UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark one)

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

For the Fiscal Year Ended August 31, ~~2017~~2018

[ ]

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: 000-54236

UBI Blockchain Internet, Ltd.

(Exact name of registrant as specified in its charter)

Delaware		27-3349143
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		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)

(212) 372-8836

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:

Common Stock

(Title of Class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

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 ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes [ X] No [ ] ~~Not Applicable~~

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by ~~checkmark~~check ifmark ~~disclosure~~whether ofthe ~~delinquent~~registrant ~~filers~~is ~~pursuant~~a tolarge ~~Item~~accelerated ~~405~~filer, ofan ~~Regulation~~accelerated Sfiler, a non-Kaccelerated isfiler, ~~not~~a ~~contained~~smaller reporting ~~herein~~company, ~~and~~or ~~will~~an ~~not~~emerging ~~be contained,~~growth tocompany. See the ~~best~~definitions of ~~registrant’s~~“large ~~knowledge~~accelerated filer,” “accelerated infiler,” ~~definitive~~“smaller ~~proxy~~reporting orcompany,”and ~~information~~“emerging ~~statements~~growth ~~incorporated~~company” byin ~~reference~~Rule in12b-2 ~~Part III~~ of ~~this~~the ~~Form~~Exchange ~~10-K or any amendment to this Form 10-K~~Act. ~~[X]~~

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ X] Smaller Reporting Company [X] ~~(Do~~Emerging ~~not~~Growth ~~check~~Company if[ ~~a smaller reporting 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 Exchange Act). Yes [ ] No [X]

The aggregate market value of the voting stock, the Class A shares, held by non-affiliates ~~amounted~~(based toupon ~~$1,326,151~~the last sale price of the Class A shares reported on the OTCQB as of the last business day of the registrant’s most recently completed second fiscal quarter (February 28, ~~2017~~2018), was $3,835,421.

As of December 46, ~~2017~~2018, 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,~~400~~550,000 Class C shares of common stock, par value $0.001 of the registrant issued ~~and~~ and outstanding.

INDEX

	TITLE	PAGE
PART I
ITEM 1.	Business	3
ITEM 2.	Properties	30
ITEM 1A	Risk Factors	10
ITEM 3.	Legal Proceedings	30
ITEM 1B	Unresolved Staff Comments	19
ITEM 4.	Mine Safety Disclosures	30
ITEM 2.	Properties	19
ITEM 5.	Market for Common Equity and Related Stockholder Matters	31
ITEM 3.	Legal Proceedings	19
ITEM 7.	Management’s Discussion and Analysis of Financial Condition	33
ITEM 4.	Mine Safety Disclosures	19
ITEM 8.	Financial Statement and Supplementary Data	37
PART II
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38
ITEM 5.	Market for Common Equity and Related Stockholder Matters	19
ITEM 9A.	Controls and Procedures	38
ITEM 7.	Management’s Discussion and Analysis of Financial Condition	20
ITEM 10.	Directors, Executive Officers and Corporate Governance	41
ITEM 8.	Financial Statement and Supplementary Data	26
ITEM 11.	Executive Compensation	43
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	26
ITEM 12.	Security Ownership of Certain Beneficial Owners Management and Related Stockholder Matters	44
ITEM 9A.	Controls and Procedures	26
ITEM 13.	Certain Relationships and Related Transactions and Director Independence	46
ITEM 9B	Other Information	27
ITEM 14.	Principal Accounting Fees and Services	47
PART III
ITEM 15.	Exhibits, Financial Statement Schedules	49
ITEM 10.	Directors, Executive Officers and Corporate Governance	28
ITEM 11.	Executive Compensation	30
ITEM 12.	Security Ownership of Certain Beneficial Owners Management and Related Stockholder Matters	30
ITEM 13.	Certain Relationships and Related Transactions and Director Independence	32
ITEM 14.	Principal Accounting Fees and Services	32
PART IV
ITEM 15.	Exhibits, Financial Statement Schedules	33
ITEM 16	Form 10-K Summary	34

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. When used in this ~~Quarterly~~Annual Report on Form 10-K, 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 Annual Report on Form 10-K. ~~Important~~Accordingly, ~~factors~~readers ~~that~~are ~~could~~cautioned ~~cause~~not ~~actual~~to ~~results~~place toundue ~~differ~~reliance ~~materially~~on ~~from our~~ forward-looking statements, ~~are~~which ~~set~~speak ~~forth~~only inas ~~this~~of ~~Quarterly~~the ~~Report~~dates on ~~Form~~which ~~10-K~~they are made. ~~Accordingly,~~Important ~~readers~~factors that ~~are~~could ~~cautioned~~cause ~~not~~actual results to ~~place~~differ ~~undue~~materially ~~reliance~~from onour forward-looking statements, ~~which~~are ~~speak~~set ~~only~~forth asin ofthis ~~the~~Annual ~~dates~~Report on ~~which they are made.~~Form 10-K. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by by the cautionary statements set forth in this Annual Report on Form 10-K. 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 ~~form~~Annual Report on Form 10-K references to “UBI Blockchain Internet Ltd.,” “~~UBI~~JA Energy,” “UBI Blockchain Internet, Ltd., formerly known as JA Energy,” “UBI,” “the Company”, “we,” “us,” and “our” refer to UBI Blockchain Internet Ltd.

PART I

Item 1. Business

Corporate History

The Company was ~~organized~~incorporated in Nevada on August 26, 2010, ~~(Date of Inception)~~ under the ~~laws~~name ~~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 May, ~~and~~2011, atReshoot ~~the~~Production ~~time~~Company ofspun ~~spin~~ off ~~was listed on~~ the ~~Over-the-~~Company ~~Counter~~to its ~~Bulletin Board~~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.

OnIn orOctober ~~about~~2014, ~~September~~pursuant 30to the terms of an Irrevocable Asset and Liability Exchange Agreement, dated as of October 15, 2014, by and among the ~~Board~~Company, ofJames ~~Directors~~Lusk, ~~approved~~Mark DeStefano and T.J. Jesky, the ~~formation~~Company transferred all of aits ~~new~~assets ~~company~~and ~~called~~liabilities to its wholly owned subsidiary, Peak Energy Holdings, a Nevada corporation, ~~where~~(“Peak”) ~~each~~and ~~shareholder~~Peak inissued to the Company’s shareholders, ~~received~~ one share of ~~common of~~ Peak ~~Energy~~common ~~Holdings~~stock for each share of common stock owned in the Company and one share of ~~preferred~~Peak preferred stock ~~of Peak Energy~~ for each share of preferred ~~share~~stock owned in the Company~~. As~~ ~~part of~~ (the ~~transaction, the Company spun~~“Spin-~~off all its assets and liabilities into Peak Energy~~Off”). ~~Further,~~Following the ~~spin~~Spin-~~off~~Off, ~~subsidiary operated~~Peak operated as an independent entity separate ~~entity~~ from the Company with new management ~~operating the current core business of Peak Energy for the benefit of the original stockholders~~. The ~~effect~~Spin-Off ~~of this action~~ 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.

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

On ~~November~~May 2116, ~~2016~~2017, the ~~Company~~Board ~~changed~~of ~~its~~Directors ~~corporate~~of ~~name~~the toCompany ~~UBI~~ratified ~~Blockchain~~and ~~Internet,~~approved ~~LTD,~~an ~~and~~Acquisition ~~changed~~Agreement between the ~~state~~Company ofand ~~incorporation~~UBI ~~from~~Shenzhen. Under the ~~State~~terms of ~~Nevada~~the toAgreement, ~~the~~UBI ~~State~~acquired 100% ownership of ~~Delaware~~UBI ~~pursuant~~Shenzhen in exchange for the issuance to aUBI ~~plan~~Shenzhen’s shareholders of ~~conversion~~25,000,000 ~~about~~shares ~~which~~of ~~the~~UBI ~~Company~~unregistered ~~adopted~~restricted aClass ~~new~~C ~~certificate of~~common ~~incorporation~~stock. ~~under~~Upon ~~the~~completion ~~laws~~ of the ~~State~~acquisition, UBI Shenzhen became a 100% owned subsidiary of ~~Delaware~~UBI.

OnAbout ~~May~~UBI ~~16, 2017, the Company acquired 100% ownership of~~ Shenzhen Nova E-commerce, Ltd., a private Shenzhen Chinese corporation in exchange for 25,000,000 unregistered restricted Class C common shares. In April 2017 Shenzhen Nova E-commerce began its operations of an online store in China selling a wide range of products including maternal and infant products, cosmetics, wine, household goods, digital and luxury products.

UBI ~~Blockchain~~Shenzhen ~~Internet~~was ~~Ltd.~~formed ~~business~~as ~~encompasses~~a ~~the~~private ~~research~~Shenzhen ~~and~~Chinese ~~application~~company ofon ~~blockchain~~May ~~technology~~26, ~~with~~2016, aunder ~~focus on~~ the ~~Internet of~~name ~~things~~Nova ~~covering~~Cross-Border ~~areas of food~~E-Commerce, ~~drugs~~ and ~~healthcare.~~operates an ~~Management~~online ~~plans~~store ~~to focus its business~~ in ~~the~~China ~~integrated~~selling ~~wellness~~a ~~industry, by~~wide ~~providing~~range ~~procedures~~of ~~for~~products ~~safety~~including maternal and ~~effectiveness~~infant inproducts, ~~food~~cosmetics, ~~and drugs~~wine, ~~but~~household ~~also~~goods, digital ~~preventing counterfeit or fake food~~ and ~~drugs. With~~luxury ~~the~~products ~~advancement~~via ofits ~~the~~Oya ~~blockchain technology~~Mall, ~~the Company plans to trace~~ a ~~food~~cross-border ore-commerce ~~drug~~platform. ~~product~~This ~~from~~website ~~its~~entered ~~original~~into ~~source within~~operation ~~the~~in ~~context of the internet of things to the final consumer~~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

	●	Establish and maintain strategic collaborations with product suppliers

	●	Obtain financing to implement the business activities

Overview

UBI’s Blockchain Internet ~~business~~is ~~includes~~a company focused on research & development and application of blockchain technology, ~~which~~including ~~includes~~the combination of Internet of Things (“IoT”) ~~technology,~~ ~~pharmaceutical research~~ and ~~manufacturing~~other ~~technology for the health industry, and platform trading technology for the financial capital markets, which together, we refer to as IBSH technology. These technologies include well~~high-~~established~~tech technologies~~, such~~ asto ~~Big Health Industry Technology and Financial Capital Market Technology. There are also emerging, forward-looking, technologies such as blockchain and IoT technologies. We are familiar with big~~ health ~~and~~industry ~~financial~~issues ~~capital~~prevalent ~~markets; however, we are not yet familiar with blockchain and the Internet of Things. We have matured~~ in ~~the above-mentioned technology in the chest holds 50%~~ ~~of the health and financial capital of the part~~China. For the other 50%, we have hired professional and technical personnel to conduct research and master the same time, and universities and other research institutions to discuss cooperation and establish a joint R & D center platform. IBSH technologies will be our core focus technologies. They will become our patented intellectual property. With the development of our technologies, we will conduct systematic research integration, development of a complete set of safety control system, tentatively named “UBI Security Shield” which will be first applied to food and drug safety control.

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

~~IBSH~~UBI ~~technical~~has ~~definition:~~established ~~The~~a ~~blockchain~~dedicated R&D team, ~~Internet~~developed ofin ~~things,~~cooperation ~~big~~with ~~health~~the ~~industry,~~Hong ~~financial~~Kong ~~capital~~Polytechnic ~~market~~University ~~technology~~(HKPU), ~~integration~~and has obtained ~~technology.~~approval ~~Our~~from ~~technology~~the ~~has~~Hong ~~two~~Kong ~~major~~government ~~characteristics:~~for ~~First~~the blockchain project, ~~the~~titled ~~forward~~“Blockchain-~~looking~~Based Food and ~~innovative~~Drug ~~technology~~Counterfeit Detection and Regulatory System”, ~~blockchain~~coded ~~and the~~as ~~Internet~~“UIM/331”. ofInformation ~~things~~related isto athis ~~technology~~project ~~for~~is ~~the~~publicly ~~future~~available ~~world~~on ~~with~~Hong Kong ~~forward-looking~~Special ~~and~~Administration ~~innovative~~Region ~~technologies.~~(“HKSAR”)’s ~~Second,~~official ~~management~~website at http://itf.gov.hk/l-eng/Prj-eng/Prj_Search_Index.asp. ~~believe~~At the ~~commercial~~same ~~value~~time, ofUBI ~~our~~cooperates ~~technology~~with ~~will~~blockchain ~~have~~experts aand ~~strong~~technical ~~practical~~teams ~~application~~from ~~and~~Germany, itIndia ~~will~~and ~~combine~~other ~~with~~countries ~~the~~and ~~industry~~regions, committed to ~~deliver~~the adevelopment ~~commercial~~of ~~value~~blockchain and its application in health industry.

~~Blockchain,~~On ~~refers~~August to15-16, a2018, ~~distributed~~UBI ~~database~~together ~~that~~with isother ~~used~~founders toand ~~maintain~~sponsors, organized a ~~continually~~Global ~~growing~~Blockchain ~~list~~Cooperation ofAlliance ~~ordered~~Forum ~~records~~at the ~~(called~~Company’s ~~blocks)~~Hong Kong Cyberport headquarters. ~~Each~~More than 200 people who are blockchain experts, scholars, lawyers, financiers ~~block~~and ~~contains~~entrepreneurs, afrom ~~timestamp~~universities, research institutes, and amedia ~~link~~from toover ~~the~~20 ~~previous~~countries ~~block~~and regions attended the event. ~~Blockchain~~UBI introduced ~~has~~and demonstrated the ~~characteristics~~results of ~~“decentralization”~~ its blockchain development and application at the conference, and proposed the concept “~~tamper-proof”~~2018, the genesis of applied blockchain technology.”

~~Internet~~UBI ofis ~~Things,~~optimistic ~~embedded~~about ~~physical~~blockchain ~~devices,~~technology ~~vehicles~~because ~~(also~~blockchain ~~referred~~is toan asinnovative ~~“networking~~form ~~devices”~~of ~~and~~combination ~~“smart~~of ~~devices”), buildings~~computer ~~and~~skills ~~other~~such ~~objects~~as ~~embedded~~distributed data instorage, ~~electronic~~point-to-point ~~technology~~transmission, ~~software,~~consistent ~~sensors~~mechanisms, and ~~brakes~~encryption ~~are~~algorithms. ~~connected~~Owing ~~via~~to ~~the~~its ~~Internet~~unique ~~and~~characteristics ~~enable~~such ~~these~~as ~~objects~~being totraceable ~~collect~~ and ~~exchange~~modification ~~data~~resistant, ~~for~~decentralized ~~network~~and ~~connectivity~~open transparent. ~~IoT~~Blockchain ~~allows~~technology ~~remote~~can ~~sensing~~be orused ~~remote~~to ~~control~~effectively address the safety and quality issues of ~~objects through~~products ~~existing~~and ~~network~~services ~~infrastructures~~in tothe ~~create~~health ~~opportunities~~industry. ~~for~~Monitored ~~more~~by ~~direct~~the technology, the factitious factors are eliminated. The integration of ~~the~~Internet ~~physical~~of ~~world~~Things ~~into~~“IoT”, ~~computer-based systems~~Virtual ~~and~~Reality to“VR”, ~~increase~~Augmented ~~efficiency~~Reality “AR”, ~~accuracy~~Artificial Intelligence “AI”, and ~~economic~~other ~~scale~~technologies will greatly improve the application level and effectiveness.

~~Industry~~The ~~Trends~~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.

~~Recent~~UBI ~~advances~~has indeveloped ~~streamlining~~a ~~video,~~plan ~~monitoring~~dedicated ~~sensors~~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, ~~high~~which will be an internet-~~speed~~based ~~broadband~~blockchain network capable of worldwide coverage, which we believe will enable connections through the internet between natural persons, ~~introducing~~medical ~~wireless~~institutions, ~~standards~~and ~~(such~~providers of health products and health services. We may also describe it as ~~Bluetooth~~a value oriented or trust internet, to differentiate it from the current information internet. A trust ~~low~~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-~~power)~~edge thinking. We believe this future model for health differentiates itself from the current health practice in that it is built on trust and ~~other~~safeguard ~~technologies~~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 ~~brought~~all ~~many~~one’s ~~new~~needs ~~opportunities~~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 ~~new~~concerns ~~choices~~about “clouds”. What is more important is that it will protect data privacy with clustered blockchain technology, so as to truly realize the ~~modern~~data ~~society~~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 ~~humankind~~serve the human health. Kang Chain Cloud establishes a convenient cloud storage, ~~Traditional~~a ~~industries~~private ~~also~~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 ~~opportunities~~communities ~~due~~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 ~~technological~~peer, ~~advances~~group to group, and ~~innovations~~zero distance will naturally make the cost of exchange down to zero, value and speed maximized, and trusted. The ~~emergence~~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 ~~development~~Kang Chain Cloud. This is a voluntary consumer community of ~~blockchain~~the new era built on mutual understanding and ~~IoT~~trusting ~~technologies~~with their common needs and shared values.

Management believes Blockchain technology has shown considerable adaptability and acceptance in recent years and many market segments are seeking to integrate blockchain technology into their operations. Although technology is mainly used in the financial services industry at present, the blockchain has also begun to enter into more markets. For example, counterfeit drugs in the pharmaceutical industry are hindered by using the characteristics of blockchain technology “tamper proof”. The adaptability of blockchain to a broad range of industries has led to the growing attention it has received in the past few years.

Blockchain technology and the Internet of things has aroused widespread concern and applied research. IBM, Bill Gates Foundation, Samsung, Tsinghua University, Peking University, Hong Kong Polytechnic University and China Wanxiang Group have started the research.

UBI management believes that blockchain technology and the Internet of things have contributed to the emergence of industry information and technology solutions. By integrating the block chain technology with IoT as the core, it is possible to establish a seamless industrial chain and achieve food and drug safety control and enterprise relationship management. Internet of Things is an extension and continuation of the Internet. The Internet of Things can increase the popularity and wider use of the Internet by integrating objects that interact through radio frequency identification (RFID) devices, infrared sensors, global positioning systems, laser scanners, and other information sensing devices so that the height distributed network of devices communicate with humans and other devices in real time. The Internet of Things is a completely new opportunity for a host of new applications based on the Internet of Things that promise to improve the quality of life. In recent years, the Internet of Things has been integrated with the blockchain, exchange and communication to realize the intelligent identification, location, tracking, monitoring and management of the network. This technology is still in its infancy.

A universal healthcare system covers all citizens seeking to achieve efficiencies by integrating the basic functions of healthcare delivery, health insurance, distribution of healthy food and drug safety and labor relations management. Based on the full integration of internet of things with blockchain technology, this technology can change old systems. Blockchain technology is a distributed database that maintains a continuously-growing list of records called blocks. Each block contains a timestamp and a link to a previous block. The data in a block cannot be altered retrospectively. Blockchain has characteristics such as decentralization, openness and transparency, autonomy, security of information that “tamper-proof”, and anonymity, these features can strengthen solution to drug and food safety issues, as well as getting more meaningful solution to enterprise labor relations management. Management believes the age of blockchain and IoT is coming.

