On July 30, 2020, the Company entered into an Equity Purchase Agreement (the “Financing Agreement”) with Peak One. Although we are not mandated to sell shares under the Financing Agreement, the Financing Agreement gives us the option to sell to Peak One, up to $10,000,000 worth of our common stock over the period ending twenty-four (24) months after the date the Registration Statement of which this prospectus forms a part is deemed effective. In consideration for Peak One’s execution and performance under the Financing Agreement, the Company issued a warrant to purchase 750,000 shares of Common Stock, as Warrant Shares (as defined in the Financing Agreement), to Peak One in July 2020. As of August 31, 2020, there were no put shares issued to Peak One.

On July 30, 2020, the Company also entered into a registration rights agreement with Peak One (the “Registration Rights Agreement”) whereby we are obligated to file a registration statement to register the resale of the purchase shares. The Registration Statement of which this prospectus forms a part is being filed to comply with the Registration Rights Agreement. We must our reasonable efforts to keep the registration statement continuously effective under the Securities Act until all of the Warrant Shares and purchase shares have been sold there under or pursuant to Rule 144.

The Company will not receive any proceeds from the sale of the shares of our common stock by Peak One. However, we will receive proceeds from our initial sale of shares to Peak One pursuant to the Financing Agreement. We will sell shares to Peak One at a price equal to 88% of the Market price. The Market price is the lesser of the lowest closing bid price immediately preceding the put date, or the lowest closing bid price of our common stock during the ten (10) consecutive trading day period beginning on the date on which we deliver a put notice to Peak One.