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What changed in Agape ATP Corp's 10-K2022 vs 2023

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Paragraph-level year-over-year comparison of Agape ATP Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+163 added178 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in Agape ATP Corp's 2023 10-K

163 paragraphs added · 178 removed · 115 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

38 edited+3 added40 removed60 unchanged
Biggest changeThe new formula is comprised of 11 food groups, including potent mangosteen skin extract. Backed by advanced scientific research and tested on 88 nutrigenomic profiles, the new formulation revealed enhanced antioxidant properties. 96.34% DPPH Radical Scavenging activity, an approximate 22% increase compared to Mitogize. 12 Benefits: Cellular health Effective antioxidants to protect from cellular oxidative damages.
Biggest changeBacked by advanced scientific research and tested on 88 nutrigenomic profiles, the new formulation revealed enhanced antioxidant properties. 96.34% DPPH Radical Scavenging activity, an approximate 22% increase compared to Mitogize. 11 ÉNERGÉTIQUE The following is a list of our ÉNERGÉTIQUE products: ÉNERGÉTIQUE Hyaluronic Acid (HA) Serum Formulated with four functional hyaluronic acid and a unique peptide, this scientifically advanced and intensive quintuple action serum proven to deliver 5Rs dermal benefits.
Other than SOCSO, effective January 1, 2018, employees and employers in the private sector are mandated to contribute to an employment insurance system, (“EIS”) under the Employment Insurance System Act, 2017. Both the employee and employer shall contribute at an equal rate at 0.2% of the employee’s wages under the scheme, subject to a maximum monthly wage rate of RM4,000.
Other than SOCSO, effective January 1, 2018, employees and employers in the private sector are mandated to contribute to an employment insurance system, (“EIS”) under the Employment Insurance System Act, 2017. Both the employee and employer shall contribute at an equal rate at 0.2% of the employee’s wages under the scheme, subject to a maximum monthly wage rate of RM5,000.
We also intend to approach online social influencers as part of our marketing strategy to promote our products and our e-commerce platform. 23 Intellectual Property We consider trademarks, patents and copyrights to protect our intellectual property rights critical to our success. We are the registered owner of five registered trademarks and with 1 trademark pending registration in Malaysia.
We also intend to approach online social influencers as part of our marketing strategy to promote our products and our e-commerce platform. 17 Intellectual Property We consider trademarks, patents and copyrights to protect our intellectual property rights critical to our success. We are the registered owner of five registered trademarks and with 1 trademark pending registration in Malaysia.
Whenever products are purchased for inventory replenishment, samples are randomly selected from every batch for testing at laboratories registered with the Ministry of Health Malaysia. 19 Our Customers General We provide health and wellness products and advisory services to health-conscious customers in the Malaysian market.
Whenever products are purchased for inventory replenishment, samples are randomly selected from every batch for testing at laboratories registered with the Ministry of Health Malaysia. 15 Our Customers General We provide health and wellness products and advisory services to health-conscious customers in the Malaysian market.
As the contents and combination of the main ingredients in our ATP Zeta Health Program and BEAUNIQUE series are categorized as health food rather than medicines or drugs, all of our products require authorization from the Food Safety and Quality Division of the Ministry of Health, Malaysia according to the Food Act 1983 (ACT 281) & Regulations in order to be sold in the country.
As the contents and combination of the main ingredients in our ATP Zeta Health Program, BEAUNIQUE and E.A.T.S series are categorized as health food rather than medicines or drugs, all of our products require authorization from the Food Safety and Quality Division of the Ministry of Health, Malaysia according to the Food Act 1983 (ACT 281) & Regulations in order to be sold in the country.
Accordingly, we have obtained the appropriate authorizations from the Food Safety and Quality Division of the Ministry of Health, Malaysia for all products in our ATP Zeta Health Program and BEAUNIQUE series. Our ÉNERGÉTIQUE series is regulated under the Control of Drugs and Cosmetics Regulations 1984, the Ministry of Health, Malaysia.
Accordingly, we have obtained the appropriate authorizations from the Food Safety and Quality Division of the Ministry of Health, Malaysia for all products in our ATP Zeta Health Program, BEAUNIQUE, E.A.T.S series. Our ÉNERGÉTIQUE series is regulated under the Control of Drugs and Cosmetics Regulations 1984, the Ministry of Health, Malaysia.
The following table sets forth the number of employees by function: Function Number of employees Senior Management 1 Business Development Department 2 Corporate Affairs Department 3 Finance Department 5 Human Resources Department 5 Operations Department 8 Product Development Department 3 Sales & Marketing Department 3 Total 30 Insurance The Employees’ Social Security Act, 1969, Malaysia mandates employers and employees to make a monthly contribution to the Social Security Organisation, Malaysia, (“SOCSO”) for any employee who is employed for wages paid under a contract of service or apprenticeship with an employer for the purpose of providing social security protection to employees and their dependents against occupational injuries, including industrial accident, accident during emergency at the employers’ premises, occupational diseases and commuting accidents.
The following table sets forth the number of employees by function: Function Number of employees Senior Management 2 Business Development Department 2 Corporate Affairs Department 3 Finance Department 5 Human Resources Department 2 Operations Department 6 Technology Infrastructure Department 1 Total 21 Insurance The Employees’ Social Security Act, 1969, Malaysia mandates employers and employees to make a monthly contribution to the Social Security Organisation, Malaysia, (“SOCSO”) for any employee who is employed for wages paid under a contract of service or apprenticeship with an employer for the purpose of providing social security protection to employees and their dependents against occupational injuries, including industrial accident, accident during emergency at the employers’ premises, occupational diseases and commuting accidents.
Trim+ Trim+ is the first product launched under this series, which utilizes advanced technology to extract patented active ingredients in foods. Trim+ has been scientifically proven to be effective in inhibiting the activities of carbohydrates digestive enzymes, which results in a reduction of the breakdown and absorption of sugars.
Trim+ Trim+ is the first product launched under this series, which utilizes advanced technology to extract patented active ingredients in foods. Trim+ has been scientifically proven to be effective in inhibiting the activities of carbohydrates digestive enzymes, which results in a reduction of the breakdown and absorption of sugars. E.A.T.S The following is a list E.A.T.S product series.