~~Blockchain~~Industry ~~technology-based applications~~Trends

~~UBI~~Blockchain ~~management~~techniques ~~plans~~have shown considerable adaptability in recent years, as various market sectors have sought to ~~focus~~find ~~its~~ways of incorporating capabilities into their operations. onEspecially since 2014, the ~~integrated~~blockchain ~~health~~began to be applied in the industry, ~~providing~~and ~~food~~commerce, and the ~~drug~~blockchain ~~safety~~application ~~and~~has ~~effectiveness~~entered ~~protocols~~a new era in 2018. Previously, as ~~well~~the asblockchain ~~preventing~~was ~~counterfeiting~~mainly orapplied ~~counterfeiting~~in the cryptocurrency, which kind of ~~foods~~replaced ~~and~~the ~~medicines~~blockchain to mainly serve the financial industry. ~~With~~However, as the ~~advancement~~governments of ~~blockchain~~various ~~technology,~~countries westrengthen ~~can~~the ~~trace~~supervision of virtual currency, the ~~source~~cryptocurrency ofcircle ~~food~~will orbe ~~medicine~~restricted, inand the ~~context~~blockchain ofwill play an increasingly important role in industrial applications. Blockchain technology will be widely applied in the ~~Internet~~future in the fields of ~~Things~~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.

WeApplication ~~are~~based ~~now~~on ~~in the early stages of~~ blockchain technology, but we have good research, technical framework design, industry language and IT language conversion recognition of how blockchain and IoT interface with food and drug technology. Soon, we will utilize the technology in food and drug safety control.

~~Blockchain~~Our ~~technology~~management ~~has~~plans ato ~~very~~focus ~~wide~~its ~~range~~blockchain ofbusiness ~~potential~~on ~~applications.~~the ~~Blockchain~~health isindustry ain ~~distributed~~China, ~~ledger~~and ~~agreement~~give ~~that~~priority ~~allows projects or transactions~~ to befood ~~registered in a transparent manner~~ and ~~was originally developed for use in various industries to provide~~pharmaceuticals asafety ~~wide~~by ~~range~~providing ofeffective ~~services~~technical ~~including banking~~systems, ~~stock~~to ~~trading,~~prevent ~~real~~counterfeit ~~estate~~foods and ~~even worldwide diamond sales~~pharmaceuticals. ~~More~~With ~~and~~the ~~more~~development ~~financial giants~~of ~~are joining~~ blockchain technology ~~applications~~, ~~research~~we ~~and~~can ~~development,~~trace ~~including~~the ~~IBM,~~entire ~~Microsoft,~~process ~~Intel,~~of ~~Blockstream and~~food ~~Thomson~~or ~~Reuters~~pharmaceuticals toin ~~accelerate~~an ~~further~~all-round ~~Blockchain~~way ~~technology~~in ~~as a development system. As~~ the ~~blockchain~~integration of technology ~~is becoming~~clusters ~~mature~~such ~~and~~as ~~secure~~IoT, itVR, ~~can~~AR, ~~play~~AI, aand ~~role~~robotics into ~~many~~provide ~~areas~~manufacturers and ~~management~~consumers ~~believes~~with ~~that~~ the ~~application~~maximum ~~area~~symmetrical ~~and~~information ~~development potential~~exchange ofthroughout ~~blockchain technology provide~~ the ~~Company~~whole ~~with~~manufacturing anand ~~opportunity~~logistics ~~to grow~~process.

~~Health~~We ~~Care~~are ~~Business~~now ~~Consideration~~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.

~~UBI~~Healthcare ~~management believes the global IoT in the healthcare~~ market ~~is growing at a significant rate of growth due to the growing demand for advanced healthcare information systems and the growing prevalence of chronic diseases and lifestyle-related diseases.~~

~~IoT~~Our management believes that with the improvement of people’s living standards and the growing health awareness, the era of ~~application~~comprehensive inhealth ~~healthcare~~care has arrived. Following the article “Health China 2030” published by China government, ~~such~~we came asto ~~telemedicine~~further understanding that healthcare, ~~medication~~genetic ~~administration~~testing, ~~clinical~~cell ~~surgery~~storage, ~~and~~precise ~~workflow~~health management, ~~inpatient~~personal health data storage and analysis are increasingly recognized by humans and will become rigid demands. Traditional health care, ~~etc~~methods are being subverted. In 2015, ~~helps~~“Health in China” was upgraded to China’s national strategy; in 2016, China launched the “Precision Medical Plan” with ~~compilation~~genetic ~~services~~testing ~~related~~technology as the main means; in 2016,“Health in China Outline 2030” plans to ~~diagnosis~~invest 60 billion yuan; in “The Development Plan for Emerging Industries of 2017”, ~~treatment~~genetic technology is included in National Document No. 1. In the United States, ~~care~~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 ~~rehabilitation~~nowadays the Japanese’s average life expectancy has reached 84 years old. ~~They~~Everybody ~~improve~~needs ~~communication~~health management. It is estimated that the market scale of ~~between~~China’s ~~patients~~health ~~and~~industry ~~healthcare~~will ~~workers,~~exceed ~~reducing~~10 ~~medication~~trillion ~~errors~~yuan ~~and~~by ~~providing~~2020, ~~better~~according ~~coordinated~~to ~~care~~China National Statistics Bureau.

~~The Market Opportunity~~Opportunities

Blockchain and the ~~Internet~~IoT ~~of Things~~ are technologies that affect the future. ~~UBI~~and ~~Company~~are ~~took~~important ways and means to ensure the ~~lead~~safety of health products and health services in ~~entering~~the health market. UBI is the first company to enter this market. ~~First, using~~Being ~~IBSH~~the first one of applying blockchain technology in the ~~big~~ health industry, will help ~~position~~ the company position and develop itself in this field. The ~~standard~~access ofin this market ~~access~~ is of ~~hard~~high criteria and ~~the~~ cost ~~is high~~. The ideas and beliefs of the UBI team ismake us optimistic about the future.

~~Blockchain~~In ~~technology~~conclusion, ~~can~~we ~~play~~believe athat ~~role~~the inglobal ~~many~~health ~~fields.~~market ~~Blockcchain~~has ~~transactions~~the ~~are~~potential ~~theoretically~~to ~~real-time.~~be ~~The block-based distributed accounting technology~~huge, ~~combined~~not ~~with~~only ~~its~~because ~~artificial intelligence and internet of things technologies, makes~~ it ~~possible~~has ~~for~~tremendous ~~countless~~market ofdividends ~~smart~~formed ~~technologies~~by toresources ~~connect~~that topeople ~~internet~~continuously ~~for greater security~~invest, ~~allowing~~but ~~technicians~~also tobecause ~~return to the point at which the problem occurred. One of potential applications of~~ this ~~technology~~market is ~~the~~related ~~creation~~to ofhuman ~~registers~~life ~~based~~and ~~on blockchain of IoT devices~~wellness, ~~and~~directly affecting the ~~use~~quality of ~~artificial~~human ~~intelligence~~life ~~programs to perform automated intelligent diagnostics~~ and ~~more~~happiness. ~~advanced functions~~Therefore, ~~which~~we ~~can ultimately~~will ~~lead~~seize ~~engineers~~the ~~and~~emerging ~~technicians~~technology toof ~~virtualize~~blockchain ~~clock~~and ~~backwards. At~~ the ~~same~~market opportunities ~~time,~~at ~~blockchain~~this ~~technology~~particular ~~can~~stage, ~~reduce~~from ~~audit costs;~~the ~~reduce~~perspective ~~distrust~~ of ~~central~~interests ~~node,~~as sowell ~~that~~as ~~flow~~the ofresponsibility ~~financial~~for ~~assets~~human islife ~~more transparent~~ and ~~convenient. In fact~~wellness, ~~current~~ ~~blockchain~~striving ~~technology~~for isthe ~~indeed~~safety ~~application~~ of ~~digital~~food ~~electronic payments to “block chain +” transition extension from financial sector gradually to IoT~~ and ~~other~~pharmaceuticals ~~non-financial areas which will trigger more~~ and ~~greater~~the ~~industrial~~safety ~~restructuring and~~of ~~revolution~~health services.

The Internet of Things is based on computer science, including network, electronics, radio frequency, induction, wireless, artificial intelligence, bar code, cloud computing, automation, embedded technology as an integrated technology. Internet of things is called the third wave of the world information industry revolution, after computer revolution, and the second internet revolution. Management believes that within 10 years, Internet of Things will be widely used in intelligent medicine, intelligent transportation, environmental protection, government work, public safety, safety home, intelligent home appliance, industrial monitoring, elderly care, personal health, intelligent building, green agriculture and breeding, surveillance, imaging, computers, mobile phones and other fields.

Blockchain technology is a good solution for: infrastructure investment, high maintenance costs and data security issues. Blockchain technology supports IoT which is an extension and more advanced stage of internet. Blockchain technology research and application will make IoT networking more efficient. Blockchain technology creates a shared, distributed, digital book between network nodes to record transactions, rather than storing them on a central server. This eliminates the need for central verification. It provides a way to create a consensus network without having to trust a single node, and data store does not need to be stored in a central server, but by sharing it to all nodes in network. Blockchain technology can also solve medical field of data privacy and other issues, such as custody of electronic medical records, safe storage of genetic data, and drug security.

Our Strategy

~~Our~~UBI ~~Group~~ will ~~plans~~firmly toand ~~grasp~~persistently dedicate itself in research, development, application and promotion of the ~~new~~blockchain ~~technologies~~technology to the health industry in China. We believe that this disruptive technology will profoundly affect the ~~future~~next ~~world~~ten years or even longer and will, ~~establish~~in aour ~~new~~opinion, ~~business~~benefit ~~model~~all ~~based~~humanity onin the ~~industrial~~ ~~and~~health ~~capital~~industry. ~~advantages~~Our ~~that~~mission weis ~~have~~to ~~already~~reshape ~~formed,~~the trust system and ~~create~~innovate the business model with blockchain technology. We will promote the ~~technical~~wide ~~advantages~~application of ~~UBI’s~~blockchain ~~IBSH.~~technology ~~Managements~~in the entity industry ~~wants~~and ~~UBI~~commerce, to ~~become~~explore afurther ~~world~~of ~~leader~~the inblockchain ~~excellence~~beyond its characteristics of value transfer.

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

~~To achieve corporate strategy, the company intends:~~6

●In order ~~Research~~to ~~and~~achieve ~~develop~~the ~~IBSH~~company’s ~~core~~strategy, ~~technologies~~UBI tohas ~~establish~~made ~~the~~a ~~leading~~market ~~position~~development ~~in this field~~plan:

~~At present,~~● weBy ~~have~~the ~~initially~~end ~~established~~of 2018, the ~~technical~~Company ~~framework~~will ~~and~~further improve the ~~core~~development and promotion of the ~~main~~consortium ~~body~~blockchain product. ● Starting from 2019, ~~with~~the company will develop the ~~combination~~“UBI ofGlobal ~~food~~Health Public Chain” with full efforts. Our strategic position and ~~drug~~ ~~use~~product deployment consists of “Kang-Chain Net”, ~~access~~“Kang-Chain toCloud” ~~our~~and ~~first~~“Kang-Chain ~~phase~~Community” ofto ~~research~~create and ~~experimental~~provide ~~results,~~comprehensive ~~that~~security ~~can~~services plan for human health. This plan is to be ~~practical~~completed ~~applications~~in three years. ● By the end of 2021, ~~and~~it ~~continuous~~will ~~technological upgrading~~be fully promoted and applied.

~~● Research and development of the main product and core product group~~Competitive Advantages

~~UBI’s planned first product will be a food and drug safety monitoring and control system~~1. ~~It will also be our core product. At the same~~ ~~time,~~Excellent wetechnical ~~plan to systematically develop healthy big data and cloud computing, food products, health and service products, cross-border e-commerce platform and global health and culture platform.~~team

7In 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 ~~Create~~blockchain ~~brand~~application ~~awareness~~system and ~~drive~~products ~~marketing~~through ~~company~~independent ~~products~~design and ~~services in key markets~~development.

WeThe ~~plan~~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 ~~position~~make analysis and design, optimize various frameworks and solutions from the ~~Company’s~~perspective ~~marketing~~of asthe ~~creating~~industry chain and ~~building~~supply chain, and has created a ~~corporate~~unique ~~brand~~blockchain ~~image~~traceability ~~globally~~system for safety purpose — consortium blockchain product. ~~All~~Meanwhile, ~~this~~we ~~will~~are ~~start~~deploying the UBI global health chain global system based on UBI blockchain technology world widely, in ~~China~~order to create Kang-Chain product group.

●3. We ~~Employ~~have ~~global~~reliable ~~professional~~resources ~~and~~in ~~technical~~China’s ~~personnel,~~health ~~scholars, professional management personnel~~industry.

WeIn ~~plan~~China, toUBI’s ~~hire~~management ~~professionals~~has ~~from~~rich ~~all~~experience ~~over~~and resources in the ~~world~~health industry, which can be used for scientific research and development, raw material production bases and other industrial chains. ~~Together~~The tocompany’s ~~create~~management ~~UBI~~is aalso ~~shared~~familiar ~~platform~~with the international pharmaceutical market and the food market.

●4. A ~~Coordinate~~good ~~with~~management ~~strategic partners in each of the target markets for marketing and distribution~~team.

WeOur ~~believe~~management, ~~that~~technical ~~international~~team ~~markets represent a significant growth opportunity for us~~ and weconsulting ~~intend~~team toare ~~expand~~the ~~sales~~leading oftalents ~~our intended products~~ and ~~services~~professionals ~~globally~~in ~~through~~their ~~selected retailers and strategic partnerships~~fields. WeThey ~~plan~~pursue tohigh ~~work with key partners in the~~quality ~~target markets to provide marketing and distribution expertise and assistance~~work. ~~Although~~They itare ~~may~~smart, ~~be challenging to gain market acceptance in these markets~~responsible, wecharitable ~~believe~~and ~~the~~gifted ~~assistance~~with ofvision ~~such~~and ~~experts~~innovation ~~will expedite the process~~spirit.

Competitive Strengths

1. Unique IBSH technology

Our technology is advanced, not only for its scientific characteristics, but also for maneuverability, derived from the design and understanding of technical structures. Technology itself is spiritual.

2. Creating a creative business platform through independent design and development.

We intend to build a comprehensive platform, including blockchain technology, the Internet of Things, the health industry and the stock market. Once established, this platform will support UBI’s global operations.

3. We have a good network in the health industry in China

In China, we believe the company’s management has a good network in the integration of 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 believes the Company’s management and consulting team, are the industry’s leading talent and professionals. They have a professional, quality, wisdom, and innovation.

Target Market

AtOur ~~present~~current target market is China, where we believe food and ~~drug~~pharmaceuticals safety ishas become a major challenge ~~for human beings~~. Counterfeit food and ~~drug~~pharmaceuticals ~~products~~ are very common in China, due to natural and man-made factors. Although the safety of food and pharmaceuticals ~~Chinese~~is ~~market.~~closely ~~These~~linked ~~problems~~to ~~are~~the ~~derived~~vital ~~from~~wellness ~~nature~~of ~~problems~~hundreds ~~and~~of ~~human~~millions ~~factors.~~of ~~The~~people, we believe that the laws and regulations governing food and pharmaceutical safety in China are not perfect ~~and~~ or complete and ~~law~~may ~~enforcement is~~ not ~~seriously~~be ~~implemented~~strictly enforced in many occasions. The occurrence of poison capsule events, vaccine ~~cases~~ incident, ginkgo leaf, licorice tablets and other major drug ~~cases,~~dealing ~~seriously affecting people’s physical~~ and ~~mental~~counterfeiting ~~health. Therefore~~cases, have ~~the~~had ~~safety~~serious ofaffects ~~food~~on ~~and medicine is closely linked to the vital interests of hundreds of millions of~~ people~~. So UBI~~’s ~~market~~ ~~for~~physical ~~food~~ and ~~drug~~mental ~~safety goals is accurate and huge~~health.

Sources of Income and Pricing

WeUBI ~~plan~~plans to ~~build~~develop a ~~platform~~series ~~and~~of ablockchain ~~number~~technology ofbased products, ~~that~~such ~~will~~as ~~generate~~private ~~revenues~~blockchain, consortium blockchain and ~~generate~~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 ~~delivering~~providing services and effective products to potential ~~targets~~target customers. The price will be determined by ~~demand~~the ~~and~~ market ~~pricing~~supply and demand. After initial ~~publicity~~promotion and marketing, the company’s products and services may have an impact on the ~~health~~existing ~~care~~healthcare industry. AsLooking ~~we look to the future~~ahead, emerging technologies will ~~trigger~~lead new trends in the ~~security~~health care industry, law enforcement, privacy protection, food and ~~drug~~pharmaceuticals safety. ~~aspects~~UBI ofwill ~~the~~produce ~~healthcare~~good ~~industry~~profit by providing specific blockchain solutions and systematic services.

Sales and Marketing

In the future ~~marketing of UBI platform and products~~, we will mainly gomarket ~~through~~UBI ~~the~~blockchain ~~Internet~~system ofand ~~Things~~products tothrough do online and offline store ~~marketing~~. 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 ~~the~~human ~~population~~beings and will be tailor-made for some clients. WeCurrently, we are ~~currently~~ paying attention to the development, formation and ~~needs~~demands of China’s “~~one~~One ~~belt~~Belt, ~~one~~One ~~road~~Road” ~~markets~~infrastructure initiative.

~~Management~~UBI ~~believes~~management ~~Chinese~~believe ~~consumers~~that ~~are~~UBI’s ~~more~~Global ~~likely~~Health toPublic ~~consider~~Blockchain ~~buying~~will abe our flagship product. ifOn ~~they~~this ~~see~~public itblockchain, ~~mentioned~~we not ononly aprovide ~~social-media~~services ~~site~~for ~~and~~health institutions, enterprises, hospitals, etc., but more importantly, our health public blockchain ~~likely~~network will connect various communities. In this case, peer-to-peer ~~purchase~~non-centralized amarketing ~~product~~will orbe ~~service~~realized, ifwhich will make marketing faster and lower in cost. Meanwhile, enterprises and consumers can establish a ~~friend~~common orvalue ~~acquaintance~~on ~~recommends~~consuming. itIt will also enable individuals in the community to establish their own health data leger on athe ~~social-media~~public ~~site~~chain, byso ~~word~~they can effectively and safely manage their own health data, and become the true manager of ~~mouth~~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.

Chinese consumers rely heavily upon peer-to-peer recommendations over general mass advertising. In general, the Chinese populace is skeptical of information from news sources and advertising and rely more on word-of-mouth from friends, family, and key opinion leaders, many of whom share information on social media.

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.

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.

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.

119

Employees

We have 18 full-time employees and we engage the services 4447 non-employee contractors. Within our workforce, 8 employees are engaged in product and business development and 10 employees are engaged in ~~business development,~~ finance, human resources, facilities, information ~~technology~~ technology and general management and administration. We expect the number of full -time employees to rise to ~~more~~about ~~than~~26 25 by the end of December ~~2017~~ 2018. 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.

