ABQQ AB International Group Corporation (PK)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

AB INTERNATIONAL GROUP CORP. was incorporated under the laws of the State of Nevada on July 29, 2013 (“Inception”) and originally intended to purchase used cars in the United States and sell them in Krygyzstan. The Company’s fiscal year end is August 31.

On January 22, 2016, the Company’s former sole officer, who owned 83% of the Company’s outstanding common shares, sold all his common shares to un-related investor Jianli Deng. After the stock sale, the Company modified its business to focus on the creation of a mobile app marketing engine. Mr. Deng served until August 28, 2017, as the Company’s Chief Executive Officer and sole Director, at which point he resigned all positions held with the Company.

Currently, the Company is focused on the acquisition and development of intellectual property. On June 1, 2017, we entered into a Patent License Agreement (the “Agreement”) pursuant to which Guangzhou Shengshituhua Film and Television Company Limited, a company incorporated in China (“Licensor”), granted the Company a worldwide license to a video synthesis and release system for mobile communications equipment (the “Technology”), which Technology is the subject of a utility model patent in the People’s Republic of China. Under the Agreement we are able to utilize, improve upon, and sub-license the technology for an initial period of 5 years, subject to a right to renew for an additional 5 year term. We used the underlying technology to create a smartphone app marketing engine to be used for movie trailer promotion in China, which we sold on November 16, 2017, for $103,000. The Company was obligated to pay the Licensor $500,000 within 30 days of the date of the Agreement and a royalty fee in the amount of 20% of any proceeds resulting from our utilization of the Technology, whether in the form of sub-licensing fees or sales of licensed products. Our Chief Executive Officer, Chiyuan Deng and former Chief Executive Officer, Jianli Deng, jointly own and control Licensor.

On April 9, 2018, the Company acquired a crypto currencies kiosk company which has licenses and patent in Australia, which enable the operation of cryptocurrency ATMs that allow buying and selling of Bitcoin, Litecoin, and Ethererum all in one terminal. The Company plans to generate revenue through sub-licensing fees for the operation of cryptocurrency ATMs. Through the foregoing the Company proposes to bring a physical aspect to something that is otherwise very abstract to people. The Company plans to invest in machines and sell sub-licenses in the Asia Pacific region with future world-wide expansion.

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

RESULTS OF OPERATION

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

THREE MONTH PERIOD ENDED FEBRUARY 28, 2018 COMPARED TO THE THREE MONTH PERIOD ENDED FEBRUARY 28, 2017

REVENUE. During the three month periods ended February 28, 2018 and February 28, 2017 we generated $65,280 and $0 of revenue, respectively.

COST OF SALES. During the three month periods ended February 28, 2018 and February 28, 2017 we incurred $38,056 and $0 of cost of revenue, respectively.

OPERATING EXPENSES. During the three month periods ended February 28, 2018 and February 28, 2017, we incurred general and administrative expenses of $177,839 and $21,842, respectively, and related party salary and wages of $10,400 and $7,500, respectively. General and administrative expenses incurred were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses.

NET INCOME. Our net loss for the three month period ended February 28, 2018 was $134,004 compared to a net income of $50,082 during the three month period ended February 28, 2017.

SIX MONTH PERIOD ENDED FEBRUARY 28, 2018 COMPARED TO THE SIX MONTH PERIOD ENDED FEBRUARY 28, 2018

REVENUE. During the six month periods ended February 28, 2018 and February 28, 2017 we generated $106,112 and $0 of revenue, respectively.

COST OF SALES. During the six month periods ended February 28, 2018 and February 28, 2017 we incurred $71,222 and $0 of cost of revenue, respectively.

OPERATING EXPENSES. During the six month periods ended February 28, 2018 and February 28, 2017, we incurred general and administrative expenses of $209,297 and $46,689, respectively, and related party salary and wages of $16,700 and $15,000, respectively. General and administrative expenses incurred were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses.

NET INCOME. Our net loss for the six month period ended February 28, 2018 was $95,899 compared to a net income of $55,564 during the six month period ended February 28, 2017.

LIQUIDITY AND CAPITAL RESOURCES

As of February 28, 2018, our total assets were $899,308 compared to $954,031 in total assets at August 31, 2017. Total assets as of February 28, 2018 comprised cash of $158,553, accounts receivable of $49,920, prepaid expenses of $265,835 and $425,000 in intangible assets while as at August 31, 2017 total assets comprised cash of $147,164, accounts receivable of $88,320, prepaid expenses of $35,835 and $682,712 in intangible assets. As of February 28, 2018 and August 31, 2017, our current liabilities were $89,300 and $228,124 respectively.

Stockholders’ equity was $810,008 as of February 28, 2018 compared to $725,907 as of August 31, 2017.

CASH FLOWS FROM OPERATING ACTIVITIES

For the six month period ended February 28, 2018, net cash used in operating activities were $241,685 compared to net cash flows used in operating activities of $33,125 for the six month period ended February 28, 2017.

CASH FLOWS FROM INVESTING ACTIVITIES

We generated $253,000 in investment activities in the six months ended February 28, 2018, and we neither generated, nor used, funds in investing activities during the six months ended February 28, 2017.

CASH FLOWS FROM FINANCING ACTIVITIES

We generated $74 in net cash from financing activities during the six months ended February 28, 2018, compared to ($1,184) in net cash from financing activities during the six months ended February 28, 2017.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of cash flow from operations, our existing funds, further issuances of securities and loans from our principal shareholder. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next 12 months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds from business operations and the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to developmental expenses associated with a start-up business. We intend to finance these expenses with further issuances equity and/or debt securities. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

MATERIAL COMMITMENTS

As of February 28, 2018, we had no material commitments.

PURCHASE OF SIGNIFICANT EQUIPMENT

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

OFF-BALANCE SHEET ARRANGEMENTS

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

GOING CONCERN

The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.