We have also obtained the appropriate authorizations for distribution and sale of the products. 26
We have also obtained the appropriate authorizations for distribution and sale of the products. 18
Rates applicable to both the employee and employer are fixed at the maximum rate of RM19.75 and RM69.05 respectively. Employees who have attained 60 years of age are not required to contribute to the scheme. The employer’s responsibility towards this group shall be at a reduced rate which ranges between MYR0.30 to RM49.40 for the said wage band.
Rates applicable to both the employee and employer are fixed at the maximum rate of RM24.75 and RM86.65 respectively. Employees who have attained 60 years of age are not required to contribute to the scheme. The employer’s responsibility towards this group shall be at a reduced rate which ranges between MYR0.30 to RM61.90 for the said wage band.
Depending on the monthly wages earned by the employee, employers shall cause to be deducted from the respective employee’s wages, amounts that ranges between RM0.10 to RM19.75 for monthly wages between RM30 to RM4,000. The employers’ contribution corresponds to the said rates are between RM0.4 to RM69.05.
Depending on the monthly wages earned by the employee, employers shall cause to be deducted from the respective employee’s wages, amounts that ranges between RM0.10 to RM24.75 for monthly wages between RM30 to RM5,000. The employers’ contribution corresponds to the said rates are between RM0.4 to RM86.65.
The following table sets forth the number of members and distributors at the date indicated: Number of Distributors Number of Members Total Number of Distributors and Members As at December 31, 2022 56,459 72,160 128,619 Distributors’ and members’ earnings Distributors and members earn profits from the sales of our products to customers.
The following table sets forth the number of members and distributors at the date indicated: Number of Distributors Number of Members Total Number of Distributors and Members As at December 31, 2023 56,462 72,191 128,653 Distributors’ and members’ earnings Distributors and members earn profits from the sales of our products to customers.
There are several levels of distributors depending on the size and the collective sales performance of their respective network group. Each level affords bonus benefits in a different form in ascending order.
There are several levels of distributors depending on the size and the collective sales performance of their respective network group. Each level affords bonus benefits in a different form in ascending order. A higher-level distributor will be compensated with higher returns in the form of bonus entitlements.
We have no expenditures or expenses relating to research and development of our product. We leverage our team of in-house nutritional consultants with rich experience gained in the area of nutritionist work, in collaborating with our customers and clients to understand the health and wellness market via a process of consultative review.
We leverage our team of in-house nutritional consultants with rich experience gained in the area of nutritionist work, in collaborating with our customers and clients to understand the health and wellness market via a process of consultative review.
It stimulates the pituitary gland to release endocrine hormones such as human growth hormone (HGH) to stimulate synergies thus achieving the efficacy of anti-ageing through the promotion of cells vitality and strengthening of organ function.
It stimulates the pituitary gland to release endocrine hormones such as human growth hormone (HGH) to stimulate synergies thus achieving the efficacy of anti-ageing through the promotion of cells vitality and strengthening of organ function. BEAUNIQUE Mito+ and Mitogize We discontinued ATP Regal Mitogize on October 1, 2019.
DSY Wellness On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness with Mr. Steve Yap following which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The establishment of DSY Wellness is a further expansion of our business into the health and wellness industry.
On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with Mr. Steve Yap, following which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies.
ATP Zeta Health Program The following is a list of our ATP Zeta Health Program products: ATP1s Survivor Select ATP1s Survivor Select contains various essential nutrients required by the human body to maintain the normal metabolism, which includes productions of biological energy (ATP).
The E.A.T.S is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. 7 ATP Zeta Health Program The following is a list of our ATP Zeta Health Program products: ATP1s Survivor Select ATP1s Survivor Select contains various essential nutrients required by the human body to maintain the normal metabolism, which includes productions of biological energy (ATP).
The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians. Our ÉNERGÉTIQUE series aims to provide a total dermal solution for healthy skin beginning from the cellular level. The series is comprised of the Energy Mask series, Hyaluronic Acid and Mousse Facial Cleanser.
Our ÉNERGÉTIQUE series aims to provide a total dermal solution for healthy skin beginning from the cellular level. The series is comprised of the Energy Mask series, Hyaluronic Acid and Mousse Facial Cleanser.
A higher-level distributor will be compensated with higher returns in the form of bonus entitlements. 20 Distributors and members motivation and training We believe that motivation, inspiration and training are key elements in the success of sales via network group marketing. Together with our distributors and members, we have established a consistent schedule of gatherings to support those needs.
Distributors and members motivation and training We believe that motivation, inspiration and training are key elements in the success of sales via network group marketing. Together with our distributors and members, we have established a consistent schedule of gatherings to support those needs. We conduct several training sessions per year to educate and motivate our distributors and members.
AGP1-Iron AGP1-Iron is the purest and most advanced Colloidal Iron that is sourced from the remains of an ancient rainforest which contains the most active plant-based element from nature. The colloidal nanosized iron provides high zeta potential promotes better absorptivity and cellular iron uptake through the ion channel.
AGP1-Iron AGP1-Iron is the purest and most advanced Colloidal Iron that is sourced from the remains of an ancient rainforest which contains the most active plant-based element from nature.
Bhd., a wholly owned subsidiary in Malaysia, with the aim to pursue the business of promoting wellness and wellbeing lifestyle of the community through the provision of services including online editorials, programs, events and campaigns on how to achieve positive wellness and lifestyle. On September 15, 2020, Wellness ATP International Holdings Sdn.
Bhd., a wholly owned subsidiary in Malaysia, with the aim to pursue the business of promoting wellness and wellbeing lifestyle of the community through the provision of services including online editorials, programs, events and campaigns on how to achieve positive wellness and lifestyle. We currently offer four series of products: ATP Zeta Health Program, ÉNERGÉTIQUE, BEAUNIQUE and E.A.T.S.
BEAUNIQUE Mito+ and Mitogize We discontinued ATP Regal Mitogize on October 1, 2019. In its stead, an enhanced formula, the BEAUNIQUE Mito+ was introduced in November 2019.
In its stead, an enhanced formula, the BEAUNIQUE Mito+ was introduced in November 2019.
AGN-Vege Fruit Fiber AGN-Vege Fruit Fiber is the special nutrition-based formula for intestines and stomach. It consists of four most essential components for gastrointestinal health effects such as fiber, probiotic the “friendly bacteria”, prebiotic fructooligosaccharides (FOS) as well as digestive enzymes. 10 Benefits: Promotes better bowel movement and prevent low-fiber diet-induced constipation. Maintains bowel health.
