NOTE 10 – STOCKHOLDERS’ EQUITY |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| NOTE 10 – STOCKHOLDERS’ EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY
Common shares
The Company had the following activities for the nine months ended May 31, 2026:
Repurchase of shares
On December 8, 2025, the Company entered into a Repurchase Agreement (the “Repurchase Agreement”) with Anyone Pictures Limited (the “Stockholder”), pursuant to which the Company agreed to repurchase from the Stockholder (split-adjusted 1,875,000) shares of the Company’s common stock, par value per share (the “Shares”), for an aggregate purchase price of $675,000 (the “Purchase Price”), or approximately $0.00018 (split-adjusted $0.36) per share.
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 10 – STOCKHOLDERS’ EQUITY (Continued)
The repurchase represents approximately 46.2% of the Company’s currently outstanding common stock (based on (split-adjusted 4,061,107) shares outstanding as of the most recent practicable date prior to the transaction). Upon closing of the transaction, the Shares will be returned to the Company’s treasury and canceled.
The transaction closed simultaneously with the execution of the Repurchase Agreement on December 8, 2025. The Purchase Price was satisfied through a non-cash settlement by offsetting against a related party loan. The Shares have been surrendered and canceled on the books of the Company.
Reverse Stock split
On June 5, 2025, the Company obtained the written consent of majority stockholders to grant discretionary authority to the Board of Directors of the Company, at any time or times for a period of 12 months after the date of the written consent, to adopt an amendment to the articles of incorporation to effect a reverse split of the issued and outstanding common stock within a range of 1-for-2,000 to 1-for-20,000. The exact ratio to be determined by the Board at a later date and is contingent upon receiving a market effectiveness date from FINRA. The Board of Directors has fixed the reverse-split ratio at 1-for-2,000 and has directed that the reverse stock split implemented effective December 18, 2025 (the “Market Effective Date”) upon receipt of FINRA’s market-effective notice on December 17, 2025. As a result of the share consolidation, each 2,000 common shares outstanding automatically combines and converts to one issued and outstanding common share without any action on the part of the shareholder. The share consolidation reduces the number of common shares issued and outstanding from to as of December 17, 2025. The authorized number of common shares remained the same.
Issuance of common shares for consulting and financing services
On October 1, 2025, the Company entered into three consulting agreements with independent third-party consultants to provide business development services. Under the terms of the agreements, each of the consultants are entitled to receive an aggregate of (split-adjusted 80,000) shares of the Company’s restricted common stock as compensation for services.
Upon execution of the agreements, the Company issued (split-adjusted 15,000) restricted common shares to each of the consultants, totaling (split-adjusted 45,000), which were delivered to the Company’s transfer agent in the consultants’ names and accounts. Under the terms of the agreement, the Company issued (split-adjusted 45,000), shares of its common stock at a value of (split-adjusted $0.4) per share, for total consulting expenses of for the three months ended November 30, 2025.
Beginning in the fourth month following the agreement date, and continuing through the sixteenth month, for each of the consultant, the Company is required to issue (split-adjusted 5,000) restricted common shares per month, to be delivered to the transfer agent in the Company’s name and account for subsequent release pursuant to the service schedule under the agreements. During the three months ended February 28, 2026, the Company issued and shares of its common stock at a grant-date fair value of and per share, for total consulting expenses of $27,270. During the three months ended May 31, 2026, the Company issued 15,000, 15,000 and 15,000 shares of its common stock at a grant-date fair value of $0.44, $0.28 and $1.09 per share, for total consulting expenses of $27,150.
On December 15, 2025, the Company entered into advisory agreements with an independent third party to provide financing and non-financing advisory services. Under the agreements, the advisor is entitled to an equity fee equal to 7% of the gross proceeds received from financing transactions. The equity fee is settled in restricted common stock, valued at the Company’s closing market price on the respective transaction dates. During the nine months ended May 31, 2026, the Company issued restricted common shares and recognized financing services expenses of $32,130 in connection with the agreement.
On May 1, 2026, the Company entered into advisory agreement with an independent third party to provide strategic capital markets consulting services. Under the agreements, the initial term will commence on May 1, 2026 and will continue for a period of four months and a monthly fee of $3,000 will be charged. And in addition, the Company also issue restricted common stocks before May 1, 2026 as additional consideration. During the three months ended May 31, 2026, the Company issued shares of its common stock at a grant-date fair value of per share, for total consulting expenses of $27,250.