Recent Event

On May 16, 2017, the Board of Directors of the Company ratified and approved an Acquisition Agreement with Shenzhen Nova E-commerce, Ltd., (“NOVA”), a private Shenzhen Chinese corporation. Under the terms of the Agreement UBI acquired 100% ownership of Nova in exchange for 25,000,000 unregistered restricted Class C common shares by UBI. With the NOVA ownership completed, the former 130 NOVA shareholders received UBI Class C common shares based on their pro-rata ownership of NOVA. With the NOVA acquisition completed and the name of the permit holder changed to UBI, and NOVA became a 100% owned subsidiary of the UBI.

The shareholders of NOVA converted their ownership of NOVA to UBIA’s Class C common shares. Following the conversion, NOVA shares were canceled. In China, the conversion of shares requires the Chinese authorities to cancel NOVA’s registered shares. The takeover formally takes place when the government cancels NOVA shares. The Chinese government approved the acquisition as of August 29, 2017.

About Shenzhen Nova E-commerce, Ltd

Shenzhen Nova E-commerce Ltd. (“NOVA”) was incorporated on May 26, 2016 and currently 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. Nova’s website became operational in April 2017.

Nova’s operations prior to the date of acquisition, included, but was 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 ● Establish and maintain strategic collaborations with product suppliers ● Obtain financing to implement the business activities

NOVA is registered in Qianhai Free Trade Zone, China. Its business operation is an e-commerce platform offering online retail service, via OYA Mall. From its inception on May 26, 2016 through April 2017, NOVA has been building its website and infrastructure. Nova has commenced its pilot operation in May 2017.

NOVA’s Chinese language website is: www.oyamall.com. The website is operational, where customers can buy products, including food, non-prescription medicine, skin care products etc. offered on the website. The website is not part of this Annual report, but referenced for informational purposes.

Item 1A. Risk Factors.

~~All~~As ~~parties~~a ~~and~~“smaller ~~individuals~~reporting ~~reviewing~~company”, ~~this~~we ~~prospectus~~are ~~and~~not ~~considering~~required ~~us as an investment should be aware of the financial risk involved. When deciding whether~~ to ~~invest~~provide ~~or not, careful review of~~ the ~~risk~~information ~~factors~~required ~~set~~by ~~forth herein and consideration of forward-looking statements contained in~~ this ~~annual report should be adhered to~~Item. Prospective investors should be aware of the difficulties encountered as we face all the risks including competition, and the need for additional working capital. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth would likely suffer. As a result, you could lose all or part of your investment.

~~You~~The above statement notwithstanding, shareholders and prospective investors should ~~read~~be ~~the~~aware ~~following~~that certain risks exist with respect to our company and our business, including those risk factors ~~carefully~~contained ~~before~~in ~~purchasing~~our most recent Registration Statement on Form S-1, as amended. If any of the following risks actually occur, our ~~common~~business, ~~stock~~financial condition, results of operations and prospects for growth would likely suffer. As a result, you could lose all or part of your investment.

WE HAVE LIMITED HISTORICAL FINANCIAL INFORMATION UPON WHICH YOU MAY EVALUATE OUR PERFORMANCE.

We have a limited operating history and we are subject to all risks inherent in a developing business enterprise. The Company has no revenues and has yet to develop any products for sale.

Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the development of blockchain technology with a focus on the Internet of things covering areas of food, drugs and healthcare and the competitive environment in which we operate. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages of research. We may not be able to successfully address these risks and uncertainties or successfully implement our operating and acquisition strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point that the investors may lose their entire investment. Even if we accomplish these objectives, we may not be able to generate positive cash flows or profits that we anticipate in the future.

Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern, THERE IS NO ASSURANCE THAT WE WILL BE ABLE TO CONTINUE AS A GOING CONCERN.

Our financial statements included with this Annual Report for the year ended August 31, ~~2017~~2018, have been prepared assuming that we will continue as a going concern. Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern in their audit report on our audited financial statements for the year ended August 31, ~~2017~~2018. Because the Company has been issued an opinion by its auditors that substantial doubt exists as to whether the Company can continue as a going concern, it may be more difficult for the Company to attract investors. Since our auditors have raised a substantial doubt about our ability to continue as a going concern, this typically results in greater difficulty to obtain loans than businesses that do not have a qualified auditors opinion. Additionally, any loans we might obtain may be on less advantageous terms. Our future is dependent upon our ability to obtain financing and upon future profitable operations from our business. We plan to seek additional funds from additional loans made to us by Tony Liu, our CEO or through private placements of our common stock. You may be investing in a company that will not have the funds necessary to continue to deploy its business strategies. If we are not able to achieve sufficient revenues or find financing to cover our expenses, then we likely will be forced to cease operations and investors will likely lose their entire investment.

WE MAY NOT BE ABLE TO ATTAIN PROFITABILITY WITHOUT ADDITIONAL FUNDING, WHICH MAY BE UNAVAILABLE TO US.

We have prepared audited financial statements for the fiscal year ended August 31, ~~2017~~2018. For the period from inception (August 26, 2010) through the year end for August 31, ~~2017~~2018, we experienced an accumulated deficit of $69,~~343~~447,~~426~~792. Our ability to continue to operate as a going concern is fully dependent upon the Company obtaining sufficient financing to continue its development and operational activities. The ability to achieve profitable operations is in direct correlation to our ability to generate revenues or raise sufficient financing. It is important to note that even if the appropriate financing is received, there is no guarantee that we will ever be able to operate profitably or derive any significant revenues from its operation. If we run out of cash reserves, we would be forced to cease operations.

No assurance can be given that the Company will obtain access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business strategies, will be available on acceptable terms. The inability of the Company to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of its operations and upon its financial conditions.

BASED ON OUR BURN RATE, IF we are unable to obtain additional funding our business will fail and our shares may be worthless.

We have limited financial resources. As of August 31, ~~2017~~2018, we had cash of $1523,~~406~~434, inventory of $23,448, current portion of prepaid stock-based salaries and consulting fees of $1493,~~300~~333,~~000~~ deposit and ~~office~~prepaid ~~equipment~~expenses ~~valued~~of at $1718,~~950~~093, ~~non-current~~office ~~portion~~equipment ofvalued ~~prepaid~~at ~~stock-based salaries, consulting fees of~~ $~~493~~9,~~333~~ 359, and ~~capitalized~~intangible ~~website~~assets ~~development costs~~ of $92127,~~035~~037 for total assets of $1694,~~918,724~~704. Our current burn rate is approximately $40120,000 per month. Based on our current burn rate, we will run out of funds immediately without additional capital. If we fail to raise sufficient funds to keep our business operational, investors may lose their entire cash investment. There is no assurance that we can raise funding or that we will have sufficient funds to repay any indebtedness, or that we will not default on our debt obligations, jeopardizing our business viability. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain additional financing, we will likely be required to curtail our business plans and possibly cease our operations.

THE NATURE OF OUR OPERATIONS ARE HIGHLY SPECULATIVE.

The success of our plan of operation ~~will~~depends ~~depend to a great extent~~ on ~~the~~our ~~operations,~~ability ~~financial~~to ~~condition~~develop and ~~management.~~commercialize ~~Our~~our ~~business concept~~blockchain ~~revolves~~based ~~around~~services ~~“developing~~and ~~IoT, e-blockchain,~~ products and other related technologies.” Our business model is not yet established in the industry and we will have to convince our customers to use our products and services.

Management believes that we will be successful in marketing our services, but there can be no assurance that we will be able to attract sufficient consumers to achieve profitability or even generate anything but minimal revenues. If our intended products and services are not accepted by consumers, we will fail.

COMPANY RISK FACTORS

Article IX of our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other stockholders.

Article IX of our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state or federal court located in the State of Delaware) shall be the exclusive forum for: (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer, employee, agent or stockholder of the corporation to the corporation or the corporation’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law or the corporation’s Certificate of Incorporation or Bylaws, (4) any action to interpret, apply, enforce or determine the validity of the corporation’s Certificate of Incorporation or Bylaws or (5) any action asserting a claim governed by the internal affairs doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other stockholders, which may discourage such lawsuits against us and our directors, officers and other stockholders. Alternatively, if a court were to find this provision in our Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

1511

BECAUSE OUR OPERATIONS ARE CONCENTRATED IN CHINA OUR STOCKHOLDERS WOULD FACE DIFFICULTY IN ENFORCING THEIR LEGAL RIGHTS UNDER UNITED STATES SECURITIES LAWS.

Our operations are concentrated in China and our stockholders would face difficulty in enforcing their legal rights under United States securities laws in light of our management’s location outside of the United States. Legal protections and remedies available to the company for certain harmful action taken against it will be pursued within the People’s Republic of China legal system, which differs from the U.S. legal system in significant ways. Because the company conducts operations outside of the U.S. it is difficult to pursue legal matters is subject to limitations imposed by other jurisdictions. It is limited ability for U.S. regulators’ to conduct investigations and inspections within China. There may be restrictions on the transfer of cash into and out of China, as well as on the exchange of currency, which may constrain the company’s liquidity and impede its ability to use cash in its operations.

U.S. investors may experience difficulties in attempting to effect a service of process and enforce judgments based upon U.S. Federal Securities Laws against our company and its non U.S. resident officers and directors.

We are a Delaware corporation and, as such, we are subject to the jurisdiction of the State of Delaware and the United States courts for purposes of any lawsuit, action or proceeding by investors herein. An investor would have the ability to effect service of process in any action on the company within the United States. However, since Mr. Tony Liu, our CEO, Chan Cheung, our CFO and two of our three directors reside outside the United States substantially all or a portion of the assets are located outside the United States. As a result, it may not be possible for investors to:

	●	Effect service of process within the United States against our non-U.S. resident officers or directors;

	●	Enforce U.S. court judgments based upon the civil liability provisions of the U.S. federal securities laws against any of the above referenced foreign persons in the United States;

	●	Enforce in foreign courts U.S. court judgments based on the civil liability provisions of the U.S. federal securities laws against the above foreign persons; and

	●	Bring an original action in foreign courts to enforce liabilities based upon the U.S. federal securities laws against the above foreign persons.

WE MAY NOT BE ABLE TO COMPETE WITH OTHER COMPANIES, SOME OF WHOM HAVE GREATER RESOURCES AND EXPERIENCE.

We do not have the resources to compete with larger providers of these similar services at this time. With the limited, if not minimal, resources the Company has available, the Company may experience great difficulties in building a customer base. Competition from existing and future competitors could result in the Company’s inability to secure any new customers. This competition from other entities with greater resources and reputations may result in the Company’s failure to maintain or expand its business as the Company may never be able to successfully execute its business plan. Further, we cannot be assured that it will be able to compete successfully against present or future competitors or that the competitive pressure it may face will not force the Company to cease operations.

We may be unable to gain any significant market acceptance for our products and services or be unable establish a significant market presence.

Our growth strategy is substantially dependent upon our ability to market our intended products and services successfully to prospective clients in the target markets, which shall initially be China, Europe and the United States. This requires that we heavily rely upon our development and marketing partners in the target markets. Failure to select the right development and marketing partners in the target markets and other target markets will significantly delay or prohibit our ability to develop our intended products and services, market the products and gain market acceptance. Our intended products and services may not achieve significant market acceptance. If acceptance is achieved, it may not be sustained for any significant period of time. Failure of our intended products and services to achieve or sustain market acceptance could have a material adverse effect on our business, financial conditions and the results of our operations.

If potential users within the target markets do not widely adopt ~~online~~OUR BLOCKCHAIN TECHNOLOGY or UBI fails to achieve and sustain sufficient market acceptance, we will not generate sufficient revenue, IF ANY, and our growth prospects, financial condition and results of operations ~~could~~WILL beBE ~~harmed~~MATERIALLY ADVERSELY AFFECTED.

UBI may never gain significant acceptance in the marketplace and, therefore, may never generate substantial revenue or allow us to achieve or maintain profitability. Widespread adoption of virtual and online training portals in the target markets depends on many factors, including acceptance by users that such systems and methods or other options. Our ability to achieve commercial market acceptance for UBI or any other future products also depends on the strength of our sales, marketing and distribution organizations.

We may not be able to attract qualified professionals, academics, university professors and communication professionals from around the world, which will decrease the value of technological innovation platform and may make it difficult to differentiate UBI from other online services providers.

Our strategy includes developing relationships with professionals, academics, university professors and communication professionals from around the world. If we are unable to establish relationships with these professionals, academics, university professors and communication professionals that UBI’s technological innovation platform is not effective or that alternative products are more effective, or if we encounter difficulty promoting adoption or establishing UBI as a standard, our ability to achieve market acceptance of UBI could be significantly limited.

We may not be able to develop new products or enhance the capabilities of UBI to keep pace with our industry’s rapidly changing technology and customer requirements.

The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements, and evolving industry standards. Our business prospects depend on our ability to develop new products and applications for our technology in new markets that develop as a result of technological and scientific advances, while improving the performance and cost-effectiveness. New technologies, techniques or products could emerge that might offer better combinations of price and performance than UBI systems. The market for online or virtual healthcare market is characterized by rapid innovation and advancement in technology. It is important that we anticipate changes in technology and market demand. If we do not successfully innovate and introduce new technology into our anticipated product lines or effectively manage the transitions of our technology to new product offerings, our business, financial condition and results of operations could be harmed.

Cyber security risks could adversely affect our business and disrupt our operations.

The threats to network and data security are increasingly diverse and sophisticated. Despite our efforts and processes to prevent breaches, our devices, as well as our servers, computer systems, and those of third parties that we use in our operations are vulnerable to cyber security risks, including cyber attacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations, which could lead to interruptions, delays, loss of critical data, and loss of consumer confidence.

In addition, we may be the target of email scams that attempt to acquire sensitive information or company assets. Despite our efforts to create security barriers to such threats, we may not be able to entirely mitigate these risks. Any cyber attack that attempts to obtain our data and assets, disrupt our service, or otherwise access our systems, or those of third parties we use, if successful, could adversely affect our business, operating results, and financial condition, be expensive to remedy, and damage our reputation.

Our financial performance is subject to risks associated with changes in the value of the U.S. dollar versus local currencies.

Our primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar denominated sales and operating expenses worldwide. Weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency-denominated sales and earnings, and generally leads us to raise international pricing, potentially reducing demand for our intended products and services. In some circumstances, for competitive or other reasons, we may decide not to raise local prices to fully offset the strengthening of the U.S. dollar, or at all, which would adversely affect the U.S. dollar value of our foreign currency denominated sales and earnings. Conversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to our foreign currency-denominated sales and earnings, could cause us to reduce international pricing, incur losses on our foreign currency derivative instruments, and incur increased operating expenses thereby limiting any benefit. Additionally, strengthening of foreign currencies may also increase our cost of product components denominated in those currencies, thus adversely affecting gross margins.

We do not use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.

We may acquire other businesses, form joint ventures or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense.

We may pursue acquisitions of businesses and assets. We also may pursue strategic alliances and joint ventures that leverage our proprietary technology and industry experience to expand our offerings or distribution. We have no experience with acquiring other companies and limited experience with forming strategic partnerships. We may not be able to find suitable partners or acquisition candidates, and we may not be able to complete such transactions on favorable terms, if at all. If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business, and we could assume unknown or contingent liabilities.

Any future acquisitions also could result in the incurrence of debt, contingent liabilities or future write-offs of intangible assets or goodwill, any of which could have a negative impact on our cash flows, financial condition and results of operations. Integration of an acquired company also may disrupt ongoing operations and require management resources that we would otherwise focus on developing our existing business. We may experience losses related to investments in other companies, which could harm our financial condition and results of operations. We may not realize the anticipated benefits of any acquisition, strategic alliance or joint venture.

Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries.

To finance any acquisitions or joint ventures, we may choose to issue shares of common stock as consideration, which could dilute the ownership of our stockholders. Additional funds may not be available on terms that are favorable to us, or at all. If the price of our Common Stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using our stock as consideration.

~~THERE~~WE MAY NOT BE AABLE ~~POSSIBLE~~TO ~~INABILITY~~HIRE TOAND ~~FIND~~RETAIN ~~SUITABLE~~QUALIFIED EMPLOYEES.

In order to implement our business plan, management recognizes that additional staff will be required. No assurances can be given that we will be able to find ~~suitable~~qualified employees that can support our needs or that these employees can be hired on favorable terms. We do not plan to hire any additional employees until our cash flows can justify the expense.

Risks Related to Being a Public Company

IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD AND AS A RESULT, INVESTORS MAY BE MISLED AND LOSE CONFIDENCE IN OUR FINANCIAL REPORTING AND DISCLOSURES, AND THE PRICE OF OUR COMMON STOCK MAY BE NEGATIVELY AFFECTED.

The Sarbanes-Oxley Act of 2002 requires that we report annually on the effectiveness of our internal control over financial reporting. A “significant deficiency” means a deficiency or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting. A “material weakness” is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

As of August 31, ~~2017~~2018, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and (2) inadequate segregation of duties consistent with control objectives.

In addition, in connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover “material weaknesses” in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Failure to provide effective internal controls may cause investors to lose confidence in our financial reporting and may negatively affect the price of our common stock. Moreover, effective internal controls are necessary to produce accurate, reliable financial reports and to prevent fraud. If we have deficiencies in our internal controls over financial reporting, these deficiencies may negatively impact our business and operations.

IN THE FUTURE, WE WILL INCUR INCREMENTAL COSTS AS A RESULT OF OPERATING AS A PUBLIC COMPANY.

We will incur legal, accounting and other expenses as a fully-reporting public company. Moreover, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as new rules subsequently implemented by the SEC, have imposed various new requirements on public companies, including requiring changes in corporate governance practices. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Although we have not operated the business of UBI Blockchain as a public company, since JA Energy, the company’s predecessor, has been a public company since 2010 expect to incur approximately $25,000 of incremental operating expenses in 2018. We project that ~~the~~ the total incremental operating expenses of being a public company will be approximately $25,000 and $30,000 for our fiscal years ending in 2019 and 2020, respectively. The incremental costs are estimates, and actual incremental expenses could be materially different from these estimates. Unless we can generate sufficient revenues and profits, we may not be able to absorb the costs of being a public company.

As a result of operating as a public company, our management will be required to devote substantial time to new compliance initiatives.

We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and rules subsequently implemented and yet to be implemented by the U. S. Securities and Exchange Commission have imposed and will impose various new requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.

In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management, as required by Section 404 of the Sarbanes-Oxley Act. Compliance will require us to increase our general and administrative expense in order to pay added compliance personnel, outside legal counsel and consultants to assist us in, among other things, external reporting, instituting and monitoring a more comprehensive compliance function and board governance function, establishing and maintaining internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, and preparing and distributing periodic public reports in compliance with our obligations under the U.S. federal securities laws. We currently do not have an internal audit group, and we will evaluate the need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, the market price of our stock could decline.

Risks Related to Administrative, Organizational and Commercial Operations and Growth

The loss of our Chief Executive Officer or our inability to attract and retain highly skilled developers and other personnel could negatively impact our business.