It is a 100% natural immune enhancer, safe and does not cause any allergic reactions. 9 AGN-Vege Fruit Fiber AGN-Vege Fruit Fiber is the special nutrition-based formula for intestines and stomach. It consists of four most essential components for gastrointestinal health effects such as fiber, probiotic the “friendly bacteria”, prebiotic fructooligosaccharides (FOS) as well as digestive enzymes.
We conduct several training sessions per year to educate and motivate our distributors and members. The training sessions are typically presented by in-house staff with suitable background in nutrition, in order to provide key nutrition information about our products, as well as providing workshops to promote presentation skills to attending participants.
The training sessions are typically presented by in-house staff with suitable background in nutrition, in order to provide key nutrition information about our products, as well as providing workshops to promote presentation skills to attending participants. 16 Our Suppliers All of our products are acquired from related parties and unrelated third parties located in Malaysia, and rebranded by us.
This product was tested for its nanoparticle by the National Measurement Institute of Australian Government, with proven content of nanosized calcium and magnesium that has better absorption and bio-availability.
This product was tested for its nanoparticle by the National Measurement Institute of Australian Government, with proven content of nanosized calcium and magnesium that has better absorption and bio-availability. 8 ATP4 Omega Blend ATP4 Omega Blend is a proprietary oil blend that is rich in undamaged polyunsaturated essential fatty acid, which is fully extracted from plant-based ingredients.
Steve Yap readily owns 33 proprietary formulas for treating non-communicable disease which he has agreed to bring into the company for joint commercialization. Mr. Steve Yap also has existing clients receiving traditional complimentary medicine or “TCM” in Indonesia and China. 6 Our Products We offer three series of products: (i) ATP Zeta Health Program, (ii) ÉNERGÉTIQUE and (iii) BEAUNIQUE.
Steve Yap also has existing clients receiving traditional complimentary medicine or “TCM” in Indonesia and China. 6 Our Products We offer four series of products: (i) ATP Zeta Health Program, (ii) ÉNERGÉTIQUE, (iii) BEAUNIQUE and (iv) E.A.T.S.
ATP3 Ionized Cal-Mag ATP3 Ionized Cal-Mag is a specialized calcium and magnesium minerals supplement that is designed to transform into ionic form completely before entering the body. This is compatible to the cellular ion channel theory, that all cellular metabolisms are dependent on ionic transmission to achieve the highest absorption rate.
This is compatible to the cellular ion channel theory, that all cellular metabolisms are dependent on ionic transmission to achieve the highest absorption rate.
We have one applied to register an additional one trademarks in Malaysia. We are also the registered owner of five domain names, namely “agapeatpgroup.com”, “agapeatpcorporation.com”, “atpsummit.com”, “agapeatpgroup.my” and “agapeatpgroup.com.my.” Category Registration Number Trade Marks Logo Ownership Country Effective Date and Duration Trademark 06010456 Agape Superior Living Sdn. Bhd.
We have one applied to register an additional one trademarks in Malaysia. We are also the registered owner of five domain names, namely “agapeatpgroup.com”, “agapeatpcorporation.com”, “atpsummit.com”, “agapeatpgroup.my” and “agapeatpgroup.com.my.” Employees As at December 31, 2023, we had 21 employees (excluding our Directors).
Effective production of ATP enhances both physical as well as mental health, and helps the body to build up resistance to diseases.
Effective production of ATP enhances both physical as well as mental health, and helps the body to build up resistance to diseases. ATP3 Ionized Cal-Mag ATP3 Ionized Cal-Mag is a specialized calcium and magnesium minerals supplement that is designed to transform into ionic form completely before entering the body.
DSY Wellness offers health consultancy and advice, as well as nutritional supplements at medical dosages, as prescribed by in-house nutritional practitioners. 18 Our Business Model We believe that the direct-selling channel is ideally suited to marketing our products, because sales of health solution and personal care products are strengthened by ongoing personal contact between retail consumers and distributors.
Jumpstart a fascinating life and regain youth and vitality with LIVO5, it’s packed with high-nutrient-density superfoods for optimal health. 14 Our Business Model We believe that the direct-selling channel is ideally suited to marketing our products, because sales of health solution and personal care products are strengthened by ongoing personal contact between retail consumers and distributors.
Effortlessly Easily remove light makeup, dirt and impurities. Easy to rinse with no residual. BEAUNIQUE The Company’s BEAUNIQUE product series focuses on the research of our diet’s impact on modifying gene expressions in order to address genetic variations and deliver personalized nutrigenomic solutions for every individual.
The unique mousse like-foam delivers a comfortable and soft feeling of the skin during and after use without compromising the moisturizing level and viscoelastic properties of the skin. 12 BEAUNIQUE The Company’s BEAUNIQUE product series focuses on the research of our diet’s impact on modifying gene expressions in order to address genetic variations and deliver personalized nutrigenomic solutions for every individual.
We then communicate our findings and proposals to third-party suppliers to improve formulations and to bring about new products for distributors and members who are ready to market to end-users. Up to the year ended December 31, 2020, we purchased from Agape S.E.A. Sdn Bhd, one of our largest suppliers, through the SEA Supply Agreement.
We then communicate our findings and proposals to third-party suppliers to improve formulations and to bring about new products for distributors and members who are ready to market to end-users. Quality Control At present, our products are predominately sold in Malaysia.
Our Suppliers Currently, all of our products are acquired from unrelated third parties located in Australia, the United States, Germany and Malaysia, and rebranded by us. Due to the high costs associated with research and development of nutrition and health products, we do not maintain any facilities to produce our products.
Due to the high costs associated with research and development of nutrition and health products, we do not maintain any facilities to produce our products. We have no expenditures or expenses relating to research and development of our product.
It promotes hemoglobin production hence is suitable especially for women and individual who experienced accidental bleedings. 11 YFA-Young Formula YFA-Young Formula is a 100% natural unique formula, a combination of amino acid, vitamins, and minerals and is the best anti-aging and youthful maintenance supplement.
The colloidal nanosized iron provides high zeta potential promotes better absorptivity and cellular iron uptake through the ion channel. 10 YFA-Young Formula YFA-Young Formula is a 100% natural unique formula, a combination of amino acid, vitamins, and minerals and is the best anti-aging and youthful maintenance supplement.
Our BEAUNIQUE product series focuses on the research of our diet’s impact on modifying gene expressions to address genetic variations and deliver a personalized nutrigenomic solution for every individual. On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with Mr.