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 10 – STOCKHOLDERS’ EQUITY (Continued)
Issuance of Common shares for officer bonus and salary
On December 24, 2025, the sole director, Chiyuan Deng, approved his bonus compensation for serving as the Company’s Chief Executive Officer for bonus of shares of common stock. The Company issued shares of the Company’s common stock valued at market price of per share for a total amount of $400,000 to Mr. Chiyuan Deng, the Chief Executive Officer. (See Note 9).
On March 1, 2026, the Company entered into an Employment Agreement with Ahmad Moradi to serve as the Company's Chief Executive Officer. The agreement has an initial three-year term with automatic one-year renewals unless either party provides 90 days’ prior written notice of non-renewal. Pursuant to the agreement, Mr. Moradi is entitled to a sign-on bonus of $500,000, payable in shares of the Company's common stock, with the number of shares to be determined based on a per-share price , as mutually agreed by the parties upon execution of the Employment Agreement. On March 1, 2026, the Company issued shares of the Company’s common stock valued at market price of per share for a total amount of $244,444 to Mr. Moradi.
Under the Employment Agreement, Mr. Moradi is also entitled to an annual base salary of $144,000, payable quarterly, with at least 50% payable in cash. Dr. Ahmad Moradi resigned as Chief Executive Officer on May 7, 2026. For the three months ended May 31, 2026, the Company recognized base salary expense of $26,433, of which $13,217 was paid in cash and the remaining $13,216 was settled through the issuance of shares of the Company's common stock, based on a share price of per share on May 7, 2026.
On March 1, 2026, the Company entered into an Employment Agreement with Chiyuan Deng to serve as the Company's President. The agreement has an initial three-year term with automatic one-year renewals unless either party provides 90 days’ prior written notice of non-renewal. Pursuant to the agreement, Mr. Deng is entitled to a sign-on bonus of $300,000, payable in shares of the Company's common stock, with the number of shares to be determined based on a per-share price , as mutually agreed by the parties upon execution of the Employment Agreement. On March 1, 2026, the Company issued shares of the Company’s common stock valued at market price of per share for a total amount of $146,667 to Mr. Deng. (See Note 9).
On April 7, 2026, the Company entered into an Employment Agreement with Dzmitry Kastahorau to serve as the Company's CFO. The agreement has an initial three-year term with automatic one-year renewals unless either party provides 90 days’ prior written notice of non-renewal. Pursuant to the agreement, Mr. Kastahorau is entitled to a sign-on bonus of $300,000, payable in shares of the Company's common stock, with the number of shares to be determined based on a per-share price between , as mutually agreed by the parties upon execution of the Employment Agreement. On April 7, 2026, the Company issued shares of the Company’s common stock valued at market price of per share for a total amount of $80,000 to Mr. Kastahorau. Mr. Dzmitry Kastahorau resigned as Chief Financial Officer on June 3, 2026. (See Note 16)
Issuance of common shares for private placement
On January 14, 2026, the Company entered into a Stock Purchase Agreement with Chief Executive Officer, Mr. Deng for the sales of 130,000 shares and with four unrelated investors for the sales of 138,000, 160,000, 150,000, and 80,000 shares, respectively, at a purchase price of $0.86 per share. The issuances resulted in total cash proceeds of $565,880.
On February 3, 2026, the Company entered into a Stock Purchase Agreement with an investor for the sale of shares of its common stock at a purchase price of per share. The Company received total cash proceeds of $66,000.
On February 5, 2026, the Company entered into a Stock Purchase Agreement with an investor for the sale of 160,000 shares of its common stock at a purchase price of $0.61 per share. The $97,600 was applied as a non-cash deposit toward a short-form drama series purchase agreement.
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 10 – STOCKHOLDERS’ EQUITY (Continued)
On April 8, 2026, the Company entered into a Stock Purchase Agreement with three investors for the sales of , , and shares, respectively, at a purchase price of per share. The issuances resulted in total cash proceeds of $60,000.
On April 28, 2026, the Company entered into a Stock Purchase Agreement with President, Mr. Deng for the sales of share, at a purchase price of per share. The issuances resulted in total cash proceeds of $111,100.
The Company had the following activities for the nine months ended May 31, 2025:
Issuance of common shares
On February 21, 2025, the Company entered into a stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued (split-adjusted 1,000,000) shares of the Company’s common stock with a value of $0.00015 (split-adjusted $0.3) per share for a gross proceed of $300,000 (See Note 9). These shares were repurchased by the company at the same price on December 8, 2025.
On March 14, 2025, the Company issued (split-adjusted 1,000,000) shares of the Company’s common stock valued at market price of (split-adjusted $0.4) per share for a total amount of $400,000 to Chiyuan Deng. (See Note 9).