Our success depends on the skills, experience and performance of Tony, Liu, our Chief Executive Officer, and other key employees. ~~The~~ The individual and collective efforts of these employees will be important as we continue to develop and as we expand our commercial activities. The loss or incapacity of existing members of our executive management team could negatively impact our operations if we experience difficulties in hiring qualified successors. We do not have any employment agreements in place for our executive officers; the existence of an employment agreement does not guarantee the retention of the executive officer for any period of time.

Our use of “open source” software could negatively affect our ability to sell our INTENDED products and subject us to possible litigation.

A portion of the technologies we use incorporates “open source” software. , Such open source software is generally licensed by its authors or other third parties under open source licenses. These licenses may subject us to certain unfavorable conditions, including requirements that we offer our intended products and services that incorporate the open source software for no cost, that we make publicly available source code for modifications or derivative works we create based upon, incorporating, or using the open source software, or that we license such modifications or derivative works under the terms of the particular open source license. Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose or provide at no cost any of our source code that incorporates or is a modification of such licensed software. If an author or other third party that distributes open source software that we use or license were to allege that we had not complied with the conditions of the applicable license, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages and enjoined from the sale of our intended products and services that contained the open source software. Any of the foregoing could disrupt the distribution and sale of our intended products and services and harm our business.

Risks Related to Intellectual Property

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

We plan to rely upon patents, trademarks, copyright and trade secret protection, as well as non-disclosure agreements and invention assignment agreements with our employees, consultants and third parties, to protect our confidential and proprietary information. Significant elements of our intended products and services are based on unpatented trade secrets and know-how that are not publicly disclosed. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed.

We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our intended products and services.

Our commercial success depends significantly on our ability to operate without infringing the patents and other intellectual property rights of third parties. For example, there could be issued patents of which we are not aware that our products infringe. There also could be patents that we believe we do not infringe, but that we may ultimately be found to infringe. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products infringe. For example, pending applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our product infringes.

Our software is built upon open-sourced code and platforms. Nevertheless, there is a risk a third party may assert that we are employing their proprietary technology without authorization. If a court held that any third-party patents are valid, enforceable and cover our products or their use, the holders of any of these patents may be able to block our ability to commercialize our products unless we obtained a license under the applicable patents, or until the patents expire. We may not be able to enter into licensing arrangements or make other arrangements at a reasonable cost or on reasonable terms. Any inability to secure licenses or alternative technology could result in delays in the introduction of our products or lead to prohibition of the manufacture or sale of products by us.

Risks Related to Ownership of Our Common Stock

The price of our Common Stock may be volatile and may be influenced by numerous factors, some of which are beyond our control.

Factors that could cause volatility in the market price of our Common Stock include, but are not limited to:

●	actual or anticipated fluctuations in our financial condition and operating results;

●	actual or anticipated changes in our growth rate relative to our competitors;

●	commercial success and market acceptance of UBI;

●	success of our competitors in discovering, developing or commercializing products;

●	strategic transactions undertaken by us;

●	additions or departures of key personnel;

●	prevailing economic conditions;

●	disputes concerning our intellectual property or other proprietary rights;

●	sales of our Common Stock by our officers, directors or significant stockholders;

●	future sales or issuances of equity or debt securities by us;

●	business disruptions caused by earthquakes, tornadoes or other natural disasters; and

●	issuance of new or changed securities analysts’ reports or recommendations regarding us.

In addition, the stock markets in general have experienced extreme volatility that has been often unrelated to the operating performance of the issuer. These broad market fluctuations may negatively impact the price or liquidity of our Common Stock. In the past, when the price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business.

25UBI Blockchain Internet LTD, a hong Kong Company, AND TONY LIU control 99.1% OF THE TOTAL VOTING POWER OF OUR CAPITAL STOCK, allowING them to control the Company.

~~UBI~~As of August 31, 2018, UBI Blockchain Internet ~~LTD~~Ltd., a ~~hong~~Hong Kong ~~Company~~company ~~controls~~(“UBI Hong Kong”), beneficially owned by Tony Liu, our CEO, and Tony Liu controlled approximately 99.21% OFof ~~THE~~the ~~TOTAL~~total ~~VOTING~~voting ~~POWER~~power OFof ~~OUR~~our ~~CAPITAL~~outstanding ~~that~~capital ~~will~~stock. ~~allow~~As ~~them~~a result, UBI Blockchain Internet LTD and Tony Liu have the ability to control substantially all matters submitted to our stockholders for ~~the~~approval ~~Company.~~including:

As of August 31, 2017, UBI Blockchain Internet LTD., a Hong Kong Company, beneficially owned by Tony Liu, our CEO, controls approximately 99.2% of the total voting power of our outstanding capital stock. As a result, UBI Blockchain Internet LTD. will have the ability to control substantially all matters submitted to our stockholders for approval including:

a) election of our board of directors;

b) removal of any of our directors;

c) amendment of our ~~Articles~~Certificate of Incorporation or bylaws; and

d) adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.

As a result of its ownership UBI Blockchain Internet LTD, the Hong Kong company has the ability to influence all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by UBI ~~Blockchain Internet LTD, the~~ Hong Kong ~~company~~or Tony Liu could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of shareholder’s ~~your~~investments ~~investment~~ in the Company may decrease. UBI ~~Blockchain Internet LTD, the~~ Hong Kong’s ~~company~~and Tony Liu’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price

Our Common Stock is or may become subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. If our Common Stock is or becomes subject to the “penny stock” rules, it may be more difficult for investors to dispose of our Common Stock and cause a decline in the market value of our Common Stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.

FUTURE SALES OF SHARES BY EXISTING CONTROLLING STOCKHOLDERS COULD CAUSE OUR STOCK PRICE TO DECLINE, FURTHER, CERTAIN SHARES OF OUR COMMON STOCK ARE RESTRICTED FROM IMMEDIATE RESALE.

If our existing controlling stockholder sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. As of August 31, ~~2017~~2018, we have 30,~~717~~799,046 Class A Common Shares issued and outstanding. If in the future, he decides to sell his shares or if it is perceived that they will be sold, to the extent permitted by the Rules 144 and 701 under the Securities Act, the trading price of our common stock could decline.

We have authorized and unissued shares OF Class A, B and C COMMON stock that may be issued in the future, which would dilute your ownership in the Company.

Our authorized capital stock currently consists of 2,000,000,000 shares of common stock, $0.001 par value per share. The Company’s shares structure currently consists of 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. As of August 31, ~~2017~~2018 there are 30,~~717~~799,046 shares of our Class A Common Stock issued and outstanding; 6,000,000 shares of our Class B Common Stock issued and outstanding; and 73,~~400~~550,000 shares of our Class BC Common Stock issued and outstanding. The Board of Directors has a great deal of discretion, in the future, to issue more shares in each Class, without shareholder approval. The issuance of more shares of any Class would dilute your ownership in the Company, which would mean your percent of ownership in the Company would decrease.

HOLDERS OF OUR COMMON STOCK HAVE A RISK OF POTENTIAL DILUTION IF WE ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE.

Although our Board of Directors intends to utilize its reasonable business judgment to fulfill its fiduciary obligations to our then existing stockholders in connection with any future issuance of our common stock, the future issuance of additional shares of our common stock would cause immediate, and potentially substantial, dilution to the net tangible book value of those shares of common stock that are issued and outstanding immediately prior to such transaction. Any future decrease in the net tangible book value of our issued and outstanding shares could have a material effect on the market value of the shares.

2818

THE PRICE OF OUR CLASS C COMMON STOCK OFFERED IN THE OFFERING HAS BEEN ARBITRARILY ESTABLISHED BY OUR MANAGEMENT.

The offering price has been arbitrarily determined by our management and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. This is especially the case if an investment in our company results in a stock price as determined by the market less than our initial offering. In that case, shares in our company could be purchased in the open market below our initial offering price. This would result in a loss of money for any investors in this offering.

LOW-PRICED STOCKS MAY AFFECT THE RESELL OF OUR SHARES.

Penny Stock Regulation Broker-dealer practices in connection with transactions in “Penny Stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risk associated with the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock; the broker-dealer must make a written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Therefore, the Company’s stock will become subject to the penny stock rules and investors may find it more difficult to sell their securities, should they desire to do so.

Item 1B. Unresolved Staff Comments.

~~The~~Not ~~Company filed a Registration Statement on Form S-1 on May 9, 2017~~applicable. ~~The Registration Statement received comment letters from the SEC that are still be addressed through subsequent amendments.~~

Item 2. Properties.

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 Blockchain Internet, LTD. (a Hong Kong Company) at nothe ~~cost~~Hong toKong ~~the~~ Company’s cost. UBI Hong Kong owns 30,000,000 ~~shares~~ shares of the Company’s Class A common stock, Tony Liu, beneficial owner of the Hong Kong Company owns 6,000,000 shares of the Company’s Class B common stock; and 40,000,000 shares of the Company’s C common stock. ~~UBI Hong Kong will not seek reimbursement for providing this administrative space.~~

Item 3. Legal Proceedings.

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 4. Mine Safety Disclosures.

Not Applicable

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a) Market Information

~~UBI~~The ~~Blockchain~~Company’s ~~Internet,~~Class ~~Ltd.,~~A ~~formerly known as JA Energy~~ Common Stock, par value $0.001 ~~par~~per ~~value~~share, ~~can~~is bequoted ~~found listed~~ on the ~~OTC-QB~~OTCQB under the symbol: UBIA. The Company’s Class B and Class C Common Stock are not quoted.

There has been limited trading of the Company’s ~~stock,~~Class ~~since~~A itCommon ~~was~~Stock ~~listed,~~and there ~~are~~can be no assurances given that a market will ever ~~develop~~ develop for the Company’s ~~stock~~Class A Common Stock.

The following table sets forth the range of high and low trading price information for the ~~common~~Class ~~stock~~A Common Stock during the quarterly ~~periods~~ ~~indicated~~periods ~~(as retroactively adjusted for the January 20, 2016 1 for 200 reverse stock split)~~indicated.

Year ended August 31, 2017	High		Low
Year ended August 31, 2018	High		Low
First Quarter	$	013.5300	$	04.5300
Second Quarter	$	3115.2000	$	01.5500
Third Quarter	$	254.0090	$	23.0500
Fourth Quarter	$	13.90	$	4.46

Year ended August 31, 2016	High		Low
Year ended August 31, 2017	High		Low
First Quarter	$	200.0053	$	100.0253
Second Quarter	$	107.0200	$	100.0255
Third Quarter	$	142.0140	$	01.5688
Fourth Quarter	$	015.5350	$	04.5375

(b) Holders of Common Stock

As of ~~December~~November 428, ~~2017~~2018, there were approximately ~~one~~144 ~~hundred~~holders ~~fifty~~of ~~(150)~~record of our Class A Common Stock, 1 holder of record of our Class B Common Stock and 192 holders of record of our Class C Common Stock.

In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.

(d) Securities Authorized for Issuance under Equity Compensation Plans

There are no outstanding grants or rights or any equity plan in place.

(e) Recent Sales of Unregistered Securities

OnThe ~~October 3, 2016 the~~ Company ~~issued~~did ~~30,000,000~~not ~~shares~~sell ofany unregistered ~~restricted~~securities ~~Class~~during 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”), a Hong Kong company, in exchange for $200,000. These shares were issued in reliance on the ~~exemption~~period ~~under~~covered ~~Section~~by ~~4(2) of~~ the ~~Securities~~Annual ~~Act~~Report ofon ~~1933,~~Form ~~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 nor a resident of the USA~~10-K.

On May 16, 2017, the Board of Directors ratified and approved an Acquisition Agreement with Shenzhen Nova E-commerce, Ltd., (“NOVA”), a private Shenzhen Chinese corporation. Under the terms of the Agreement UBI acquired 100% ownership of Nova in exchange for 25,000,000 unregistered restricted Class C common shares by UBI. We did not engage in any form of general solicitation or general advertising in connection with this transaction. Prior to the transaction, all of the NOVA shareholders were sent a notice that provided access to the type of information normally provided in a prospectus. The NOVA shareholders were afforded access to our management in connection with this transaction. It should be noted that all the NOVA shareholders, whom are all Chinese citizens have a close knit relationship as by social, cultural and business ties with each another. All of the NOVA shareholders voted in favor of the UBI acquisition of NOVA, with no dissenting shareholders; and, they agreed not to resell or distribute the securities. They were able to evaluate the risks and merits of the share exchange they are able to accept the economic risk in exchanging their shares. The exchanged shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption. UBI relied upon Section 4(2) of the Securities Act which is sometimes referred to as the “private placement” exemption.

On or about October 2, 2017, the Company issued 82,000 shares of unregistered restricted Class A common stock, with piggyback registration rights in exchange for legal services. Before the four individual shareholders received their unregistered restricted securities, they were known to us and our management, through pre-existing business relationships. We did not engage in any form of general solicitation or general advertising in connection with this transaction. The four individual shareholders were provided access to all material information, which they requested and all information necessary to verify such information and was afforded access to our management in connection with this transaction. The shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption. We relied upon Section 4(2) of the Securities Act for the offer and sale. We believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale.

(f) Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the years ended August 31, ~~2017~~2018 or August 31, ~~2016~~2017.

DESCRIPTION OF SECURITIES

COMMON STOCK

The holders of our Class A Common Stock are entitled to one vote per share, the holders of our B Common Stock are entitled to ten (10) votes per share, and holders of our Class C Common Stock are not entitled to vote. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Company. The Class C shares are not convertible into any Class A or Class B shares.

Our Common Stock does not provide the right to preemptive, subscription or conversion rights, and there are no redemption or sinking fund provisions or rights. Our Class A common stockholders are entitled to one non-cumulative vote per share on all matters on which stockholders may vote. Our Class B common stockholders are entitled to ten (10) non-cumulative votes per share on all matters on which stockholders may vote. The Class A and Class B shareholders vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of the Company. The Class C shareholders are not entitled to vote on any Company matters.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section of this Annual Report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions. The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Prospectus. The discussion of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

~~Business Overview~~20

UBI Blockchain Internet Ltd. business encompasses the research and application of blockchain technology with a focus on the Internet of things covering areas of food, drugs and healthcare. Management plans to focus its business in the integrated wellness industry, by providing procedures for safety and effectiveness in food and drugs, but also preventing counterfeit or fake food and drugs. With the advancement of the blockchain technology, the Company ~~plans to trace a food or drug product from its original source~~ ~~within the context of the internet of things to the final consumer.~~Background

WeUBI ~~have~~Blockchain ~~four~~Internet ~~competitive~~Ltd. ~~strengths~~business inencompasses the ~~blockchain~~research ~~internet~~and ~~industry:~~application ~~first,~~of ~~advanced~~blockchain ~~unique IBSH~~ technology with ~~maneuverability;~~a focus on the Internet ~~second~~of things covering areas of food, adrugs ~~creative~~and healthcare. Management plans to focus its business ~~platform~~in ~~through~~the ~~independent~~integrated ~~design~~wellness industry, by providing procedures for safety and ~~development;~~effectiveness ~~third~~in food and drugs, abut ~~good~~also ~~network~~preventing incounterfeit ~~the~~or ~~health~~fake ~~industry~~food and drugs. With the advancement of ~~China;~~the ~~fourth~~blockchain technology, the Company plans to trace a ~~good~~food ~~management~~or ~~team~~drug ~~and~~product ~~consulting~~from ~~team~~its original source within the context of the Internet of Things to the final consumer.

Our Growth Strategy

Our growth strategy depends to a large extent on our ability to reach potential customers who successfully bring their products to target markets. We plan to initially target the China market and gradually expand to Europe and the United States and beyond.

To achieve corporate strategy, the company intends:

● Research and develop IBSH core technologies to establish the leading position in this field

At present, we have initially established the technical framework and the core of the main body, with the combination of food and drug use, access to our first phase of research and experimental results, that can be practical applications, and continuous technological upgrading.

● Research and development of the main product and core product group

UBI’s planned first product will be a food and drug safety monitoring and control system. It will also be our core product. At the same time, we plan to systematically develop healthy big data and cloud computing, food products, health and service products, cross-border e-commerce platform and global health and culture platform.

● Create brand awareness and drive marketing company products and services in key markets

We plan to position the Company’s marketing as creating and building a corporate brand image globally. All this will start in China.

● Employ global professional and technical personnel, scholars, professional management personnel

We plan to hire professionals from all over the world. Together to create UBI a shared platform.

● Coordinate with strategic partners in each of the target markets for marketing and distribution

We believe that international markets represent a significant growth opportunity for us and we intend to expand sales of our intended products and services globally through selected retailers and strategic partnerships. We plan to work with key partners in the target markets to provide marketing and distribution expertise and assistance. Although it may be challenging to gain market acceptance in these markets, we believe the assistance of such experts will expedite the process.

Results of Operations

~~Year~~For the Year Ended August 31, ~~2017~~2018 Compared to the Year Ended August 31, ~~2016~~2017

~~For the fiscal year ended August 31, 2017 and 2016, we had no revenues.~~Revenues

~~Total~~During ~~operating~~the ~~expenses~~year ~~increased~~ended ~~$1,814,000~~August ~~from $13~~31,~~079~~ in2018 2016 to $1,827,079 in 2017. Total stock-based compensation increased $1,366,667 in 2017 from $0 in 2016. Total cash based employee compensation increased $270,449 in 2017 from $0 in 2016. Total cash based professional and ~~consulting fees increased $123,677 in~~ 2017 ~~from $0 in 2016. Other general and administrative expenses increased $53~~,~~207~~ ~~from $13,079~~the inCompany ~~2016~~had tono ~~$66,286 in 2017~~revenues.

The increase in operating expenses resulted from the Company’s engagement in the blockchain internet business which commenced September of 2016 and the acquisition of Nova which was completed in August 2017. To execute its development strategy, the Company hired professional staff and consultants commenced during the fiscal year ended August 31, 2017. Consequently, stock-based compensation, wages, professional fees, consulting fees and other general and administrative expenses increased compared to the fiscal year ended August 31, 2016.Expenses

	August 31, 2018		August 31, 2017		$Change		%Change
Operating Expenses:
Employee compensation (including stock-based compensation of$96,668 and $120,833, respectively)		834,430		463,782		370,648		80	%
Consulting fees (including stock-based compensation of$1,233,333 and $1,173,334, respectively)		1,238,383		1,198,334		40,049		3	%
Professional fees (including stock-based compensation of $335,872 and $0, respectively)		467,575		98,677		368,898		374	%
Depreciation and amortization		22,022		1,610		20,412		1,268	%
Occupancy		86,604		13,953		72,651		521	%
Research and development		153,870		-		153,870		-
Other G&A expenses		218,598		50,723		167,875		331	%
Total Operating Expenses		3,021,473		1,827,079		1,194,394		65	%

~~The~~For the year ended August 31, 2018, the Company had ~~other~~total ~~income~~operating -expenses ~~net~~ of $373,~~912~~021,473 as compared to $1,827,079 in ~~the~~2017, ~~fiscal~~an increase of $1,194,394, or 65%. For the year ended August 31, ~~2017~~2018, ~~which~~operating ~~resulted~~expenses ~~from~~consisted ~~the~~of ~~gain~~employee oncompensation ~~settlement~~of $834,430 (including stock-based compensation of ~~liabilities~~$96,668), consulting fees of $471,238,383 (including stock-based compensation of $1,233,333), professional fees of $467,575 ~~offset~~(including bystock based compensation of $335,872), rent expense of $86,604, research and development expenditure of $153,870 and other general and administrative expenses of $218,589. For the ~~accrued~~year ~~interest~~ended August 31, 2017, the Company’s operating expenses consisted of employee compensation of $463,782 (including stock-~~related~~based ~~party~~compensation ~~expense~~of $120,833), consulting fees of $91,~~663~~198,334 (including stock-based compensation $1,173,334), professional fees of $98,677, rent of $13,953 and other general and administrative expenses of $50,723. The increase in operating expenses resulted from the Company’s effort to develop Blockchain technology-based applications.