Our BEAUNIQUE product series focuses on the research of our diet’s impact on modifying gene expressions to address genetic variations and deliver a personalized nutrigenomic solution for every individual. The Easy and Tasty Series (“E.A.T.S”) is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living.
Steve Yap, following which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The establishment of DSY Wellness is a further expansion of our business into the health and wellness industry. Mr.
The establishment of DSY Wellness is a further expansion of our business into the health and wellness industry. Mr. Steve Yap readily owns 33 proprietary formulas for treating non-communicable disease which he has agreed to bring into the company for joint commercialization. Mr.
Long-lasting moisture retention up to 72 hours REMODELLING - Proven to increase skin firmness +200% (cheek, under-eye and neck). Enhance skin viscoelasticity to improves skin roughness ÉNERGÉTIQUE Mousse Facial Cleanser Formulated with the mildest surface-active agents available on the market, this facial cleanser was designed to deliver a distinct A to E cleansing benefits to consumers.
Filled in an innovative yet convenient and hygienics syringe packaging, this HA serum also ensure consumer-perceivable benefits for every skin type. ÉNERGÉTIQUE Mousse Facial Cleanser Formulated with the mildest surface-active agents available on the market, this facial cleanser was designed to deliver a distinct A to E cleansing benefits to consumers.
Bhd. entered into a business collaboration agreement with ASL to carry out certain wellness programs. We currently offer three series of products: ATP Zeta Health Program, ÉNERGÉTIQUE and BEAUNIQUE. Our ATP Zeta Health Program is a health program designed to assist in the elimination of various diseases caused by environmental pollutants, unhealthy dietary intake and unhealthy lifestyles.
Our ATP Zeta Health Program is a health program designed to assist in the elimination of various diseases caused by environmental pollutants, unhealthy dietary intake and unhealthy lifestyles. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians.
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Benefits: ● Stimulates instant bio-energy production at the cellular level to ensure sufficient supply of bio energy for body cell. ● Promotes better metabolism at the cellular level. ● Promotes healthy and optimal growth of bones system, teeth structure and muscle tissue of children. ● Improves the digestion and nutrient absorption powers of body cell. ● Promotes cell detoxification and repair capabilities in order to enhance cell self-healing ability. 7 ATP2 Energized Mineral Concentrate ATP2 is a nutritional supplement made from the finest plant substances and also is a proprietary formulation of a super-energized colloidal concentrate developed from a dibase solution.
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The new formula is comprised of 11 food groups, including potent mangosteen skin extract.
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Its formula supports and enhances nutritional biochemical activities.
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Soy Protein Isolate Powder Made from natural high quality soy isolate protein, an ideal and complete protein source for diet. 13 Mix Soy Protein Isolate Powder With Black Sesame Made from natural high-quality soy isolate protein and pure natural black sesame seeds. It’s packed with protein and nutrients for your balanced diet.
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Benefits: ● Supports and enhance nutritional biochemical activities (nutrient absorption and waste metabolism). ● Breaks down or oxidised toxins and waste material to promote cellular detoxification and improve blood circulation. ● Increases cellular respiration and energy production to reduce fatigue and maintain energy level. ● Increases oxygen level in body cells to create a high oxygen environment in the body, which possibly help to prevent the growth of harmful pathogens that contribute to diseases. ● Provides sufficient antioxidants that act as a superior scavenger of free radicals, to strengthen the body cells resistance against oxidative damages.
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Livo5 The unprecedented antioxidant combination of Cactus, LingZhi, Turmeric.
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Benefits: ● Strengthens the bone system and promote better bone development. ● Strengthens the teeth structure and prevent teeth damages. ● Provides abundant of ionic calcium and magnesium to prevent chronic diseases through better blood circulation and acid-base regulation. ● Promotes better relaxing of nervous system and regulations of neurotransmitters which helps to enhance sleep quality. ● Promotes better relaxing of muscle to prevent muscle soreness and cramps. 8 ATP4 Omega Blend ATP4 Omega Blend is a proprietary oil blend that is rich in undamaged polyunsaturated essential fatty acid, which is fully extracted from plant-based ingredients.
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Benefits: ● Regulates cholesterol and triglycerides levels to promote better blood circulation. ● Regulates inflammation, the unifying component of many diseases, and enhance cell repairing activities. ● Regulates hormones production and functions in the body through supplies of the balanced ratio of Omega 3 and Omega 6. ● Promotes healthy functioning of the brain through the maintenance of healthy impulse transmission in brain cells that is crucial for memory and learning ability.
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It is a 100% natural immune enhancer, safe and does not cause any allergic reactions. 9 Benefits: ● Strengthens the function of immune cells to build up a better immune response of body for external and internal protections ● Promotes better cell repairing and regulate inflammatory responses in wound healing. ● Enhances the function of immune cell against damages caused by radiation. ● Helps to normalize blood sugar levels.
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FOS helps increase intestinal bifidobacteria and helps maintain a good intestinal environment. ● Slows the absorption of sugar and lipid into the bloodstream which helps improve blood sugar and cholesterol level. ● Induces better satiety, which results in reduced total food intake and helps in achieving an ideal weight management.
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Benefits: ● Promotes better hemoglobin production to improve iron deficiency anemia. ● Iron is a component of hemoglobin in red blood cell which carries oxygen to all part of the body.
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Therefore, it helps to improve blood circulation and prevent some oxygen deficiency symptoms through enhancement of oxygen delivery and nutrient circulation as well as toxins excretion. ● Iron is a factor in red blood cell formation.
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Benefits: ● Enhances the production of bio-energy ATP and metabolism, which aids in reducing body fat accumulation and promote strong muscles building. ● Stimulates the production of collagen to restore skin elasticity and reduce wrinkles. ● Reduces pigmentation and dark spots on face caused by hormonal imbalances. ● HGH builds and repairs tissues and thus has an effect on hair cells at the hair root to promote healthy hair growth. ● Enhances memory and cardiovascular function and prevent various chronic diseases due to HGH deficiency.
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Immune health ● Enhanced adaptive immune response. ● Provides anti-inflammatory functionality. ● Strengthens immunity against bacteria and viruses. Metabolic health ● Reduces the risk of obesity. ● Reduces the risk of vascular diseases. ● Reduces the risk of Type II Diabetic. Brain health ● Reduces the risk of neurodegenerative diseases.
