AI Era Corp 10-K for FY2023

AI Era Corp. (AERA)

10-K 2023-11-29 For: 2023-08-31

Added on April 06, 2026

About this 10-K

AI Era Corp filed this 10-K on November 29, 2023, covering the fiscal year ended August 31, 2023 (FY2023).

Headline figures

Fiscal year ended August 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.47M; down 49.7% from $2.93M a year earlier
Net loss: $3.57M; compared with a net loss of $2.17M a year earlier

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☒	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended August 31, 2023
☐	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number: 000-55979

Nevada	37-1740351
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
144 Main Street, Mt. Kisco, NY 10549
(Address of principal executive offices)
(914) 202-3108
(Registrant’s telephone number)
_______________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated Filer	☒ Smaller reporting company
	☐ Emerging growth company


Page
PART I

Item 1.	Business	1
Item 1A.	Risk Factors	3
Item 1B.	Unresolved Staff Comments	9
Item 2.	Properties	9
Item 3.	Legal Proceedings	9
Item 4.	Mine Safety Disclosure	9

PART II

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	5
Item 6.	[Reserved]	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	18
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	18

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	19
Item 11.	Executive Compensation	21
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions, and Director Independence	23
Item 14.	Principal Accountant Fees and Services	25

PART IV

Item 15.	Exhibits, Financial Statement Schedules	26
Item 16.	Form 10-K Summary	26
Signatures

	•		risks relating to motion picture production and theatrical performance;
	•		our lack of control over distributors of films;
	•		intense competition in the geographic areas in which we operate among exhibitors or from other forms of entertainment;
	•		increased use of alternative film delivery methods including premium video on demand or other forms of entertainment;
	•		shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date;
	•		AB Cinemas may not meet anticipated revenue projections, which could result in a negative impact upon operating results;
	•		failures, unavailability or security breaches of our information systems;
	•		dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with any future acquisitions;
	•		our ability to achieve expected synergies, benefits and performance from our strategic theatre acquisitions and strategic initiatives;
	•		the risk of severe weather events or other events caused by climate change disrupting or limiting operations;
	•		supply chain disruptions and labor shortages may negatively impact our operating results; and
	•		optimizing our theatre circuit through new construction and the transformation of our existing theatres may be subject to delay and unanticipated costs.

	•		general and international economic, political, regulatory, social and financial market conditions, economic unrest, terrorism, hostilities, cyber-attacks, war, widespread health emergencies, such as COVID-19 or other pandemics, and other geopolitical risks;
	•		review by antitrust authorities in connection with acquisition opportunities;
	•		risks relating to the incurrence of legal liability, including costs associated with ongoing securities class action lawsuits;
	•		increased costs in order to comply or resulting from a failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”) and pending future domestic privacy laws and regulations;
	•		geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance; and
	•		other risks referenced from time to time in filings with the SEC.

	•	The Company issued 2,500,000 and 3,000,000 shares of put shares to Peak One for cash at $0.02288, and $0.02719, respectively, per share during Q1 2022.
	•	The Company issued 1,800,000 shares of common stock for cash at $0.01548 per share, and 3,000,000 shares of common stock for cash at $0.01716 per share, and 2,300,000 shares of common stock for cash at $0.01729 per share, and 2,300,000 shares of common stock for cash at $0.0110 per share to Peak One during Q2 2022.
	•	As stock-based compensation for annual bonus for calendar year of 2021, the Company issued 5,000,000 shares restricted common stock to the Chief Investment Officer and 10,000,000 shares restricted common stock to the Chief Executive Officer which were valuated at market price $0.0138 per share in Q2 2022.
	•	The Company issued 30,000,000 shares of restricted stock at market price $0.0138 per share to seven consultants for 6 months to 18 months consulting services of movies and NFT related business in Q2 2022.
	•	The Company issued total 85,715,176 of common shares from preferred shares series C conversion during the year.
	•	The Company issued total 12,307,672 of common shares from preferred shares series D conversion during the year.

F-1	Report of Independent Registered Public Accounting Firm;
F-2	Consolidated Balance Sheets as of August 31, 2023 and 2022;
F-3	Consolidated Statements of Operations for the years ended August 31, 2023 and 2022;
F-4	Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, 2023 and 2022;
F-5	Consolidated Statements of Cash Flows for the years ended August 31, 2023 and 2022; and
F-6 - F-23	Notes to Consolidated Financial Statements.