~~Net~~On ~~loss~~May ~~increased~~11, $12018,~~776,088~~ ~~from~~UBI Hong Kong paid HKPU a ~~net~~second ~~loss~~installment of HK $13643,~~079~~647 in(approximately ~~2016~~$82,000) tofor athe ~~net~~HKPU ~~loss~~project. The first payment of HK$1 561,~~789~~198 (approximately $71,~~167~~779) inwas ~~2017~~made on January 16, 2018. The ~~increase~~Company ~~resulted~~charged ~~from~~these ~~the~~payments as research and ~~Company’s~~development ~~engagement~~expenses. inThe ~~the~~Company ~~blockchain~~will ~~internet~~continue ~~business~~to ~~which~~charge ~~commenced~~future ~~September~~HKPU ofproject ~~2016~~payments ~~and~~as ~~the~~R&D ~~acquisition~~expense ofuntil ~~Nova~~such ~~which~~time as a ~~was~~“technologically ~~completed~~feasible” inworking ~~August~~model ~~2017~~of asthe ~~explained~~platform ~~above~~has been successfully produced.

For the year ended August 31, 2018, the interest expense accrued for loan from Tony Liu was $82,672.

For the year ended August 31, 2017, the interest expense accrued for loan from Tony Liu was $9,663.

Net Loss

For the year ended August 31, 2018, the Company had a net loss of $ 3,104,366 or $(0.03) per share of Class A, Class B, and Class C Common Stock and compared to a loss of $1,789,167 or $(0.02) per share of Class A, Class B, and Class C Common Stock for the same period last year.

Going Concern

The accompanying financial statements ~~included with this quarterly report~~ 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. AsAt of August 31, ~~2017~~2018, the Company ~~has~~had ~~accumulated~~cash ~~losses~~ of ~~approximately~~ $623,~~343,426~~434 ~~since inception.~~and ~~The~~current ~~Company’s~~liabilities ~~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~~$2,075,004. ~~Management~~For ~~plans~~the toyear ~~raise equity capital~~ended toAugust ~~finance~~31, ~~the~~2018, ~~operating and capital requirements of~~ the Company. ~~Amounts~~incurred ~~raised~~a ~~will~~net beloss ~~used to further development~~ of ~~the Company’s services~~$3, ~~to provide financing for marketing and promotion and for other working capital purposes. While the Company is putting forth its best efforts to achieve the above plans~~104, ~~there is no assurance that any such activity will generate funds that will be available for operations~~366.

~~These~~The ~~conditions~~Company’s ability to continue as a going concern is contingent upon the support of shareholders, the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity ~~substantial~~capital ~~doubt~~to ~~about~~finance the operating and capital requirements of the Company. Amounts raised will be used to further development of the Company’s ~~ability~~services, to provide financing for marketing and promotion and for other working capital purposes. While the Company is putting forth its best efforts to achieve the above plans, there is no plan to ensure that any such activities will generate funds for operation other than shareholders’ support. However, Tony Liu, as the largest shareholder of the Company, has been making personal loans to support our operations, and promising to continue making such loans available for our operation. This source of funding has provided our operations with essential assurance. Nevertheless, as athe ~~going~~Company ~~concern~~is entering new phases of development, the Company will need multi-sources of funding. The Company is planning to seek capital raise from the public or private sources. Our financial ~~statements do~~report has not ~~include~~covered ~~any~~potential ~~adjustments~~adjustment ~~that~~of ~~might~~funding ~~arise~~due ~~from~~to ~~this~~uncertainties ~~uncertainty~~arising thereof.

These conditions raise concerns about the Company’s ability to continue as a going concern. Our financial statements do not include any adjustments that might arise from the outcome of this uncertainty.

Liquidity and Capital Resources

As of August 31, ~~2017~~2018, the Company ~~had~~has total assets of $1694,~~918,724~~704 consisting of ~~office~~cash ~~equipment of~~ $1723,~~950~~434, ~~website~~inventory ~~development costs~~ of $9223,~~035~~448, prepaid stock-based compensation ~~salaries~~of $493,333, deposit and ~~consulting~~prepaid ~~fees~~expenses of $118,~~793~~093,~~333~~ office equipment of $9,359 and ~~cash~~capitalized intangible assets of $15127,~~406~~037 and total liabilities of $~~585~~2,~~506~~075,004.

The Company has not generated any income as of August 31, ~~2017~~2018. The working capital was provided by a major 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’s togoing ~~continue~~concern aswould abe ~~going concern~~restricted. 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.

~~New~~Critical Accounting ~~Standards~~Policies and Estimates

Management has evaluated recently issued accounting pronouncements through August 31, 2017 and concluded that they will not have a material effect on future financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

Index to Financial Statements

	Page
Financial Statements of UBI Blockchain Internet, Ltd.
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of August 31, 2017 and August 31, 2016	F-2
Statements of Operations for the years ended August 31, 2017 and August 31, 2016	F-3
Statements of Stockholders’ Deficit for the years ended August 31, 2017 and August 31, 2016	F-4
Statements of Cash Flows the years ended August 31, 2017, August 31, 2016	F-5
Notes to the Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of UBI Blockchain Internet, Ltd. (formerly JA Energy)

I have audited the accompanying consolidated balance sheets of UBI Blockchain Internet, Ltd. (formerly JA Energy) (the “Company”) as of August 31, 2017 and 2016 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of UBI Blockchain Internet, Ltd. (formerly JA Energy) as of August 31, 2017 and 2016 and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Michael T. Studer CPA P.C. Michael T. Studer CPA P.C.

Freeport, New York

December 6, 2017

F- 1

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Balance Sheets

	August 31, 2017			August 31, 2016
Assets
Current Assets
Cash	$	15,406		$	-
Current portion of prepaid stock-based salaries and consulting fees		1,300,000			-
Total Current Assets		1,315,406			-
Office equipment, net of accumulated depreciation of $7,845 at August 31, 2017		17,950			-
Other Assets
Non-current portion of prepaid stock-based salaries and consulting fees		493,333			-
Website development costs		92,035			-
Total Other Assets		585,368			-
Total Assets	$	1,918,724		$	-
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	71,425		$	68,419
Advances from former related party		-			26,981
Due to related party		514,081			-
Bank overdraft		-			1,202
Notes payable - former related party		-			50,000
Total current liabilities		585,506			146,602
Total liabilities		585,506			146,602
Stockholders’ Equity (Deficit):
Preferred Stock: $0.001 par value, 5,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding as of August 31, 2017 and 2016, respectively		-			1,000
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 30,717,046 and 217,046 shares issued and outstanding as of August 31, 2017 and 2016, respectively		30,717			217
Class B common stock, $0.001 par value, 500,000,000 shares authorized, 6,000,000 and 0 shares issued and outstanding as of August 31, 2017 and 2016, respectively		6,000			-
Class C common stock, $0.001 par value, 500,000,000 shares authorized, 73,400,000 and 0 shares issued and outstanding as of August 31, 2017 and 2016, respectively		73,400			-
Additional paid in capital		7,475,931			4,315,919
Stock subscription payable		90,521			90,521
Accumulated other comprehensive income		75			-
Accumulated deficit		(6,343,426	)		(4,554,259	)
Total stockholders’ equity (deficit)		1,333,218			(146,602	)
Total liabilities and Stockholders’ Equity (Deficit)	$	1,918,724		$	-

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

F- 2

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Operations

For the Years Ended

	August 31, 2017			August 31, 2016
Revenue	$	-		$	-
Operating Expenses:
Employee compensation (including stock-based compensation of $193,333 and $0, respectively)		463,782			-
Consulting fees (including stock-based compensation of $1,173,334 and $0, respectively		1,198,334			-
Professional fees		98,677			-
Occupancy		13,953			-
Other		52,333			13,079
Total Operating Expenses		1,827,079			13,079
Loss from Operations		(1,827,079	)		(13,079	)
Other Income (Expenses)
Interest expense - related party		(9,663	)		-
Gain on settlement of accounts payable and accrued liabilities		47,003			-
Gain on settlement of bank overdraft		572			-
Total Other Income (Expenses) - net		37,912			-
Net Loss	$	(1,789,167	)	$	(13,079	)
Net Loss per share of Class A, Class B, and Class C Common Stock
Basic and Diluted	$	(0.02	)	$	(0.06	)
Weighted Average Number of Class A, Class B, and Class C Common Shares
Basic and Diluted		76,849,922			217,046

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

F- 3

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Stockholders’ Equity

For the Years Ended August 31, 2017 and 2016

	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
Balance - August 31, 2015		100,000		$	1,000			217,046	$	217		-	$	-		-	$	-	$	4,315,919		$	90,521	$	(4,541,180	)	$	-	$	(133,523	)
Net loss for the year ended August 31, 2016		-			-			-		-		-		-		-		-		-					(13,079	)		-		(13,079	)
Balance - August 31, 2016		100,000			1,000			217,046		217		-		-		-		-		4,315,919			90,521		(4,554,259	)		-		(146,602	)
Class A, Class B, and Class C common stock agreed to be issued on September 15, 2016 for $200,000 cash (collected September 14, 2016 and October 11, 2016)		-			-			30,000,000		30,000		6,000,000		6,000		40,000,000		40,000		124,000			-		-			-		200,000
Finder’s fee paid reqarding September 15, 2016 change in control agreement		-			-			-		-		-		-		-		-		(20,000	)		-		-			-		(20,000	)
Contributed capital collected October 11, 2016		-			-			-		-		-		-				-		17,500			-		-			-		17,500
Retirement of preferred stock - November 30, 2016		(100,000	)		(1,000	)		-		-		-		-		-		-		(32,735	)									(33,735	)
Class C common stock issued for stock based compensation - April 3, 2017		-			-			-		-		-		-		8,400,000		8,400		1,671,600			-		-			-		1,680,000
Class A common stock issued to a consultant - May 1, 2017		-			-			500,000		500		-		-		-		-		1,479,500			-		-			-		1,480,000
Class C common stock issued to stockholders of Shenzhen Nova E-commerce Ltd. - August 29, 2017																25,000,000		25,000		(79,853	)		-		-			-		(54,853	)
Foreign currency translation adjustment								-		-		-		-		-		-		-			-		-			75		75
Net loss for the year ended August 31, 2017		-			-			-		-		-		-		-		-		-					(1,789,167	)		-		(1,789,167	)
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

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

F- 4

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Cash Flows

For the Years Ended

	August 31, 2017			August 31, 2016
Cash Flows from Operating Activities
Net Loss	$	(1,789,167	)	$	(13,079	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation expense		1,610			-
Stock-based compensation - consulting fees		1,173,334			-
Stock-based compensation - employees		193,333			-
Gain on settlement of accounts payable and accrued liabilities		(47,003	)		-
Gain on settlement of bank overdraft		(572	)		-
Increase (decrease) in accounts payable and accrued liabilities		25,358			144
Increase (decrease) in bank overdraft		(630	)		-
Net cash used by operating activities		(443,737	)		(12,935	)
Cash Flows from investing activities
Purchase of office equipment		(5,932	)		-
Net cash used by investing activities		(5,932	)		-
Cash Flows from financing activities
Due to related party		378,216			-
Advances from (repayments to) former related party		(26,981	)		12,935
Repayment of note payable to former related party		(50,000	)
Buyback of preferred stock		(33,735	)
Proceeds from sale of common stock - net		180,000
Contributed capital		17,500
Net cash provided by financing activities		465,000			12,935
Effect of exchange rate on cash		75			-
Net Increase (Decrease) in Cash		15,406			-
Cash and cash equivalents at beginning of period		-			-
Cash and cash equivalents at end of period	$	15,406		$	-
Supplemental Cash Flow Information:
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-
Non-cash Investing and Financing Activities:
Issuance of 8,400,000 shares of Class C common stock to 7 employees and 38 consultants on April 3, 2017 changed to prepaid stock-based salaries and consulting fees	$	1,680,000		$	-
Issuance of 500,000 shares of Class A common stock to consultant on May 1, 2017 changed to prepaid stock-based salaries and consulting fees	$	1,480,000		$	-
Issuance of 25,000,000 shares of Class C common stock to stockholders of Shenzhen Nova E-commerce, Ltd. (“Nova”) on August 29, 2017 in exchange for Nova Capital Stock:
Carrying Value of Nova assets and liabilities at August 29, 2017:
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		$	-

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

F- 5

UBI Blockchain Internet Ltd.

(Formerly JA Energy)

Notes to Consolidated Financial Statements

For The Years Ended August 31, 2017 and 2016

NOTE 1 – ABOUT 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, and, at the time of spin off was listed on the Over-the- Counter Bulletin Board. On November 21, 2016 the Company reincorporated in Delaware under the name UBI Blockchain Internet Ltd.

On September 30, 2014, the Board of Directors passed a resolution to form a new company called Peak Energy Holdings (Peak) with each shareholder in the Company receiving one share of common of Peak for each share of common stock in the Company and one share of preferred stock of Peak for each share of preferred stock of the Company.

On November 9, 2014, JA Energy (the “Company”) entered into an Irrevocable Asset and Liability Exchange Agreement (the “Agreement”). The Agreement dealt with the dividend spin-off of JA Energy’s wholly owned subsidiary, Peak Energy Holdings. At the JA Energy annual shareholder meeting, held on September 30, 2014, the shareholders of the Company approved the transfer of all of the assets and liabilities of the Parent into a wholly owned subsidiary. The subsidiary had the same characteristics and number of authorized and issued shares as the Parent, whereby all Preferred and Common shareholders in the Parent received a pro-rata stock dividend in the subsidiary that is equal to the number of shares they owned in the Parent on a one-for-one (1:1) basis. The major shareholders of the Company entered into a separate agreement with regards to the dividend spin-off. They agreed to and put into effect the following points upon the dividend spin-off of the Peak Energy Holdings from JA Energy:

F- 6

● Mr. James Lusk (the largest debtor of JA Energy) transferred all assets and liabilities, as of March 31, 2014, from JA Energy to the Subsidiary to the extent legally assignable.

● Two of the major shareholders in JA Energy transferred all ownership of their Preferred and Common stock held in the subsidiary to Mr. James Lusk. ● Mr. James Lusk transferred all of the common stock ownership he owned and controlled in JA Energy to the major shareholders. ● Mr. James Lusk provided a notarized signed letter addressed to the Company and auditor that he agreed to transfer all assets and liabilities, as of March 31, 2014, from the Parent to the Subsidiary to the extent legally assignable. ● JA Energy warranted that any new liabilities incurred on the books of JA Energy after April 1, 2014 would not be transferred to the subsidiary.

● JA Energy represented and warranted that there were no liabilities, actual or contingent, created in the subsidiary. Prior to the effective time of the transfer, the subsidiary would have no assets nor liabilities. ● JA Energy warranted that since April 1, 2014, with the exception of the preferred voting shares, no other shares were issued, awarded or pledged to be issued. The number of common shares issued and outstanding in JA Energy at March 31, 2014 were the same number of the shares issued at the date of transfer. ● Upon the completion of the transfer of assets and liabilities, shares were exchanged and the subsidiary was divested from JA Energy and now operates independent as a separate entity of JA Energy with its own management; ● Mr. James Lusk took control of Peak Energy Holdings, independent of JA Energy. ● All Parties indemnified and held harmless the other Parties from and against any and all losses, damages, liabilities, resulting or arising from these transactions.

The Agreement did not affect any other shareholders in the Company who maintained their share ownership of JA Energy, and have pro-rata ownership in Peak Energy Holdings following the dividend spin-off.

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 rights. Upon the conversion or other exchange of all outstanding shares of Class B Common Stock into or for shares of Class A Common Stock, all shares of Class C Common Stock shall be automatically, without further action by any holder thereof, converted into an identical number of fully paid and non-assessable shares of Class A Common Stock on the date fixed therefore by the Board of Directors that is no less than sixty-one days and no more than one hundred and eighty days following such conversion or exchange.

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.

F- 7

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 6).

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 6).

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 6).

NOTE 2 - GOING CONCERN

These 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. The Company has an accumulated deficit since inception of $6,343,426. The Company has not generated any meaningful revenues to date, and its 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. As described above, there was a change in control of the Company in October 2016.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These 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

The relevant accounting policies are listed below.

Basis of Accounting

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

F- 8

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 ~~year~~period. The diluted earnings (loss) per share of Class A, Class B ~~and~~ and Class C common stock is calculated by dividing the Company’s net income (loss) available to Class A, Class B and Class C C common shareholders by the diluted weighted average number of Class A, Class B and Class C shares outstanding during the ~~year~~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 ~~year~~period for any potentially dilutive debt or equity (none for atthe ~~August~~periods ~~31, 2017~~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 $23,434 cash at August 31, 2018, $23,270 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.

~~Website~~Intangible ~~development costs~~Assets

~~Website~~Intangible assets, including website development costs, software acquired to be marketed, and office software, are carried at cost less accumulated amortization. ~~Commencing~~Intangible inassets ~~year~~are ~~ending~~amortized ~~August~~using ~~31,~~the ~~2018,~~straight-line method over the estimated economic lives of the respective assets (5 years for website development costs ~~will~~and be5 ~~amortized~~years ~~over~~for anthe ~~estimated~~software ~~economic~~acquired ~~life~~to ofbe 5marketed ~~years~~and the office software).

As of August 31, 2107, the expected future amortization expense of website development costs is:

Year ended August 31,		Amount
	2018	$	18,407
	2019		18,407
	2020		18,407
	2021		18,407
	2022		18,407
	Total	$	92,035

Foreign Currency Translation

The reporting currency and functional currency of the Company is the United States Dollar. ~~The functional currency of Nova is the Chinese Renminbi (“RMB”).~~

~~Nova~~The ~~assets~~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 ($01.~~1518~~00 = 6.8375 RMB at August 31, 2018 and $1.00=6.5876 RMB at August 31, 2017). ~~Nova~~ UBI Shenzhen revenues and expenses are translated into United States dollars at weighted average exchange rates ($01.~~1517~~00 = 6.5202 RMB for the ~~period~~year ended August 29 31, ~~2017~~2018 toand $1.00=6.5920 RMB for the year ended August 31, 2017). 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 (principally the Hong Kong Dollar) are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant in the years ended August 31, 2017 and August 31, 2016, are reflected in income.23

Transactions denominated in currencies other than the functional currency (principally the Hong Kong Dollar) are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant for the years ended August 31, 2018 and 2017 were reflected in income.

Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is made in accordance with the provision of ASC 825-10-65, “Financial Instruments – Transition and Open Effective Date Information”. Although the estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies, the estimate presented are not necessarily indicative of the amounts that the Company could realize in current market exchanges. The carrying amounts reported in the consolidated balance sheets for cash and accounts payable and accrued liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments.

Fair Value Measurements

The Company complies with the provisions of ASC 820 “Fair Value Measurements and Disclosure “(ASC 820) in measuring fair value and in disclosing fair value measurements. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements required under other accounting pronouncements. ASC 820-10-35, Fair Value Measurements and Disclosures – Subsequent Measurement (ASC 820-10-35), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participant. Fair value measurement reflect the assumptions market participants would use in pricing an asset or liability based on the best information available. Assumptions include the risks inherent in a particular valuation technique and/or the risks inherent in the inputs to the model.

ASC 820-10-35 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1 Inputs – Level 1 inputs are unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value. An active market is a market in which transactions occur for the item to be fair valued with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Inputs – Level inputs are inputs other than quoted prices included within level 1. Level 2 inputs are observable either directly or indirectly. These inputs include: (a) Quoted prices for similar assets or liabilities in active markets; (b) Quoted prices for identical or similar assets or liabilities in market that are not active, such as when there are few transactions for the asset or liability, the prices are not current, price quotations vary substantially over time or in which little information is release publicly; (c) Inputs other than quoted prices that are observable for the asset or liability and (d) Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Inputs – Level 3 inputs are unobservable inputs for an asset or liability. These inputs should be used to determine fair value only when observable inputs are not available. Unobservable inputs should be developed based on the best information available in the circumstance, which might include internally generated data and assumptions being used to price the asset or liability.

When determining the fair value measurements for assets or liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets. When identical assets are not traded in active markets, the Company looks to market observable data for similar assets. Nevertheless, certain assets are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

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.

F- 9

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. For the periods presented, the Company had no revenues.

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 ~~ACS~~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 ~~consulting~~ expense over the period during which services are rendered.

Year end

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

~~Reverse~~Related ~~Stock Split~~Parties

~~All~~Related ~~references~~parties are considered to ~~numbers~~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 ~~shares~~the Company, its management, members of ~~our~~the ~~common~~immediate ~~stock~~families ~~and~~of ~~per-share~~principal ~~information~~owners inof the ~~accompanying~~Company ~~financial~~and ~~statements~~its ~~have~~management ~~been adjusted~~and ~~retroactively~~other toparties with ~~reflect~~which the Company’s ~~1-for-~~may ~~200~~deal ~~reverse~~with ~~stock~~if ~~split~~one ~~effected~~party oncontrols ~~January~~or ~~20,~~can ~~2016.~~significantly ~~The~~influence ~~par~~the ~~value~~management or operating policies ~~was~~of ~~not~~the ~~adjusted~~other asto aan ~~result~~extent that one of the ~~reverse~~transacting ~~stock~~parties ~~split~~might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions.

Recent Accounting Pronouncements

~~The~~Our ~~Company’s~~ management has evaluated ~~recently~~the ~~issued~~impact ~~accounting~~of ~~pronouncements~~Accounting ~~through~~Standards ~~August~~Updates 31(“ASUs”), ~~2017~~ and concluded that ~~they~~ ~~will~~ASUs ~~not~~may have ~~a material effect~~ impacts on our future financial ~~statements~~reports.

~~NOTE~~In 4May –2014, ~~ACQUISITION~~the OFFASB ~~NOVA~~issued EASU No. 2014-~~COMMERCE~~09, ~~LTD~~“Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes and replaces nearly all existing GAAP revenue recognition guidance, including industry-specific guidance. The authoritative guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The five steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as each performance obligation is satisfied. The authoritative guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The authoritative guidance requires significantly expanded disclosures about revenue recognition and was initially effective for fiscal years and the interim periods within these fiscal years beginning on or after December 15, 2016. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” This standard defers for one year the effective date of ASU 2014-09. The deferral will result in this standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period. We are presently studying the impact of ASU 2014-09 on our future financial statements.

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

~~The~~Item ~~acquisition has been accounted for as a recapitalization transaction in the accompanying consolidated financial statements~~7A. ~~Accordingly, the~~Quantitative ~~financial position~~ and ~~results~~Qualitative ofDisclosures ~~operations~~about ofMarket ~~Nova prior to the August 29, 2017 date of acquisition have been excluded from the accompanying consolidated financial statements~~Risk.

~~F- 10~~Not applicable.

~~The~~Item ~~carrying~~8. ~~values~~Financial ofStatements ~~the assets~~ and ~~liabilities~~Supplementary ~~of Nova at the August 29, 2017 date of acquisition consisted of:~~Data.

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

See financial statements and supplementary data required pursuant to this item beginning on page F-1 of this Annual Report on Form 10-K.

The following proforma information (unaudited) summaries the results of operations for the years ended August 31, 2017 and 2016 as if Nova was acquired on May 26, 2016 (Nova’s date of inception). The pro forma information is not necessarily indicative of the results that would have been reported had the transaction actually occurred on May 26, 2016, not is it intended to project results of operations for any future period.

	Year Ended August 31,
	2017			2016
	(Unaudited)
Revenue	$	-		$	-
Operating expenses:
Employee Compensation (including stock-based compensation of $193,333 and $0, respectively)		563,725			65,551
Consulting fees (including stock based compensation of $1,173,334 and $0, respectively)		1,198,334			-
Professional fees		98,677			-
Occupancy		85,188			57,508
Other		254,255			193,608
Total operating expenses		2,200,179			316,667
Loss from Operations		(2,200,179	)		(316,667	)
Other Income (expenses):
Gain on settlement of liabilities		47,575			-
Interest expense - related party		(10,409	)		-
Other income (expenses) - net		37,166			-
Net Loss	$	(2,163,013	)	$	(316,667	)
Net Loss per share of Class A, Class B, and Class C common stock - basic and diluted	$	(0.02	)	$	(0.05	)
Weighted average number of Class A, Class B, and Class C Common Shares outstanding - basic and diluted		101,712,936			6,860,882

F- 11

NOTE 5 – PREPAID STOCK BASED SALARIES AND CONSULTING FEES

Prepaid stock-based salaries and consulting fees at August 31, 2017 consist of:

	Fair value of stock issuance (Note 6)		Prepaid balance at August 31, 2017
1,450,000 shares of Class C common stock issued to 7 employees on April 3, 2017 pursuant to service agreements with a service term of one year expiring December 31, 2017	$	290,000	$	96,667
6,950,000 shares of Class C common stock issued to 38 consultants on April 3, 2017 pursuant to service agreements with a service term of one year expiring December 31, 2017		1,390,000		463,333
500,000 shares of Class A common stock issued to a consultant on May 1, 2017 pursuant to Consulting Agreement dated April 28, 2017 with a service term of two years expiring April 30, 2019		1,480,000		1,233,333
Total	$	3,160,000		1,793,333
Current portion				(1,300,000	)
Non-current portion			$	493,333

At August 31, 2017, there was $1,793,333 of unrecognized compensation costs related to shares of Class A and Class C common stock issued to employees and non-employee pursuant to service agreements. These costs are expected to be recognized as expense in the years ended August 31, 2018 ($1,300,000) and August 31, 2019 ($493,333).

NOTE 6 - 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, provide 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 Enterprises, 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 is being expensed evenly over the year ended December 31, 2017 (see Note 4). For the three and the year ended August 31, 2017, we recognized stock-based salaries expense of $212,619 and $582,889, respectively, and recognized stock-based consulting fees expe3nse of $494,787 and $1,160,621, 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 is being expensed evenly over the 2-year service period expiring April 30, 2019. For the three and the year ended August 31, 2017, we recognized stock-based consulting fees expense of $61,667 and $123,334 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.

F- 12

NOTE 7 - RELATED PARTY TRANSACTIONS

As described in Note 9, the Company was obligated to Mr. Mark DeStefano (“DeStefano”) for a $50,000 note payable and $26,981 for payments made on behalf of the Company. Subsequently, Mr. DeStefano advanced $1,285 to the Company. During the three months ended November 30, 2016 the Company satisfied these obligations. DeStefano had voting control of the Company from June 2014 (see Note 9) to October 24, 2016 (when the Company purchased from DeStefano the 1,000,000 shares of Preferred Stock for $33,735) through his ownership of the 1,000,000 shares of Voting Preferred Stock issued and outstanding (equivalent to 50,000,000 votes).

For the three months ended November 30, 2016, consulting fees paid to former related parties consists of a total of $15,000 paid to the two then directors of the Company and $10,000 paid to an entity controlled by DeStefano.

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 $2,833 at the August 31, 2017 exchange rate) per month. UBI Hong Kong owns 30,000,000 shares of the Company’s Class A common stock.

In the year ended August 31, 2017, Tony Liu, chief executive officer of the Company, paid a total of $514,081 of expenditures on behalf of the Company. The amount due to Tony Liu for these expenditures is interest bearing at a rate of 7% per annum. As of August 31, 2017, accrued interest amounted to $10,350. The advances and related accrued interest are due on demand.

NOTE 8 - 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 August 31, 2017, the Company had net operating loss carry forwards of approximately $1,444,245 that may be available to reduce future years’ taxable income through 2037. 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, due to the change in control, there are annual limitations on future net operating loss carry forward deductions.

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

At August 31, 2017 and 2016, deferred tax assets consisted of:

	August 31,
	2017			2016
Net operating loss caryforwards	$	505,486		$	357,611
Value allowance		(505,486	)		(357,611	)
Deferred tax assets – net	$	-		$	-

NOTE 9 - NOTES PAYABLE – Former Related Party

On April 4, 2014, the Company issued a One-year Promissory Note (“the Note”) in the amount of $50,000 to Mark DeStefano (“DeStefano) (see Note 7). The Note bore interest at 12% percent per annum with interest due each month. In the event that interest was not paid within three days from the time it was due the Note was to be considered in default and was to be fully due and payable. Additional consideration for the Note included the Chief Executive Officer of the Company giving the note holder his voting proxy for all of the shares he held with the exception of voting on a tender offer or a sale of the Company’s assets. As of May 8, 2014, the Note was in default.

On May 5, 2014, the Company issued a second One-Year Promissory Note (“the Second Note”) in the amount of $20,000 to the same stockholder noted above. The Second Note was issued with the restriction that the funds be used specifically to pay the Company’s Patent Counsel for fees to finalize certain patent filings and was secured by all patents and patent applications held by the Company. The Second Note was to bear interest at 12% percent per annum with interest due each month. In the event that interest was not paid within three days from the time it was due, the Second Note would be considered in default and would be fully due and payable.

On June 6, 2014, the Company received notices that it was in default of the two Promissory Notes described above. Rather than default on the Notes, the Company issued 1,000,000 shares of $0.001 par value Voting Preferred Stock in exchange for Notes Payable totaling $20,000 plus forgiveness of interest totaling $1,900. Additionally, the Company agreed to designate with the State of Nevada Secretary of State that each share of preferred carries the voting power of 50 common shares. Finally, the shareholder agreed to cancel the shares upon full payment of the $50,000 Note, without accrued interest and the sale of five units of the MDU.

F- 13

In October 2016, the $50,000 note payable was satisfied.

NOTE 10 – OTHER INCOME AND EXPENSE

During the three months ended November 30, 2016, the Company settled a bank overdraft of $942 for $370. This settlement resulted in income of $572.

On January 27, 2017, the Company entered into a Settlement Agreement with a former landlord satisfying a $35,868 accrued liability for $4,100. This settlement, along with an arrangement with another vendor, resulted in other income of $47,003.

NOTE 11 – REVERSE STOCK SPLIT

On January 20, 2016, the Company effected a 1-for-200 reverse stock split of its outstanding common stock, par value $0.001 per share (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each two hundred shares of the Company’s Common Stock issued and outstanding immediately prior to the Reverse Stock Split were automatically combined into and became one share of common stock. No fractional shares were issued as a result of the Reverse Stock Split and any stockholder who otherwise would have been entitled to receive fractional shares received an additional share. Also, as a result of the Reverse Stock Split, the per share exercise price of, and the number of shares of common stock underlying our warrants outstanding immediately prior to the Reverse Stock Split were automatically proportionally adjusted based on the 1-for-200 split ratio in accordance with the terms of such warrants. Share and per-share amounts of the Company’s common stock and warrants included herein have been adjusted to retroactively give effect to the Reverse Stock Split. The Reverse Stock Split did not alter the par value of the Common Stock, $0.001 per share, or modify any voting rights or other terms of the common stock.

NOTE 12 – SUBSEQUENT EVENTS

On October 2, 2017, the Company issued a total of 82,000 shares of Class A common stock to 4 individuals associated with the Company’s law firm for legal services rendered.

In September 2017, Nova entered into two lease agreements for office space in Shenzhen China. The first lease provides for monthly rent of RMB 12,353 or approximately $1,875 per month, and expires September 2020. The second lease provides for monthly rent of RMB 8,964 or approximately $1,320 per month and expires September 2019.

F- 14

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A~~(T)~~. 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 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 ~~not~~ effective. ~~Our~~The ~~disclosure~~reason we believe ~~controls~~our disclosure and ~~procedures~~control ~~were~~process ~~not~~ effective ~~because~~is ofdescribed in the ~~“material~~following ~~weaknesses”~~section ~~described below under~~ “Management’s ~~report~~ Report on ~~internal~~Internal Control ~~control~~ over ~~financial~~Financial ~~reporting,~~Reporting” ~~which are in the process of being remediated as described below under “Management Plan to Remediate Material Weaknesses~~.”

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and affected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:

	●	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2017. In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on its assessment, management has concluded that we had certain control deficiencies described below that constituted material weaknesses in our internal controls over financial reporting. As a result, our internal control over financial reporting was not effective as of August 31, 2017.26

AThe ~~“material~~Company’s ~~weakness” is defined under SEC rules as a deficiency~~management, orwith athe ~~combination~~participation of ~~deficiencies,~~its inChief ~~internal~~Executive ~~control over~~Officer ~~financial~~and ~~reporting~~Chief ~~such~~Financial ~~that~~Officer, ~~there~~assessed isthe ~~a reasonable possibility that a material misstatement~~ effectiveness of ~~a company’s annual or interim financial statements will not be prevented or detected on a timely basis by~~ the ~~company~~Company’s internal ~~controls. As~~control aover ~~result~~financial ofreporting ~~management’s~~as ~~review~~ of ~~the~~August ~~investigation~~31, ~~issues~~2018. ~~and~~In ~~results,~~making ~~and~~this ~~other~~assessment, ~~internal~~management used ~~reviews~~the ~~and~~criteria ~~evaluations~~set ~~that were~~forth ~~completed~~by ~~after~~ the ~~end~~Committee of ~~quarter~~Sponsoring ~~related~~Organizations toof the ~~preparation~~Treadway ofCommission ~~management’s~~(COSO) ~~report~~in onits ~~internal~~report ~~controls~~entitled “Internal ~~over~~Control-Integrated ~~financial reporting~~Framework ~~required~~(2013).” ~~for~~Based ~~this~~on ~~annual~~that ~~report~~assessment onunder ~~Form~~such ~~10-K~~criteria, management concluded that wethe ~~had~~Company’s ~~material~~internal ~~weaknesses in our~~ control ~~environment and~~over financial reporting ~~process~~was ~~consisting~~effective as of ~~the~~August ~~following:~~31, 2018.

1)As ~~lack~~ of aAugust ~~functioning~~31, ~~audit~~2018, ~~committee~~in ~~due~~accordance towith athe ~~lack~~financial and taxation rules of athe ~~majority~~jurisdiction, especially the requirements of ~~independent~~SEC and ~~members~~OTC-QB, the company has established and acompleted ~~lack~~its offinancial amanagement ~~majority~~and ofsupervisory ~~outside~~bodies. ~~directors on~~In ~~our~~the company’s board, ofthere ~~directors,~~are ~~resulting~~independent indirectors ~~ineffective~~who ~~oversight~~are inresponsible for the ~~establishment~~internal control and ~~monitoring~~auditing of ~~required~~the ~~internal~~company’s ~~controls~~financial ~~and~~management ~~procedures;~~process ~~and~~on behalf of the board.

2)With ~~insufficient~~the ~~written~~development ~~policies~~ and ~~procedures~~growth ~~for~~of ~~accounting~~the ~~and~~company, ~~financial~~the ~~reporting~~management ~~with~~believes ~~respect~~that tostrengthening ~~the~~financial ~~requirements~~management ~~and~~is ~~application~~the top priority. ofIn USparticular, ~~GAAP~~we ~~and~~should ~~SEC~~seek ~~disclosure~~to ~~requirements~~optimize the organizational structure.

We dohave ~~not~~initiated, ~~believe the material weaknesses described above caused any meaningful~~ or ~~significant~~plan ~~misreporting~~to ~~of our financial condition and results of operations for the fiscal year ended August 31~~initiate, ~~2017. However, management believes that~~ the ~~lack~~following ofseries ~~a functioning audit committee and the lack~~ of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.measures:

~~Management~~We ~~Plan~~will create a position to ~~Remediate~~segregate ~~Material~~duties ~~Weaknesses~~consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will represent the board to undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

~~Management~~We isbelieve ~~pursuing~~ the ~~implementation~~measures ofdescribed ~~corrective~~above ~~measures~~will tofurther ~~address~~strengthen ~~the~~our ~~material~~internal ~~weaknesses~~control ~~described~~over ~~below~~financial reporting. InWe anare ~~effort~~committed to ~~remediate~~ ~~the~~continuing ~~identified~~to ~~material~~improve ~~weaknesses~~our internal control processes and ~~other~~will ~~deficiencies~~continue to diligently and ~~enhance~~vigorously review our ~~internal~~financial reporting controls, and procedures. As we ~~have~~continue ~~initiated~~to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies or ~~plan~~determine to ~~initiate~~modify, ~~the~~ ~~following~~or ~~series~~complete, certain of the measures: described above.

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

We believe the remediation measures described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

Changes in Internal Control over Financial Reporting

~~There~~Except as noted above, 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 most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

~~None~~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 $1,023,766), 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 (approximately $58,501) on September 30, 2018. The balance is payable in a series of 8 payments ranging from RMB 300,000 (approximately $43,876) to RMB 1,500,000 (approximately $219,378) 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.

40In 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 $146,252) which is payable over the term of the Hotel Group Agreement in a series of milestone payments. The initial payment of RMB 400,000 (approximately $58,501) was due on or before September 2, 2018. The balance is payable in a series of 3 payments ranging from RMB 300,000 (approximately $43,876) to RMB 400,000 (approximately $58,501) 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. To date, the Company has not received the initial payment of RMB 400,000 (approximately $58,501) due the Company by September 2, 2018 under the Hotel Group Agreement.