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Skin health ● Systemic photoprotection. ● Reduces dark spot formation. ● Alleviates skin wrinkle and inflammation induced by UV-B irradiation. ORYC-Organic Youth Care Cleansing Bar ORYC-Organic Youth Care Cleansing Bar is a natural, organic cleansing soap for skin. It contains pure Australian-accredited natural and organic plant oils acting as a high quality and natural skin lubricant.
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It maintains the softness of the skin while promoting skin beauty and radiance.
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Benefits: ● With its biodynamic avocado oil and vanilla extract, remove impurities, leaving skin clear, fresh and clean. ● With its biodynamic, coconut, almond and olive oil, moisturize and texturize the skin to prevent skin drying. ● In acting as natural anti-bacterial and anti-inflammatory agents, reduce the risks of skin infections and allergies. *References alluding to the efficacy and effects of our products are based on client testimonials. 13 ÉNERGÉTIQUE The following is a list of our ÉNERGÉTIQUE products: N°1 Med-Hydration Formulated with the patented Sea Grape (Caulerpa lentillifera) extract, the N°1 Med-Hydration enhances skin moisture and luminosity.
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This treatment effectively improves the moisture content of the inner skin layer and rejuvenate the skin barrier function to avoid moisture loss.
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Benefits: ● Locking the skin moisture and nutrients, strengthening the skin barrier function and boosting the skin’s moisture level. ● Increases the skin’s natural moisturizing factor (PCA) and skin layer glycoprotein connectivity to maintain the skin’s moisture. ● Effectively retains water, provides moisturization, restores skin elasticity, and promotes the growth of fibroblasts for moisturization, removes dryness, regains skin’s elasticity and smoothness. ● Delivers an instant boost of skin moisture content up to 45.7% in just 5 minutes of application and synergistically ensuring a profound and long-lasting skin moisturization and hydratio n. 14 N°2 Med-Whitening Formulated with patented Peach Blossom Stem Cell Extract, the N°2 Med-Whitening has clinically shown its efficacy in inhibiting the melanin synthesis, down-regulating the melanin synthesis gene, boosting skin moisture level and protecting skin against UV radiation.
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Benefits: ● Suppresses melanin production and fight against UV radiation to protect skin cells and result in whitening effect. ● Stimulates interstitial hyperplasia cell and helps in increasing the moisturizing ceramide by 7.4 times in order to remove skin roughness and smoothing skin. ● Enhances the skin brightness up to 6.3% in just 5 minutes of application and synergistically rejuvenate a profound and long-lasting skin ability in anti-UV damage. 15 N°3 Med-Firming Formulated with the patented Djulis (Chenopodium formosanum Koidz) Seed Extract, the native cereal plant in Taiwan and traditionally called “ruby of cereals.” The formulation is clinically proven to be effective in stimulation of collagen secretion and anti-advances glycation end-products (AGEs) reducing the glycation of skin collagen, provide protection and maintenance of the basal skin collagen production.
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Benefits: ● Suppresses the skin collagen glycation process, reduces collagen loss, and enhancing collagen secretion. ● Repairs the dead skin tissue, smooth wrinkles to restore the smoothness and health of the skin. ● Prevents wrinkles formation and providing the essential skin moisture content. ● Boosts skin elasticity by up to 14.4%. and improve sagging skin by 135 in just 5 minutes of application. ÉNERGÉTIQUE Hyaluronic Acid (HA) Serum Formulated with four functional hyaluronic acid and a unique peptide, this scientifically advanced and intensive quintuple action serum proven to deliver 5Rs dermal benefits.
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Filled in an innovative yet convenient and hygienics syringe packaging, this HA serum also ensure consumer-perceivable benefits for every skin type. 16 Benefits: ● REBALANCE - Hydrates the skin surface by forming a protection layer and keep skin moisturized even after cleansing ● RECOVER – Repairs the out-balanced lamellar layer to act as barrier to prevent skin moisture from evaporation ● REGENERATE - Promotes the production of Type I pro-collagen and boost skin’s own production of Hyaluronic Acid up to 3 times ● REHYDRATE - Nano-sized particles with high capacity of water-holding allow deep penetration and bestows moisture from inside the skin.
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The unique mousse like-foam delivers a comfortable and soft feeling of the skin during and after use without compromising the moisturizing level and viscoelastic properties of the skin. Benefits: 1. All Skin Type ● Hypoallergenic ● Non-comedogenic 2. Balance ● pH-balanced formula with buffer capacity at pH 5.5 of the skin. 3.
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Comfortable ● Mild to skin and eyes without irritating or drying your skin ● Comfortable and soft feeling – prolonged comfortable to skin before and after use. Accidental consuming would not be harmful to your body. 17 4. Dense ● Mousse-like foam very fine porous foam and smooth skin-feel during use 5.
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Benefits: ● Reduces total carbohydrates calories intake with scientifically proven effect on weight management. ● Regulates blood sugar levels with scientifically proven efficacy. ● Improves cellular uptake of sugars for bioenergy ATP production. ● Maintains insulin hormone balance and helps prevent diabetes. ● Improves blood lipids compositions and helps prevent cardiovascular disease.
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For more information, please see “The SEA Supply Agreement” below. For the year ended December 31, 2022, we purchased from our three largest suppliers through purchase order forms which included customary terms including unit price, quantity, total price of the orders, and order lead times.
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We did not enter into any long term supply agreements with our major suppliers for the years ended December 31, 2022 and 2021. 21 The SEA Supply Agreement Agape S.E.A Sdn Bhd is a dietary supplement company founded in Malaysia. We originally entered into the SEA Supply Agreement with Agape S.E.A.
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Sdn Bhd, in May 2018, which was one of our largest suppliers at the time. Under the SEA Supply Agreement we purchased dietary supplement products and skincare products from Agape S.E.A.
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The following summarizes the major terms of the SEA Supply Agreement: Sales of Goods: The agreement stipulates the type of goods sold, transported and delivered, with a minimum quantity per order between 5,000 to 10,000 units per order. Purchase price: The agreement stipulates that the Company shall place order for goods using a purchase order.
Removed
The purchase prices under the SEA Supply Agreement are based on and in accordance with each purchase order. Agape S.E.A shall be responsible for all taxes in connection with the purchase of goods under the SEA Supply Agreement.
Removed
Payment: Payment for goods is due within seven days of the date of the Agape S.E.A’s invoice, which date will not be before the date of delivery of goods. Delivery: The delivery date and delivery destination of each purchase shall be determined by both parties in a purchase order.