	August 31,			August 31,
	2023			2022

ASSETS
Current Assets
Cash and cash equivalents	$	117,096		$	84,223
Prepaid expenses		—			13,035
Total Current Assets		117,096			97,258

Property and equipment, net		8,254			12,695
Right of use operating lease assets, net		696,380			1,004,018
Intangible assets, net		1,455,110			3,798,282
Purchase deposits for intangible assets, non-current		300,000			881,724
Security deposit		45,240			45,240
TOTAL ASSETS	$	2,622,080		$	5,839,217

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	156,763		$	293,786
Accounts payable and accrued liabilities - related party		6,388			15,127
Loan from related parties		748,285			377,398
Current portion of obligations under operating leases		211,507			229,813
Deferred revenue		—			38,000
Total Current Liabilities		1,122,943			954,124

Obligations under operating leases, non-current		608,149			863,145
Total Liabilities		1,731,092			1,817,269

Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 preferred shares authorized;
Series A preferred stock, 100,000 and 100,000 shares issued and outstanding, as of August 31, 2023 and 2022, respectively		100			100
Series B preferred stock, 20,000 and 20,000 shares issued and outstanding, as of August 31, 2023 and 2022, respectively		20			20
Series C preferred stock, 174,421 and 335,850 shares issued and outstanding, as of August 31, 2023 and 2022, respectively		175			336
Series D preferred stock, 0 and 0 shares issued and outstanding, as of August 31, 2023 and 2022, respectively		—			—
Common stock, $0.001 par value, 10,000,000,000 shares authorized; 1,285,283,385 and 384,512,583 shares issued and outstanding, as of August 31, 2023 and 2022, respectively		1,285,283			384,512
Additional paid-in capital		11,993,408			12,636,838
Accumulated deficit		(12,387,998	)		(8,789,901	)
Unearned stock compensation		—			(209,957	)
Total Stockholders’ Equity		890,988			4,021,948
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,622,080		$	5,839,217


	Years ended
	August 31,
	2023			2022

REVENUE
Copyrights and license	$	948,000		$	2,928,000
Theatre admissions and food and beverage sales		525,222			—
Total revenue		1,473,222			2,928,000

OPERATING COSTS AND EXPENSES
Amortization expenses		(3,048,172	)		(3,221,789	)
Theatre operating costs		(243,635	)		—
General and administrative expenses		(1,507,988	)		(1,190,360	)
Related party salary and wages		(230,559	)		(547,638	)
Total Operating Costs And Expenses		(5,030,354	)		(4,959,787	)

Loss From Operations		(3,557,132	)		(2,031,787	)

OTHER INCOME (EXPENSES)
Interest income (expenses)		740			(239)
Interest expense – related party		(10,318	)		—
Penalty expenses		—			(141,945	)
Total Other Expenses		(9,578	)		(142,184	)

Loss Before Income Tax Benefit		(3,566,710	)		(2,173,971	)

Income tax benefit		—			—
NET LOSS	$	(3,566,710	)	$	(2,173,971	)
Preferred shares dividend expense		(31,387	)		(36,952	)

NET LOSS AVAILABLE TO COMMON STOCK HOLDERS	$	(3,598,097	)	$	(2,210,923	)

NET LOSS PER SHARE: BASIC	$	(0.00	)	$	(0.01	)
NET LOSS PER SHARE: DILUTED	$	(0.00	)	$	(0.01	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC		866,520,740			290,712,023
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: DILUTED		866,520,740			290,712,023


	Common Stock				Preferred Stock
	Number of Shares		Amount		Number of Shares			Amount			Additional Paid-in Capital			Accumulated Deficit			Unearned Compensation			Total Equity

Balance –August 31, 2021		226,589,735	$	226,590		120,000		$	120		$	11,009,517		$	(6,578,978	)	$	(7,473	)	$	4,649,776
Put Shares issued for cash		14,900,000		14,900		—			—			216,002			—			—			230,902
Preferred shares series C issuance		—		—		757,965			758			586,148			—			—			586,906
Preferred shares series C converted into common shares		85,715,176		85,715		(422,115	)		(422	)		(85,293	)		—			—			—
Penalty and dividend in connection with Preferred shares series C		—		—		—			—			174,731			—			—			174,731
Preferred shares series D issuance		—		—		187			—			172,040			—			—			172,040
Preferred shares series D and dividend shares converted into common shares		12,307,672		12,307		(187	)		—			(12,307	)		—			—			—
Common shares issued to officers for services		45,000,000		45,000		—			—			576,000			—			(202,484	)		418,516
Net loss		—		—		—			—			—			(2,210,923	)		—			(2,210,923)
Balance at August 31, 2022		384,512,583	$	384,512		455,850		$	456		$	12,636,838		$	(8,789,901	)	$	(209,957	)	$	4,021,948


Balance - August 31, 2022		384,512,583	$	384,512		455,850		$	456		$	12,636,838		$	(8,789,901	)	$	(209,957	)	$	4,021,948
Issuance of common shares		200,000,000		200,000		—			—			(53,525	)		—			—			146,475
Preferred shares Series C issuance		—		—		90,275			90			68,910			—			—			69,000
Preferred shares series C converted into common shares		700,770,802		700,771		(250,268	)		(250	)		(700,521	)		—			—			—
Dividend in connection with Preferred shares series C		—		—		—			—			31,387			—			—			31,387
Stock based compensation - consultants		—		—		—			—			—			—			209,957			209,957
Preferred shares series C waived		—		—		(1,436	)		(1	)		1			—			—			—
Imputed Interest		—		—		—			—			10,318			—			—			10,318
Net loss		—		—		—			—			—			(3,598,097	)		—			(3,598,097)
Balance – August 31, 2023		1,285,283,385	$	1,285,283		294,421		$	295		$	11,993,408		$	(12,387,998	)	$	—			890,988