On May 15, 2025, the Company entered into another stock purchase agreement with Anyone Pictures Limited. Under the terms of this agreement, the Company issued (split-adjusted 875,000) shares of the Company’s common stock with a value of (split-adjusted $0.4) per share for a gross proceed of $350,000 (See Note 9). These shares were repurchased by the company at the same price on December 8, 2025.
As of May 31, 2026 and August 31, 2025, the Company had and 8,031,266,321 (split-adjusted ) shares of common stock issued and outstanding, respectively.
Preferred shares
The Company had no preferred share activities for the nine months ended May 31, 2026 and 2025.
As of May 31, 2026 and August 31, 2025, the Company had and shares of Series A preferred stock issued and outstanding, respectively.
Warrants
2022 warrants
As a consideration of Common Stock Purchase Agreement signed with Alumni Capital on August 2, 2022, which resulted in Alumni Capital subscribing to a total of (split-adjusted 100,000) shares of common stock for total proceeds of as of August 31, 2023, Alumni Capital was granted the right to purchase up to (split-adjusted 25,000) shares of the Company’s common stock (the “Warrant Shares”). The warrants have an exercise price of $0.02 (split-adjusted $40) per share and an exercise period commencing on August 2, 2022 and expiring on the fifth anniversary of the issuance date. The aggregate fair value of the warrants was estimated at $234,000 using the Black-Scholes pricing model with the following assumptions: market value of underlying common shares of (split-adjusted $9.6), risk-free interest rate of , expected term of 5 years, exercise price of $0.02 (split-adjusted $40), expected volatility of , and expected future dividends of nil.
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 10 – STOCKHOLDERS’ EQUITY (continued)
2024 warrants
In connection with the Common Stock Purchase Agreement signed with Alumni Capital on June 13, 2024, the Company issued to Alumni a Common Stock Purchase Warrant dated the same day to purchase up to 1,943,304,434 (split-adjusted 971,652) shares of the Company’s common stock, representing (50%) of the commitment amount of $5 million, at an exercise price of $0.00129 (split-adjusted $2.58) per share, subject to adjustments, and ending on the 5 years anniversary of the issuance date. The number of shares under the Common Stock Purchase Warrant is subject to adjustment based on the following formula: (i) fifty percent (50%) of the Commitment Amount, less the exercise value of all partial exercises prior to the Exercise Date, divided by (ii) the Exercise Price on the Exercise Date. The exercise price per was calculated by dividing $3,000,000 by the total number of issued and outstanding shares of common stock as of June 13, 2024. The exercise price is subject to change based on a change in the number of the outstanding shares.
The warrant liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with ASC 815-40. As of May 31, 2026, the aggregate fair value of the warrants was estimated at $4,432,209, with a loss from change in fair value of warrant liabilities of $3,093,820 recorded in earnings for the nine months ended May 31, 2026, using the Monte Carlo simulation model with the following assumptions: market value of underlying common shares of $1.05; risk free rate of 4.06%; expected term of 3.04 years; exercise price of $0.52; volatility of ; and expected future dividends of .
As of August 31, 2025, the aggregate fair value of the warrants was estimated at $1,338,389, using the Black-Scholes pricing model with the following assumptions: market value of underlying common shares of $0.0002 (split-adjusted $0.44); risk free rate of 3.67%; expected term of 3.79 years; exercise price of $0.0004 (split-adjusted $0.8); volatility of ; and expected future dividends of .
As of May 31, 2026, 4,859,734 warrants in connection with two equity financings were outstanding, with weighted average remaining life of .
A summary of the status of the Company’s warrants as of May 31, 2026 and August 31, 2025 is presented below:
Equity Purchase Agreement
On February 21, 2026, the Company entered into an equity purchase agreement with Monroe Street Capital Partners, LP (the “Investor”), pursuant to which the Company has the right, but not the obligation, to sell up to an aggregate of $30,000,000 of its common stock to the Investor, subject to the terms and conditions set forth in the agreement. The expiration date is February 21, 2028
Under the agreement, the Company may, from time to time, direct the Investor to purchase shares of its common stock at prices based on prevailing market prices, subject to certain limitations and conditions, including regulatory requirements and the effectiveness of a registration statement covering the resale of such shares.
The Company is generally required to register the resale of shares issuable under the agreement, and the arrangement may result in significant dilution to existing stockholders depending on the timing and pricing of share issuances.
AI ERA CORP. (FORMERLY KNOWN AS AB INTERNATIONAL GROUP CORP.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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