Removed
Agape S.E.A. shall deliver the goods in accordance with the terms and conditions specified separately in each purchase order, including without limitation the quantity and delivery date. The Company is responsible for freight insurance arising from shipment to a single delivery destination.
Removed
For destinations outside of Malaysia, the Company is also responsible for freight, freight insurance, tariffs and custom clearance fees. Risk of Loss: Title to and risk of loss of the goods shall pass to the Company upon shipment of the goods.
Removed
Right of Inspection The Company shall be allowed to examine the goods once received and shall do so within fourteen days after the receipt of the goods. In the event the Company discovers any damages, shortages or other nonconformance of the goods, the Company shall notify Agape S.E.A within fourteen days specifying the basis of the claim.
Removed
In the event of nonconformance, the Company has the following options: -retuning the goods for a replacement at Agape S.E.A’s expense;-returning the goods at Agape S.E.A’s expense for a credit of the full purchase price on future transactions; or-returning the goods at Agape S.E.A’s expense for a full refund of the purchase price.
Removed
Warranties: The buyer acknowledges that it has not relied on, and that Agape S.E.A has not made any representations or warranties with respect to the quality or condition of the goods, and is purchasing the goods on an “as is” basis.
Removed
Security Interest: The Company grants Agape S.E.A a security interest in the goods, until the Company has paid the seller in full for the goods.
Removed
Seller Representations and Warranties: Agape S.E.A warrants that the goods are free, and at the time of delivery will be free, from any security interest or other liens or encumbrances, and there are no outstanding titles or claims of title hostile to the rights of Agape S.E.A in the goods.
Removed
Limitation of Liability: Agape S.E.A will not be liable for any indirect, special, consequential or punitive damages (including lost profits) arising out of or relating to this agreement or the transactions contemplated by it contemplates.
Removed
Assignment: Neither party may not assign any of its rights or delegate any performance under the agreement, except with prior consent from the other party Governing Law: The terms of the agreement shall be governed by and construed in accordance with the laws of the State of England.
Removed
Breach/ Termination: Each party has an obligation to notify the other party of any breach, and where the breach is rectifiable, the breaching party has 21 days from the date of notification of its breach to rectify. 22 Quality Control At present, our products are predominately sold in Malaysia.
Removed
Malaysia May 20, 2016 For 10 Years [Class 30] Trademark 2017005364 Agape ATP Corporation Malaysia May 5, 2017 For 10 Years [Class 35] Trademark 2019023588 Agape ATP Corporation Malaysia July 3, 2019 For 10 Years [Class 3] 24 Trademark 2019023590 Agape ATP Corporation Malaysia July 3, 2019 For 10 Years [Class 5] Trademark 2019023589 Agape ATP Corporation Malaysia July 3, 2019 For 10 Years [Class 16] Trademark 2019036886 Agape Superior Living Sdn.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe impact on the company as a result of the MCO includes: temporary closure of offices and travel restrictions prevented the company and our distributors from organizing offline events, which in turn stalled our marketing effort; temporary suspension of product supplies to our distributors and members due supply chain disruption as our suppliers and logistics providers faced disruption and delay in their operation; and the COVID-19 outbreak has resulted in a decline in overall economic environment, which in turn lower the spending power of the consumer and consequently, the revenue of the company.
Biggest changeThe impacts on the company as a result of the Orders included: temporary closure of offices and travel restrictions prevented the company and our distributors from organizing offline events, which in turn stalled our marketing effort; temporary suspension of product supplies to our distributors and members due supply chain disruption as our suppliers and logistics providers faced disruption and delay in their operation; and the COVID-19 outbreak has resulted in a decline in overall economic environment, which in turn lower the spending power of the consumer and consequently, the revenue of the company. 25 In general, our business could be adversely affected by the effects of epidemics, pandemic or, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as flood or hazardous air pollution, or other outbreaks.
For example, in recent years, there have been outbreaks of epidemics in various countries, including Malaysia. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has spread rapidly to many parts of the world, including Malaysia. In March 2020, the World Health Organization declared the COVID-19 a pandemic.
For example, in recent years, there have been outbreaks of epidemics in various countries, including Malaysia. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has spread rapidly to many parts of the world, including Malaysia. In March 2020, the World Health Organization (the “WHO”) declared the COVID-19 a pandemic.
In addition, as we expand our business into overseas markets, there may be a shortage of third-party contractors that meet our quality standards and other selection criteria in such locations and, as a result, we may not be able to engage a sufficient number of high-quality third-party contractors in a timely manner, which may adversely affect our delivery schedules and delivery costs and hence our business, results of operations and financial conditions. 33 We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
In addition, as we expand our business into overseas markets, there may be a shortage of third-party contractors that meet our quality standards and other selection criteria in such locations and, as a result, we may not be able to engage a sufficient number of high-quality third-party contractors in a timely manner, which may adversely affect our delivery schedules and delivery costs and hence our business, results of operations and financial conditions. 24 We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
However, the Company no longer relied on the VIE after the fiscal year ended December 31, 2020. For the years ended December 31, 2022 and 2021, Agape S.E.A. Sdn Bhd did not provide any purchase to the Company. In addition, Agape S.E.A.’s impact to our consolidated financial statements constitutes less than 1% of our total consolidated assets.
However, the Company no longer relied on the VIE after the fiscal year ended December 31, 2020. For the years ended December 31, 2023 and 2022, Agape S.E.A. Sdn Bhd did not provide any purchase to the Company. In addition, Agape S.E.A.’s impact to our consolidated financial statements constitutes less than 1% of our total consolidated assets.
Any of these changes could result in a material adverse effect on our business, financial conditions or results of operations. 27 The success of our products depends on a number of factors including our ability to accurately anticipate changes in market demand and consumer preferences, our ability to differentiate the quality of our products from those of our competitors, and the effectiveness of our marketing and advertising campaigns for our products.
Any of these changes could result in a material adverse effect on our business, financial conditions or results of operations. 19 The success of our products depends on a number of factors including our ability to accurately anticipate changes in market demand and consumer preferences, our ability to differentiate the quality of our products from those of our competitors, and the effectiveness of our marketing and advertising campaigns for our products.
This may result in lower sales revenue, materially and adversely affecting our business, financial condition and results of operations. 31 We may not be able to manage the growth of our business and our expansion plans and operations or implement our business strategies on schedule or within our budget, or at all.