PART III

Item 10. Directors, Executive Officer and Corporate Governance.

The following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company. The executive officers of the Company are elected annually by the Board of Directors. The executive officers serve terms of one year or until their resignation or removal by the Board of Directors. There are no family relationships among any of the directors and officers.

Name	Age	Position & Offices Held
Tony Liu	6364	Chairman of the Board and CEO
Chan Cheung	6061	CFO, Corporate Secretary
Jun Min	5758	Director
Cosimo J. Patti	6667	Independent Director

All of the above Directors and Officers were appointed to their positions on January 3, 2017.

Tony Liu, Chairman of the Board and CEO.

Mr. Tony Liu brings almost 50 years of management, extensive leadership, strategy, risk management and marketing experience to to UBI. Mr. Liu served as a representative to the National People’s Congress in China, with his practical work experience in ~~the~~ the Chinese community for many years. He has been Chairman of Hong Kong Silver Union Group Co., Ltd., since May, 2009. From 2001 - - 2014 he was Chairman and Chief Executive Officer of American Oriental Bioengineering, Inc., a pharmaceutical company that produced and marketed prescription pharmaceutical products, over-the-counter pharmaceutical products and nutraceutical products. He is also a limited partner of Shenzhen Zhu Mao Investment Enterprise since July, 2015. Mr. Liu graduated with a major in Communications & Commands from Wuhan Communication College in 1986 and studied Integrated Marketing and Media at the University of Hong Kong in 2004. Mr. Liu studied in the Program of Sustainable Growth of Large Corporations sponsored by the School of Engineering and the School of Business at Stanford University. Mr. Liu passed the dissertation for his Doctor of Business Administration degree in September 2010 at Tarlac State University through a program jointly run by Beijing Normal University and Tarlac State University. This program is accredited by The Philippines Department of Education and China Department of Education.

Chan Cheung, Chief Financial Officer and Corporate Secretary

Mr. Chan Cheung is Certified Public Accountant, joined the Company in September, 2016. He brings to the management team over 30 years of financial and accounting experience in banking, finance, and management, before joining the Company. From April 2009 to August 2016, he worked as the Chief Financial Officer, Chief Compliance Officer and Corporate Secretary at Neo-Neon Holdings Ltd, a Hong Kong Stock Exchange listed company with the ticker symbol of HK.1868., where he was responsible for financial reporting, mergers & acquisitions, and strategic planning. He obtained a BS degree from Chinese University of Hong Kong in 1983, he is member of the Hong Kong Institute of Certified Public Accountants and Association of Chartered Certified Accountants.

4128

Jun Min, Director

Jun Min brings to the Company over 30 years of business experience in operations management, along with a vast amount of leadership, consumer industry, marketing experience and knowledge of the consumer and pharmaceutical products industries in China. Mr. Min worked at the Price Checking Department Bureau of Heilongjiang Province from 1987 to 1992. Subsequently, he worked for Three- Happiness Bioengineering, Co. Ltd. from 1994. In November 2008, Mr. Min joined the board of directors of China Aoxing Pharmaceuticals Co., Inc. (OTCBB:CAXG), a specialty pharmaceutical company specializing in research, development, manufacturing and distribution of a variety of pain killers and pain-management products. Mr. Jun Min has worked in the position of manager of corporate communications at Sanleyuan Group, in Hong Kong from 1993 to Present. From 2002 to 2014, he was Director and Vice President of American Oriental Bioengineering, Inc., a pharmaceutical company that produced and marketed prescription pharmaceutical products. Mr. Min received a BA in Business Management from Zhongyang Broadcast TV University in 1986.

Cosimo J. Patti, Independent Director

Mr. Patti has over 50 years of business experience in managing corporate teams for both domestic and international operations, as well as compliance and sales organizations. Mr. Patti brings risk management, and financial experience in delivering products and services to consumers and businesses, he brings consumer and business insights, as well as a global perspective, to the Board. From 2004 to 2014, Mr. Patti was an independent director of American Oriental Bioengineering, Inc., a pharmaceutical company that produced and marketed prescription pharmaceutical products. Mr. Patti was the President and Chairman of Technology Integration Group, Inc. D/B/A FSI Advisors Group, a global Financial Services (Bulletin Board listed TING) consulting organization from 1999 to 2005. In May 2009, Mr. Patti was appointed to the Board of Directors of China XD Plastics Company Limited (NASDAQ:CXDC), a company engaged in the development, manufacturing, and distribution of modified plastics primarily for use in automotive applications. In June 2007, Mr. Patti joined the Board of Directors of Advanced Battery Technologies, Inc. (NASDAQ:ABAT). He was the Director of Strategic Cross-border Business with Cedel Bank from 1996 to 1999. Since 1986, Mr. Patti has served as an appointed arbitrator to the New York Stock Exchange and the National Association of Securities Dealers adjudicating cases involving client disputes and improprieties. Mr. Patti attended Brooklyn College from 1968 to 1970.

42Corporate Governance

Our board of directors has not established any committees, including an audit committee, a compensation committee or a nominating committee, or any committee performing a similar function. The functions of those committees are being undertaken by our board.

Code of Ethics

We do not currently have a written Code of Ethics applicable to our principal executive, financial and accounting officer.

Item 11. Executive Compensation

~~EXECUTIVE~~The ~~COMPENSATION~~following table sets forth certain compensation information for: (i) each person who served as the chief executive officer of our company at any time during the years ended August 31, 2018 and 2017, regardless of compensation level, and (ii) each of our other executive officers, other than the chief executive officer, serving as an executive officer at any time during 2018-2017. Compensation information is shown for fiscal years 2018 and 2017.

The following table sets forth certain compensation information for: (i) each person who served as the chief executive officer of our company at any time during the years ended August 31, 2017 and 2016, regardless of compensation level, and (ii) each of our other executive officers, other than the chief executive officer, serving as an executive officer at any time during 2017-2016. Compensation information is shown for fiscal years 2017 and 2016.

UBI Blockchain Internet, Ltd., Summary Compensation Table

			Year		~~Year~~																~~Compen-~~
	Principal		Ending		~~Ending~~		Salary		~~Salary~~		Bonus		~~Bonus~~		Awards		~~Awards~~		Compensation		~~sation~~		Total		~~Total~~
Name	Position		Aug 31,		~~Aug 31,~~		($)		~~($)~~		($)		~~($)~~		($)		~~($)~~		($)		~~($)~~		($)		~~($)~~
Tony Liu Appointed: January 3, 2017		CEODirector				2017				25,721				0				0				0				0
Tony Liu Appointed:				2018				150,952				0				0				0				150,952
Chan Cheung Appointed: January 3, 2017		CFO				2017				108,030				0				0				0				0
January 3, 2017	CEO, Director			2017				25,721				0				0				0				25,721
Barry Hall		CEO/CFO/Director				2016				0				0				0				0				0
Chan Cheung Appointed:				2018				70,151				0				0				0				70,151
Appointed: Aug 30, 2013 Resigned: Jan. 3, 2017						2015				0				0				0				0				0
January 3, 2017	CFO			2017				108,030				0				0				0				108,030
Frank Arnone		Secretary/Director				2016				0				0				0				0				0
Barry Hall	CEO/CFO/Director			2017				0				0				0				0				0
Appointed: Apr 10, 2014 Resigned: Jan. 3, 2017						2015				0				0				0				0				0
Appointed: Aug 30, 2013 Resigned: Jan. 3, 2017
Frank Arnone	Secretary/Director			2017				0				0				0				0				0
Appointed: Apr 10, 2014 Resigned: Jan. 3, 2017

Note: During 2016 Mr. Hall received $10,000 and Mr. Arnone received $5,000 as reimbursement for fees to cover past incidental expenses.

Board of Directors Compensation

Our board of directors consists of three members. There was no compensation paid to any of the Board members for the fiscal years ended August 31, ~~2017~~2018 and ~~2016~~2017.

Item 12. Security Ownership of Certain Beneficial Owners and Management and related stockholder matters

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information concerning the ownership of the Company’s Common Stock as of August 31, ~~2017~~2018, with respect to: (i) each person known to the Company to be the beneficial owner of more than five percent of the Company’s Common Stock; (ii) all directors; and (iii) directors and executive officers of the Company as a group. To the knowledge of the Company, each shareholder listed below possesses sole voting and investment power with respect to the shares indicated.

We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table. Under the rules of the U. S. Securities and Exchange Commission, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60-days, such as options or warrants to purchase our common stock.

Security Ownership Table

Name of Beneficial Owner	Class A Common		Percent			Class B Common		Percent			Class C Common		Percent			Percent of Total Voting Power (1)
Named Executive Officers and Directors:
Tony Liu, CEO & Chairman (2)		30,000,000		97.74	%		6,000,000		100	%		40,000,000		54.54	%		99.21	%
Chan Cheung, CFO & Secretary (3)												100,000		0.1	%
Jun Min, Director (4)
Cosimo J. Patti Director (5)												500,000		0.67	%
All executive officers and directors as a group (4 persons)		30,000,000		97.74	%		6,000,000		100	%		40,600,000		8355.82	%		99.21	%

(1) Percentage of total voting power represents voting power with respect to all shares of our Class A Common Stock (30,~~717~~799,046 ~~issued~~ issued and outstanding) and Class B Voting stock (6,000,000 shares issued and outstanding), as a single class. The holder of our Class B Voting Stock are entitled to ten votes per share, and holders of our Class A Common Stock are entitled to one vote per share. The 6,000,000 Class B shares have voting rights equal to 60,000,000 common shares. Percentage of Total Voting Power is calculated based on an aggregate of 90,~~717~~797,046 (30,~~717~~797,046 Class A Common + 60,000,000 Class B Voting Common) shares issued and outstanding. There are 73,~~400~~550,000 non-voting Class C shares issued and outstanding. Class C shares cannot be converted into Class A or Class B shares.

(2) Tony Liu, Smart-Space 3F, Level 9, Cyberport 3, 100 Cyberport Road, Hong Kong, People’s Republic of China. Tony Liu is the beneficial owner who exercises the sole voting and dispositive powers with respect to 30,000,000 Class A common shares, ~~6,000,000 Class B common shares,~~ and ~~40,000,000 Class C common shares owned and~~ has the ultimate voting control over the shares held in the name of UBI Blockchain Internet, LTD., a Hong Kong Company.

(3) Chan Cheung, Smart-Space 3F, Level 9, Cyberport 3, 100 Cyberport Road, Hong Kong, People’s Republic of China.

(4) Jun Min, Smart-Space 3F, Level 9, Cyberport 3, 100 Cyberport Road, Hong Kong, People’s Republic of China.

(5) Cosimo J. Patti, Smart-Space 3F, Level 9, Cyberport 3, 100 Cyberport Road, Hong Kong, People’s Republic of China.

4531

We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Our Chairman and CEO, Tony Liu is also our primary shareholder. He controls 30,000,000 shares of our Class A Common Stock, representing 9997.74% ownership of the Class; 6,000,000 shares of our Class B Common Stock, representing 100% ownership of the Class; and 40,000,000 shares of our Class C Common Stock, representing 8254.64% of the Class.

The Company has been using ~~this~~ Hong Kong office space provided by UBI Blockchain Internet, LTD. (a Hong Kong Company) at ~~no cost to~~ the Hong Kong Company’s cost. UBI Hong Kong is ~~benefically~~beneficially owned by Tony Liu, the Chairman and CEO of the Company.

In the year ended August 31, ~~2017~~2018, Tony Liu, chief executive officer of the Company, advanced or paid a total of $~~514~~1,~~081~~358,900 of expenditures on on behalf of the Company. As of August 31, 2018, the total amount due to Tony Liu was $1,831,903. The amount due to Tony Liu for these expenditures is interest bearing at a rate of 7% per annum. As of August 31, ~~2017~~2018, accrued interest amounted to $1091,~~350~~696. The advances and related accrued interest are due on demand.

Global Alliance Securities, LLC, 100 Wall Street, New York, NY 10005 has a long standing relationship with Mark DeStefano, the former debt holder of the Company. Mr. DeStefano asked Global Alliance Securities, LLC if they could help him find someone to pay off the debt the Company owed him in exchange for taking control of the Company. In September, 2016, Global Alliance Securities found a buyer in China. As a finder’s fee for finding a buyer, ~~Mr.~~the ~~DeStefano~~Company paid Global Alliance a fee of $20,000. The fee was paid based on a long standing relationship,; there was no written agreement between the parties. In August 2018, the Company issued 150,000 shares of its Class C Common Stock to Global Alliance for consulting services rendered.

46Director Independence

The Company’s Board of Directors consists of the following directors: Tony Liu, Jun Min and Cosimo J. Patti. The Board of Directors has determined that one of its directors, Cosimo J. Patti is independent as defined by the NASDAQ Stock Market’s Marketplace Rules.

Item 14. Principal Accounting Fees and Services

Michael T. Studer CPA P.C. served as our principal independent public accountant for the ~~year~~years ~~ending~~ended August 31, ~~2017~~2018 and August 31, ~~2016~~2017. The aggregate fees billed to us or incurred by us to Michael T. Studer CPA P.C. for the year ended August 31, ~~2017~~2018 and for the year ended August 31, ~~2016~~2017 are as follows:

	For Year Ended		For the Year Ended
	August 31, 2017		August 31, 2016
	August 31, 2018		August 31, 2017
(1) Audit Fees (1)	$	35,000	$	935,~~500~~000
(2) Audit-Related Fees		-7,000		-
(3) Tax Fees		-		-
(4) All Other Fees		-		-

Total fees paid or accrued to our principal auditor

(1) Audit Fees include fees billed and expected to be billed for services performed to comply with Generally Accepted Auditing Standards (GAAS), including the recurring audit of the Company’s financial statements for such period included in this Annual Report on Form 10-K and for the reviews of the quarterly financial statements included in the Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

4732

Audit Committee Policies and Procedures

We do not have an audit committee; therefore, our sole director pre-approves all services to be provided to us by our independent auditor. This process involves obtaining (i) a written description of the proposed services, (ii) the confirmation of our Principal Accounting Officer that the services are compatible with maintaining specific principles relating to independence, and (iii) confirmation from our securities counsel that the services are not among those that our independent auditors have been prohibited from performing under SEC rules. Our directors then make a determination to approve or disapprove the engagement our independent public accountant for the proposed services. In the fiscal years ending August 31, ~~2017~~2018 and ~~2016~~2017, all fees paid to our independent public accountants were unanimously pre-approved in accordance with this policy.

Less than 50 percent of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees

PART IV

Item 15. Exhibits, Financial Statement Schedules.

The following information required under this item is filed as part of this report:

(a) 1. Financial Statements

	Page
Management’s Report on Internal Control Over Financial Reporting	38
Report of Independent Registered Public Accounting Firm
Balance Sheets	F-1
Statements of Operations	F-2
Statements of Stockholders’ Equity	F-3
Statements of Cash Flows	F-4

The financial statements for the years ended August 31, 2018 and August 31, 2017 commence on page F-1 of this Annual Report on Form 10-K.

(b) Financial Statement Schedules

None.

Incorporated by reference

Exhibit

Exhibit Description

Filed herewith

Form

Period Ending

Exhibit

Filing Date

3.1

~~Articles~~Certificate of Incorporation~~, in effect~~

8-K

3.5

12/01/16

3.2

~~By-laws~~Amendment to Certificate of Incorporation

8-K

3.2

096/2002/1017

3.3

~~Articles~~Amended ofand ~~Designation~~Restated By-Laws

8-K

3.37

68/1024/~~2014~~2017

3.4

Certificate of Designation

8-K

3.4

10/04/2016

10.1

Indemnity Agreement

S-1/A

7/06/2017

3.5

Certificate of Incorporation

8-K

3.5

12/01/2016

10.2

Agreement among The Government of the Hong Kong Special Administration Region, UBI Blockchain Internet, a Hong Kong company and the Hong Kong Polytechnic University, dated November 14, 2017

P-AM

10.5

4/04/2017

3.6

Certificate of Amendment to Certificate of Incorporation, in effect.

8-K

3.6

6/02/2017

10.3

Assignment Agreement between UBI Blockchain Internet, a Hong Kong company and UBI Blockchain Internet Ltd., a Delaware corporation

P-AM

10.6

5/15/2018

3.7

By-laws, as currently in effect.

8-K

3.7

8/24/2017

10.4

Terms of Loan Agreement between Tony Lui and UBI Blockchain Ltd, a Hong Kong company, and UBI Blockchain Ltd, a Delaware corporation

31.1

Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act

32.1

Certification of Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act

31.2

Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act

32.2

Certification of Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act

101		* The following materials from this Annual Report on Form 10-K for the year ended August 31, 2017, formatted in XBRL (eXtensible Business Reporting Language).
		1) Balance Sheets at August 31, 2017 and August 31, 2016.
		2) Statements of Operations for the years ended August 31, 2017 and August 31, 2016.
		3) Statement of Stockholders’ Deficit for years ended August 31, 2017 and August 31, 2016
		4) Statements of Cash Flows for the years ended years ending August 31, 2017 and August 31, 2016.
		5) Notes to the financial statements.

10.5

Contract of Developing Application of Blockchain Technology to Upgrade Full Industry Chain of Brewery by and among UBI Hong Kong Blockchain Internet Ltd, TongFangZhuoXin Brewing Co., Ltd. and Global Blockchain Cooperation Alliance, dated August 26, 2018

10.6

Contract to Implement International Management System for Madieer Hotel Group with the Application of the Blockchain Technology by and between UBI Hong Kong Blockchain Internet Ltd. and Harbin Madieer Hotel Group Co., Ltd., dated August 26, 2018

21.1

List of Subsidiaries

P-AM

12/21/2017

31.1

Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act

32.1

Certification of Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act

31.2

Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act

32.2

Certification of Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act

101		* The following materials from this Annual Report on Form 10-K for the year ended August 31, 2018, formatted in XBRL (eXtensible Business Reporting Language).

		1) Balance Sheets at August 31, 2018 and August 31, 2017.

		2) Statements of Operations for the years ended August 31, 2018 and August 31, 2017.

		3) Statement of Stockholders’ Deficit for years ended August 31, 2018 and August 31, 2017

		4) Statements of Cash Flows for the years ended years ending August 31, 2018 and August 31, 2017.

		5) Notes to the financial statements.

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

50 Item 16 Form 10-K Summary

None

INDEX TO FINANCIAL STATEMENTS

	Page

Financial Statements of UBI Blockchain Internet, Ltd.

Report of Independent Registered Public Accounting Firm	F-1

Balance Sheets as of August 31, 2018 and August 31, 2017	F-2

Statements of Operations for the years ended August 31, 2018 and August 31, 2017	F-3

Statements of Stockholders’ Deficit for the years ended August 31, 2018 and August 31, 2017	F-4

Statements of Cash Flows the years ended August 31, 2018, August 31, 2017	F-5

Notes to the Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of UBI Blockchain Internet, Ltd.