			Estimated Useful Life
Furniture			7 years
Appliances			5 years
Leasehold improvement			Lesser of useful life and lease term

	•	Movie copyrights and broadcast rights: straight-line method over the estimated life of the asset, which has been determined by management to be 2 years
	•	NFT MMM platform: straight-line method over the estimated life of the asset, which has been determined by management to be 2 years

	August 31, 2023		August 31, 2022
Copyrights sales	$	250,000	$	2,806,000
NFT licenses		698,000		122,000
Theatre admissions		345,057		—
Food and beverage sales		180,165		—
Total revenue	$	1,473,222	$	2,928,000

	August 31, 2023			August 31, 2022
Movie copyrights - Love over the world	$	853,333		$	853,333
Sitcom copyrights - Chujian		640,000			640,000
Movie copyrights - A story as a picture		422,400			422,400
Movie copyrights - Our treasures		936,960			936,960
Movie broadcast right- On the way		256,000			256,000
Movie copyrights - Too simple		1,271,265			1,271,265
Movie copyrights - Confusion		1,024,000			1,024,000
Movie copyrights - Amazing Data		300,000			—
Movie copyrights - Nice to meet you		300,000			—
TV drama copyright - 20 episodes		295,000			190,000
Movie and TV series broadcast rights		2,439,840			2,439,840
NFT MMM platform		280,000			280,000
Total cost		9,018,798			8,313,798
Accumulated amortization		(7,563,688	)		(4,515,516	)
Intangible assets, net	$	1,455,110		$	3,798,282

Twelve months ending August 31, 2023	Amortization expense
2024	$	1,362,610
2025		92,500
Total	$	1,455,110

Twelve months ending August 31,
2024	$	216,364
2025		250,555
2026		255,412
2027		107,275
Total future minimum lease payments		829,606
Less: imputed interest		(9,950	)
Total	$	819,656

	August 31, 2023		August 31, 2022

Purchase deposit for movies and TV dramas	$	—	$	881,724
Purchase deposit for software		300,000		—
Total purchase deposits for intangible assets	$	300,000	$	881,724

	Number of warrants
	Original shares issued		Anti-dilution Adjusted
Warrants as of August 31, 2021		—		—
Warrants granted during the year		50,000,000		—
Warrants as of August 31, 2022		50,000,000		—
Warrants granted during the year		—		—
Exercisable as of August 31, 2023		50,000,000		—

	August 31, 2023			August 31, 2022
Deferred tax asset attributable to:
Net operating loss carry over	$	2,077,213		$	1,328,204
Less: valuation allowance		(2,077,213	)		(1,328,204	)
Net deferred tax asset	$	—		$	—


	Year ended
	August 31,
	2023			2022
Federal statutory tax rate		21	%		21	%
Change in valuation allowance		(21	%)		(21	%)
Effective tax rate		0	%		0	%


	IP Segment						Cinema Segment				Total
	Year ended						Year ended				Year ended
	August 31						August 31				August 31
	2023			2022			2023		2022		2023			2022
Revenue	$	948,000		$	2,928,000		$	525,222	$	—	$	1,473,222		$	2,928,000
Operating costs		—			—			243,635		—		243,635			—
Depreciation and Amortization		3,052,613			3,262,799			—		—		3,052,613			3,262,799
Interest expense		9,578			239			—		—		9,578			239
Segment assets		2,598,255			5,839,217			23,825		—		2,622,080			5,839,217
Segment income (loss)	$	(3,720,974	)	$	(2,173,971	)	$	154,264	$	—	$	(3,566,710	)	$	(2,173,971	)

Name		Age				Position
Chiyuan Deng			59			Chief Executive Officer, Principal Executive Officer

	Common Stock				Series A Preferred Stock
Name and Address of Beneficial Owner	Number of Shares Owned		Percent of Class(1)(2)		Number of Shares Owned		Percent of Class(1)(2)
Chiyuan Deng(3)		261,620,400		10%		100,000		100%
All Directors and Executive Officers as a Group (1 person)		261,620,400		10%		100,000		100%
5% Holders
None						—		—

	(2)	Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 2,567,226,432 shares of common stock issued and outstanding, 100,000 shares of Series A Preferred Stock issued and outstanding and 20,000 shares of Series B Preferred Stock issued and outstanding, as of November 28, 2023.

	(3)	Includes 238,020,400 shares held in his name, 2,100,000 shares held in Zestv Features Ltd in which he has voting and disposition authority, 1,400,000 shares held in Bonus Media Investment Limited in which he has voting and disposition authority, 100,000 shares which may be acquired from converting 100,000 Series A shares, and 20,000,000 shares that may be acquired from converting 20,000 shares of Series B Preferred Stock.

DATE	SIGNATURE	TITLE

November 29, 2023	/s/ Chiyuan Deng	Chief Executive Officer, Chief Financial Officer and Director
	Chiyuan Deng	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

By:	/s/ Chiyuan Deng
Name:	Chiyuan Deng
Title:	Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date:	November 29, 2023