This may result in lower sales revenue, materially and adversely affecting our business, financial condition and results of operations. 22 We may not be able to manage the growth of our business and our expansion plans and operations or implement our business strategies on schedule or within our budget, or at all.
Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty. 37 Furthermore, on March 11, 2020, the World Health Organization or WHO declared the corona virus or COVID-19 a pandemic.
Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty. 28 Furthermore, on March 11, 2020, the World Health Organization or WHO declared the corona virus or COVID-19 a pandemic.
We are witnessing the adverse impact on the purchasing power of consumers in Malaysia, where our products are mainly sold as a direct result of the prolonged pandemic. 38 Risks Related to our Common Stock Volatility in our shares price may subject us to securities litigation.
We are witnessing the adverse impact on the purchasing power of consumers in Malaysia, where our products are mainly sold as a direct result of the prolonged pandemic. 29 Risks Related to our Common Stock Volatility in our shares price may subject us to securities litigation.
If we experience any business disruption and litigation, we may incur additional costs and have to divert our management’s attention and resources on such matters, which may adversely affect our business, financial condition and results of operations. 28 We operate in a heavily regulated industry.
If we experience any business disruption and litigation, we may incur additional costs and have to divert our management’s attention and resources on such matters, which may adversely affect our business, financial condition and results of operations. 20 We operate in a heavily regulated industry.
While the Company have not made any purchases from the VIE for the year ended December 31, 2022, we may expect to continue to rely on ASL’s beneficiary ownership structure with Agape S.E.A. to operate our business.
While the Company have not made any purchases from the VIE for the year ended December 31, 2023, we may expect to continue to rely on ASL’s beneficiary ownership structure with Agape S.E.A. to operate our business.
Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects. 39 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects. 30 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
ITEM 1A. RISK FACTORS We are exposed to concentration risk of heavy reliance on our three largest suppliers for the supply of our products, and any shortage of, or delay in, the supply may significantly impact on our business and results of operation.
ITEM 1A. RISK FACTORS We are exposed to concentration risk of heavy reliance on our two largest suppliers for the supply of our products, and any shortage of, or delay in, the supply may significantly impact on our business and results of operation.
As a result, a product liability or other judgment against us, or a product recall, could have a material adverse effect on our business, financial condition or results of operations. 36 Our business is susceptible to food-borne illnesses.
As a result, a product liability or other judgment against us, or a product recall, could have a material adverse effect on our business, financial condition or results of operations. 27 Our business is susceptible to food-borne illnesses.
A such, the extent to which the coronavirus may continue to adversely impact the Malaysian economy is uncertain. In the event that the Malaysia economy suffers, demand for our products may diminish, which would in turn result in our profitability.
As such, the extent to which the coronavirus may continue to adversely impact the Malaysian economy is uncertain. In the event that the Malaysia economy suffers, demand for our products may diminish, which would in turn result in our profitability.
We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset- backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $50.0 million during the most recently completed fiscal year.
We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $100 million during the most recently completed fiscal year.
We currently do not have long term supply agreements with our three largest suppliers for the year ended December 31, 2022, and we typically make ad hoc purchases through submission of purchase order forms.
We currently do not have long term supply agreements with our two largest suppliers for the year ended December 31, 2023, and we typically make ad hoc purchases through submission of purchase order forms.
We launched our ATP Zeta Super Health Program business in June 2016, the same month in which our Company was incorporated, followed by our ENERGETIQUE” and “BEAUNIQUE” series in July 2018 and March 2019, respectively, and thus, we have a limited operating history.
We launched our ATP Zeta Super Health Program business in June 2016, the same month in which our Company was incorporated, followed by our ENERGETIQUE”, “BEAUNIQUE” and “E.A.T.S.” series in July 2018, March 2019 and March 2023 respectively, and thus, we have a limited operating history.
These risks and challenges include our ability to, among other things: manage our future growth; increase the utilization of our products by existing and new customers; maintain and enhance our relationships with customers and distributors; improve our operational efficiency; attract, retain and motivate talented employees; cope with economic fluctuations; navigate the evolving regulatory environment; and defend ourselves against legal and regulatory actions.
These risks and challenges include our ability to, among other things: manage our future growth; increase the utilization of our products by existing and new customers; maintain and enhance our relationships with customers and distributors; improve our operational efficiency; attract, retain and motivate talented employees; cope with economic fluctuations; navigate the evolving regulatory environment; and defend ourselves against legal and regulatory actions. 23 Our historical growth rates may not be indicative of our future growth.
Negative developments in Malaysia’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. The Malaysian economy registered modest growth of approximately 8.7% and 3.1% in 2022 and 2021 respectively, according to the Department of Statistics Malaysia.
Negative developments in Malaysia’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. The Malaysian economy registered modest growth of approximately 3.0% and 8.7% in December 31, 2023 and December 31, 2022 respectively, according to the Department of Statistics Malaysia.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the 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 generally accepted accounting principles and includes those policies and procedures that: pertain to the maintenance of records in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 29 In connection with the audit of our consolidated financial statements as of December 31, 2022, we identified three “material weaknesses”, and other control deficiencies including significant deficiencies in our internal control over financial reporting.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the 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 generally accepted accounting principles and includes those policies and procedures that: pertain to the maintenance of records in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
We may be unable to timely complete our evaluation testing and any required remediation. 30 During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of SOX 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of SOX 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting.
If we are unable to manage the growth and increased complexity of our business, fail to control our costs and expenses, or fail to execute our strategies effectively, our business and business prospects may be materially and adversely affected. 32 Our historical growth rates may not be indicative of our future growth, and we may not be able to generate similar growth rates in future periods.
If we are unable to manage the growth and increased complexity of our business, fail to control our costs and expenses, or fail to execute our strategies effectively, our business and business prospects may be materially and adversely affected.
As of November 2022, Malaysia ranks #27 in the list of countries with the highest COVID-19 cases as recorded under the coronavirus statistics of the “worldometer”. Total COVID-19 cases in Malaysia hit approximately 4.9 million and associated fatality of 36,566. These figures are huge relative to the small size economy of the country.
As of December 2023, Malaysia ranks #28 in the list of countries with the highest COVID-19 cases as recorded under the coronavirus statistics of the “worldometer”. Total COVID-19 cases in Malaysia hit approximately 5.2 million and associated fatality of 37,293. These figures are huge relative to the small size economy of the country.