Opinion on the Financial Statements

I have audited the accompanying consolidated balance sheets of UBI Blockchain Internet, Ltd. (the “Company”) as of August 31, 2018 and 2017 and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In my opinion, the consolidated financial statements present fairly, in all material respects, the financial position of UBI Blockchain Internet, Ltd. as of August 31, 2018 and 2017 and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Explanatory Paragraph – Going Concern

Basis for Opinion

These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on the Company’s financial statements based on my audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

I conducted my audit in accordance with the standards of the PCAOB. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. As part of my audit I am required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, I express no such opinion.

My audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. My audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion.

	/s/ Michael T. Studer CPA P.C.
	Michael T. Studer CPA P.C.

Freeport, New York

December 5, 2018

I have served as the Company’s auditor since 2016.

F-1

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Balance Sheets

	August 31, 2018			August 31, 2017

Assets

Current Assets
Cash	$	23,434		$	15,406
Inventory		23,448			-
Current portion of prepaid stock-based salaries and consulting fees		493,333			1,300,000
Deposit and prepaid expenses		18,093			-
Total Current Assets		558,308			1,315,406

Office equipment, net of accumulated depreciation		9,359			17,950

Other Assets
Non-current portion of prepaid stock-based salaries and consulting fees		-			493,333
Intangible assets, net of accumulated amortization		127,037			92,035

Total Other Assets		127,037			585,368

Total Assets	$	694,704		$	1,918,724

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

Accounts payable and accrued liabilities	$	151,405		$	71,425
Due to related party		1,923,599			514,081
Total current liabilities		2,075,004			585,506
Total liabilities		2,075,004			585,506

Stockholders’ Equity (Deficit):
Preferred Stock: $0.001 par value, 5,000,000 shares authorized, 0 and 0 shares issued and outstanding as of August 31, 2018 and 2017, respectively		-			-
Class A common stock, $0.001 par value, 1,000,000,000 shares authorized, 30,799,046 and 30,717,046 shares issued and outstanding as of August 31, 2018 and 2017, respectively		30,799			30,717
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 August 31, 2018 and 2017, respectively		6,000			6,000
Class C common stock, $0.001 par value, 500,000,000 shares authorized, 73,550,000 and 73,400,000 shares issued and outstanding as of August 31, 2018 and 2017, respectively		73,550			73,400
Additional paid in capital		7,841,571			7,475,931
Stock subscription payable		90,521			90,521
Accumulated other comprehensive income		25,051			75
Accumulated deficit		(9,447,792	)		(6,343,426	)
Total stockholders’ equity (deficit)		(1,380,300	)		1,333,218

Total liabilities and Stockholders’ Equity (Deficit)	$	694,704		$	1,918,724

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

F-2

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Operations

For the Years Ended

	August 31, 2018			August 31, 2017

Revenue	$	-		$	-

Operating Expenses:
Employee compensation (including stock-based compensation of $96,668 and $120,833, respectively)		834,430			463,782
Consulting fees (including stock-based compensation of $1,233,333 and $1,173,334, respectively		1,238,383			1,198,334
Professional fees (including stock-based compensation of $335,872 and $0, respectively)		467,575			98,677
Research and development		153,870			-
Occupancy		86,604			13,953
Depreciation and amortization		22,022			1,610
Other		218,589			50,723
Total Operating Expenses		3,021,473			1,827,079

Loss from Operations		(3,021,473	)		(1,827,079	)

Other Income (Expenses)
Interest expense - related party		(82,672	)		(9,663	)
Loss on foreign currency exchange		(221	)		-
Gain on settlement of accounts payable and accrued liabilities		-			47,003
Gain on settlement of bank overdraft		-			572
Total Other Income (Expenses) - net		(82,893	)		37,912

Net Loss		(3,104,366	)		(1,789,167	)

Other comprehensive income (loss):
Foreign exchange translation adjustment		24,976			75
Comprehensive Loss	$	(3,079,390	)	$	(1,789,092	)

Net Loss per share of Class A, Class B, and Class C Common Stock
Basic and Diluted	$	(0.03	)	$	(0.02	)

Weighted Average Number of Class A, Class B, and Class C Common Shares
Basic and Diluted		110,192,717			76,849,922

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

F-3

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Stockholders’ Equity (Deficit)

For the Years Ended August 31, 2018 and 2017

	Preferred Stock						Class A Common Stock				Class B Common Stock				Class C Common Stock				Additional Paid			Stock Subscription		Accumulated			Accumulated Other Comprehensive		Total Stockholders’
	Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		in Capital			Payable		Deficit			Income		Equity
Balance - August 31, 2016		100,000		$	1,000			217,046	$	217		-	$	-		-	$	-	$	4,315,919		$	90,521	$	(4,554,259	)	$	-	$	(146,602	)
Class A, Class B, and Class C common stock agreed to be issued on September 15, 2016 for $200,000 cash (collected September 14, 2016 and October 11, 2016)		-			-			30,000,000		30,000		6,000,000		6,000		40,000,000		40,000		124,000			-		-			-		200,000
Finder’s fee paid regarding September 15, 2016 change in control agreement		-			-			-		-		-		-		-		-		(20,000	)		-		-			-		(20,000	)
Contributed capital collected October 11, 2016		-			-			-		-		-		-		-		-		17,500			-		-			-		17,500
Retirement of preferred stock - November 30, 2016		(100,000	)		(1,000	)		-		-		-		-		-		-		(32,735	)		-		-			-		(33,735	)
Class C common stock issued for stock based compensation - April 3, 2017		-			-			-		-		-		-		8,400,000		8,400		1,671,600			-		-			-		1,680,000
Class A common stock issued to a consultant - May 1, 2017		-			-			500,000		500		-		-		-		-		1,479,500			-		-			-		1,480,000
Class C common stock issued to stockholders of UBI Shenzhen - August 29, 2017		-			-			-		-		-		-		25,000,000		25,000		(79,853	)		-		-			-		(54,853	)
Foreign currency translation adjustment		-			-			-		-		-		-		-		-		-			-		-			75		75
Net loss for the year ended August 31, 2017		-			-			-		-		-		-		-		-		-					(1,789,167	)		-		(1,789,167	)
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	)

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

F-4

UBI Blockchain Internet, Ltd.

(Formerly JA Energy)

Consolidated Statements of Cash Flows

For the Years Ended

	August 31, 2018			August 31, 2017

Cash Flows from Operating Activities
Net Loss	$	(3,104,366	)	$	(1,789,167	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization expense		22,022			1,610
Stock-based compensation - employees		96,668			193,333
Stock-based compensation - consulting fees		1,233,333			1,173,334
Stock-based compensation professional fees		335,872			-
Gain on settlement of accounts payable and accrued liabilities		-			(47,003	)
Gain on settlement of bank overdraft		-			(572	)
Increase in inventory		(24,589	)		-
Increase in deposit and prepaid expense		(18,973	)		-
Increase in accounts payable and accrued liabilities		80,802			25,358
Increase in interest payable to related party		82,683			-
Increase (decrease) in bank overdraft		-			(630	)
Net cash used by operating activities		(1,296,548	)		(443,737	)

Cash Flows from investing activities
Website and software development costs		(53,526	)		-
Purchase of office equipment		(325	)		(5,932	)
Net cash used by investing activities		(53,851	)		(5,932	)

Cash Flows from financing activities
Advance from related party		1,358,900			378,216
Repayments to former related party		-			(26,981	)
Repayment of note payable to former related party		-			(50,000	)
Buyback of preferred stock		-			(33,735	)
Proceeds from sale of common stock - net		-			180,000
Contributed capital		-			17,500
Net cash provided by financing activities		1,358,900			465,000

Effect of exchange rate on cash		(473	)		75
Net Increase (Decrease) in Cash		8,028			15,406
Cash and cash equivalents at beginning of period		15,406			-
Cash and cash equivalents at end of period	$	23,434		$	15,406

Supplemental Cash Flow Information:
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-

Non-cash Investing and Financing Activities:

Issuance of 8,400,000 shares of Class C common stock to 7 employees and 38 consultants on April 3, 2017 charged to prepaid stock-based salaries and consulting fees	$	-		$	1,680,000
Issuance of 500,000 shares of Class A common stock to consultant on May 1, 2017 charged to prepaid stock-based salaries and consulting fees	$	-		$	1,480,000
Issuance of 25,000,000 shares of Class C common stock to stockholders of UBI Shenzhen on August 29, 2017 reflected at carrying values of UBI Shenzhen’s assets and liabilities	$	-		$	(54,853	)
Issuance of 82,000 shares of Class A common stock to four individuals associated with the Company’s law firm - October 2, 2017	$	335,872		$	-

Issuance of 150,000 shares of Class C common stock issued for consulting services - August 30, 2018	$	30,000		$	-

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

F-5

UBI BLOCKCHAIN INTERNET LTD.

(FORMERLY JA ENERGY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2018 AND 2017

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 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.

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).

F-6

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 August 31, 2018. 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 12). Through August 31, 2018, UBI Delaware, UBI Hong Kong, and UBI Shenzhen did not receive or earn any revenues in its blockchain technology business.

NOTE 2 - GOING CONCERN

The accompanying 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 August 31, 2018, the Company had cash of $23,434 and current liabilities of $2,075,004. For the year ended August 31, 2018, the Company incurred a net loss of $3,104,366. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

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. As described above, there was a change in control of the Company in October 2016.

The accompanying 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

Basis of Accounting

The accompanying 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 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.

F-7

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 $23,434 cash at August 31, 2018, $23,270 was held in foreign bank accounts not insured by FDIC.

Use of 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

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 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.

F-8

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 = 6.8375 RMB at August 31, 2018 and $1.00 = 6.5876 RMB at August 31, 2017). UBI Shenzhen revenues and expenses are translated into United States dollars at weighted average exchange rates ($1.00 = 6.5202 RMB for the year ended August 31, 2018 and $1.00 = 6.5920 RMB for the year ended August 31, 2017). 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 (principally the Hong Kong Dollar) are translated at the exchange rates prevailing at the dates of the transactions. Exchange gains and losses, which were not significant for the years ended August 31, 2018 and 2017 were reflected in income.

Income Taxes

Revenue recognition

Stock-Based Compensation

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.

F-9

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes and replaces nearly all existing GAAP revenue recognition guidance, including industry-specific guidance. The authoritative guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The five steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as each performance obligation is satisfied. The authoritative guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The authoritative guidance requires significantly expanded disclosures about revenue recognition and was initially effective for fiscal years and the interim periods within these fiscal years beginning on or after December 15, 2016. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” This standard defers for one year the effective date of ASU 2014-09. The deferral will result in this standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period. We are presently studying the impact of ASU 2014-09 on our future financial statements.

Certain other 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 SHENZHEN 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 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 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

The following proforma information (unaudited) summarizes the results of operations for the year ended August 31, 2017 as if UBI Shenzhen was acquired on May 26, 2016 (UBI Shenzhen’s date of inception). The pro forma information is not necessarily indicative of the results that would have been reported had the transaction actually occurred on May 26, 2016, not is it intended to project results of operations for any future period.

F-10

	Year Ended August 31, 2017
	(Unaudited)

Revenue	$	-

Operating expenses:
Employee compensation (including stock - based compensation of $120,833)		563,725
Consulting fees (including stock - based compensation of $1,173,334)		1,198,334
Professional fees		98,667
Occupancy		85,188
Other		254,255
Total operating expenses		2,200,169
Loss from Operations		(2,200,169	)
Other Income (expenses):
Gain on settlement of accounts payable and accrued liabilities		47,575
Interest expense - related party		(10,409	)
Net Loss	$	(2,163,003	)
Net Loss per share of Class A, Class B, and Class C common stock - basic and diluted	$	(0.02	)
Weighted average number of Class A, Class B, and Class C Common Shares outstanding - basic and diluted		101,712,936

F-11

NOTE 5 – PREPAID STOCK BASED SALARIES AND CONSULTING FEES

Prepaid stock-based salaries and consulting fees at August 31, 2018 and 2017 consist of:

	Fair value of stock issuance (Note 6)		Prepaid balance at August 31, 2018			Prepaid balance at August 31, 2017
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	$	-		$	96,667
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		-			463,333
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			1,233,333
Total	$	3,160,000		493,333			1,793,333
Current portion				(493,333	)		(1,300,000	)
Non-current portion			$	-		$	493,333

At August 31, 2018, there was $493,333 of unrecognized compensation costs related to shares of Class A common stock issued to a consultant pursuant to a Consulting Agreement dated April 28, 2017 with a service term of two years expiring April 30, 2019. These costs are expected to be recognized as expense in the year ended August 31, 2019.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets at August 31, 2018 and 2017 consist of:

	August 31, 2018			August 31, 2017
Website development costs	$	93,952		$	92,035
Accumulated amortization		(11,278	)		-
Website development costs, net		82,674			92,035

Software acquired to be marketed		37,294			-
Accumulated amortization		-			-
Software acquired to be marketed, net		37,294			-

Office software		8,483			-
Accumulated amortization		(1,414	)		-
Office software, net		7,069			-

Total intangible assets - net	$	127,037		$	92,035

F-12

At August 31, 2018, the expected future amortization expense of the intangible assets was:

	Amount
Year ending August 31, 2019	$	27,946
Year ending August 31, 2020		27,946
Year ending August 31, 2021		27,946
Year ending August 31, 2022		27,946
Year ending August 31, 2023		15,253
Total	$	127,037

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.

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

NOTE 7 - STOCKHOLDERS’ EQUITY

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.

F-13

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 year ended August 31, 2018, we recognized stock-based employee compensation of $96,668 and recognized stock-based consulting fees expense of $463,333 from these agreements. For the year ended August 31, 2017, we recognized stock-based employee compensation of $193,333 and recognized stock-based consulting fees expense of $926,667 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 is being 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 year ended August 31, 2017, we recognized stock-based consulting fees expense of $246,667 from this agreement.

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.

NOTE 8 - RELATED PARTY TRANSACTIONS

As described in Note 10, the Company was obligated to Mr. Mark DeStefano (“DeStefano”) for a $50,000 note payable and $26,981 for payments made on behalf of the Company. Subsequently, Mr. DeStefano advanced $1,285 to the Company. During the three months ended November 30, 2016 the Company satisfied these obligations. DeStefano had voting control of the Company from June 2014 (see Note 10) to October 24, 2016 (when the Company purchased from DeStefano the 1,000,000 shares of Preferred Stock for $33,735) through his ownership of the 1,000,000 shares of Voting Preferred Stock issued and outstanding (equivalent to 50,000,000 votes).

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 $2,816 at the August 31, 2018 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.

F-14

During the year ended August 31, 2018, Tony Liu, chief executive officer of the Company, advanced or paid a total of $1,358,900 of expenditures on behalf of the Company. As of August 31, 2018, the total amount due to Tony Liu was $1,831,903. The amount due to Tony Liu for these expenditures is interest bearing at a rate of 7% per annum. $82,672 and $9,663 interest expense was accrued for the years ended August 31, 2018 and 2017, respectively. As of August 31, 2018, accrued interest amounted to $91,696. The advances and related accrued interest are due on demand.

Included in accounts payable and accrued liabilities at August 31, 2018 is accrued salary due Tony Liu, chief executive officer of the Company, of $62,744.

NOTE 9 - PROVISION FOR INCOME TAXES

As of August 31, 2018, and 2017, the Company had net operating loss carry forwards of approximately $2,883,000 and $1,444,000, respectively, as follows:

Tax Jurisdiction	August 31, 2018		August 31, 2017
United States	$	1,296,000	$	1,126,000
Hong Kong		855,000		2,000
China (UBI Shenzhen)		732,000		316,000
Total	$	2,883,000	$	1,444,000

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, due to the change in control, there are annual limitations on future United States net operating loss carry forward deductions.

At August 31, 2018 and 2017, deferred tax assets consisted of:

	August 31, 2018			August 31, 2017
Net operating loss carry forwards	$	587,617		$	473,511
Valuation allowance		(587,617	)		(473,511	)
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.

F-15

NOTE 10 - NOTES PAYABLE – Former Related Party

On April 4, 2014, the Company issued a One-year Promissory Note (“the Note”) in the amount of $50,000 to Mark DeStefano (“DeStefano) (see Note 8). The Note bore interest at 12% percent per annum with interest due each month. In the event that interest was not paid within three days from the time it was due the Note was to be considered in default and was to be fully due and payable. Additional consideration for the Note included the Chief Executive Officer of the Company giving the note holder his voting proxy for all of the shares he held with the exception of voting on a tender offer or a sale of the Company’s assets. As of May 8, 2014, the Note was in default.

In October 2016, the $50,000 note payable was satisfied.

NOTE 11 – OTHER INCOME AND EXPENSE

NOTE 12 – 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 $385,000) 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 $385,000) 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., (UBI 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 $71,000) to HKPU. On February 1, 2018, HKSAR paid its first installment of HK $561,198 (approximately $71,000) 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). UBI Hong Kong has not yet paid the HK 687,934 (approximately $88,000) installment due October 1, 2018. 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.

F-16

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.

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 5). The test identified some technical issues that need to be addressed; the team is currently preparing for a second test, the second test, originally scheduled for June 2018, will not be scheduled until the team believes the test will be successful. 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.

F-17

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

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 $1,807 per month, and expires September 2020. The second lease provides for monthly rent of RMB 8,964, or approximately $1,311 per month, and expires September 2019.

As of August 31, 2018, the future minimum lease payments under non-cancelable operating leases were:

Year ending August 31, 2019	$	37,416
Year ending August 31, 2020		22,995
Year ending August 31, 2021		1,807
Total	$	62,218

For the years ended August 31, 2018 and 2017, total rent expense was $86,604 and $13,953, 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.

F-18

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.

NOTE 13 – DEVELOPMENT AGREEMENTS

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 $1,023,766), 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 (approximately $58,501) on September 30, 2018. The balance is payable in a series of 8 payments ranging from RMB 300,000 (approximately $43,876) to RMB 1,500,000 (approximately $219,378) 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.

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 $146,252) which is payable over the term of the Hotel Group Agreement in a series of milestone payments. The initial payment of RMB 400,000 (approximately $58,501) was due on or before September 2, 2018. The balance is payable in a series of 3 payments ranging from RMB 300,000 (approximately $43,876) to RMB 400,000 (approximately $58,501) 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. To date, the Company has not received the initial payment of RMB 400,000 (approximately $58,501) due the Company by September 2, 2018 under the Hotel Group Agreement.

F-19

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.
Date: December 7, 2017	By:	/s/ Tony Liu
Date: December 6, 2018	By:	/s/ Tony Liu
		Tony Liu Chairman and Chief Executive Officer
		Tony Liu
		Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Annual Report has been signed by the following persons in the capacities and on the dates indicated.

Name	Position	Date
/s/ Tony Liu	Chairman and Chief Executive Officer	December 76, ~~2017~~2018
Tony Liu	(Principal Executive Officer)
/s/ Chan Cheung	Chief Financial Officer and Corporate Secretary	December 76, ~~2017~~2018
Chan Cheung	(Principal Financial and Accounting Officer)
/s/ Jun Min	Director	December 76, ~~2017~~2018
Jun Min
/s/ Cosimo J. Patti	Director	December 76, ~~2017~~2018
Cosimo J. Patti

5136

Filing Compare · UBI Blockchain Internet LTD-DE