All internal auditors will be independent of our operations and will report directly to the audit committee. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied.
The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied.
We are continually executing a number of growth initiatives, strategies and operating plans designed to enhance our business. In 2023 we plan to increase our revenue stream from health solution advisory services from our “ATP Zeta Health Program”, “ENERGETIQUE” and “BEAUNIQUE” series to align with our growth strategies.
We are continually executing a number of growth initiatives, strategies and operating plans designed to enhance our business. In 2023, we added a new series of product, “E.A.T.S” to our existing revenue streams “ATP Zeta Health Program”, “ENERGETIQUE” and “BEAUNIQUE” series to align with our growth strategies.
Our total revenues increased by approximately 82.6% from approximately $1.0 million for the year ended December 31, 2021 to approximately $1.9 million for the year ended December 31, 2022. Our gross profit increased by approximately 65.4% from approximately $0.7 million for the year ended December 31, 2021 to approximately $1.2 million for the year ended December 31, 2022.
Our total revenues decreased by approximately 22.9% from approximately $1.9 million for the year ended December 31, 2022 to approximately $1.4 million for the year ended December 31, 2023. Our gross profit decreased by approximately 21.3% from approximately $1.2 million for the year ended December 31, 2022 to approximately $0.9 million for the year ended December 31, 2023.
To help counter the transmission of COVID-19, from March 18, 2020 to April 26, 2022, the government of Malaysia initiated (i) Movement control orders (“MCO”), . The MCO had resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia.
To help counter the transmission of COVID-19, from March 18, 2020 to April 26, 2022, the government of Malaysia initiated (i) Movement control orders (“MCO”).
Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has spread rapidly to many parts of the world, including Malaysia. In March 2020, the World Health Organization declared the COVID-19 a pandemic.
Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has spread rapidly to many parts of the world, including Malaysia. In March 2020, the WHO declared the COVID-19 a pandemic. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia for prolong periods.
For the year ended December 31, 2022, we purchased $198,376, $82,434 and $79,365 from three of our major suppliers, represented approximately 53%, 22% and 21%, respectively, of our total purchases. Our business, financial condition and operating results depend on the continuous supply of products from our major suppliers and our continuous supplier-customer relationships with them.
For the year ended December 31, 2023, we purchased $272,993 and $128,099 from two of our major suppliers, represented approximately 57.5% and 27.0% respectively, of our total purchases. Our business, financial condition and operating results depend on the continuous supply of products from our major suppliers and our continuous supplier-customer relationships with them.
GAAP; (ii) lack of a functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures and lack of adequate policies and procedures in internal audit function to ensure that the Company’s policies and procedures have been carried out as planned; (iii) lack of proper IT policies and procedures developed for system change management, user access management, backup management and service organization management.
GAAP; (ii) lack of a functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures and lack of adequate policies and procedures in internal audit function to ensure that the Company’s policies and procedures have been carried out as planned. 21 We have taken measures and plan to continue to take measures to remedy these material weaknesses.
Our historical growth rates may not be indicative of our future growth.
Our historical growth rates may not be indicative of our future growth, and we may not be able to generate similar growth rates in future periods.
(ii) Conditional Movement Control Order (“CMCO”) where most business sectors were allowed to operate under strict rules and Standard Operating Procedures mandated by the government of Malaysia. (iii) Recovery Movement Control Order (“RMCO”). At the height of the pandemic, on January 12, 2021, the Malaysian government even declared a state of emergency nationwide to combat COVID-19.
The MCO had resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia; (ii) Conditional Movement Control Order (“CMCO”) where most business sectors were allowed to operate under strict rules and Standard Operating Procedures mandated by the government of Malaysia; (iii) Recovery Movement Control Order (“RMCO”).
On April 27, 2022, the Malaysian government announced the country had entered into the endemic phase with further easing of restrictions. We are witnessing the adverse impact on the purchasing power of consumers in Malaysia, where our products are mainly sold as a direct result of the prolonged pandemic.
At the height of the pandemic, on January 12, 2021, the Malaysian government even declared a state of emergency nationwide to combat COVID-19. On April 27, 2022, the Malaysian government announced the country had entered into the endemic phase with further easing of restrictions.
The epidemic has resulted in intermittent quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia. Substantially all of our revenues are concentrated in Malaysia. Consequently, our results of operations were adversely affected as a result of the implementation of Movement Control Order (MCO) by the Malaysian government.
However, COVID-19 still affects various parts of the world. Substantially all of our revenues are concentrated in Malaysia. Consequently, our previous results of operations were adversely affected as a result of the previous implementations of various orders (the “Orders”) imposed by the Malaysian government in response to COVID-19 prior to April 2022.
Removed
We have taken measures and plan to continue to take measures to remedy these material weaknesses.
Added
In connection with the audit of our consolidated financial statements as of December 31, 2023, we identified three “material weaknesses”, and other control deficiencies including significant deficiencies in our internal control over financial reporting.
Removed
The measures that we are planning to take include, but not limited to, hiring of suitable IT personnel to develop and implement proper IT policies and procedures for system change management, user access management, backup management and service organization management, form an internal audit function and have plans to hire internal auditors to strengthen our overall governance.
Added
The measures that we are planning to take include, but not limited to, hiring full-time personnel with appropriate levels of accounting knowledge and experience to address the U.S.
Removed
In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future.
Added
GAAP or provide training and development opportunities for existing personnel to enhance their accounting knowledge and expertise and forming an internal audit function and have plans to hire internal auditors to strengthen our overall governance. All internal auditors will be independent of our operations and will report directly to the audit committee.
Removed
Because of the uncertainty surrounding the COVID-19 outbreak, the financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time. There is no guarantee that our total revenues will grow or remain at the similar level year over year in the fiscal year 2023.
Added
The epidemic has resulted in intermittent quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia. On April 27, 2022, the Malaysian government announced the country had entered into the endemic phase with further easing of restrictions. In May 2023, the WHO declared an end to COVID-19 as a public health emergency of international concern.
Removed
We may have to record downward adjustments or impairment in the fair value of investments in the fiscal year 2023, if conditions have not been significantly improved and global stock markets have not recovered from recent declines. 34 In general, our business could be adversely affected by the effects of epidemics, pandemic or, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as flood or hazardous air pollution, or other outbreaks.
Added
On April 27, 2022 the Malaysian government announced the country had entered into the endemic phase with further easing of restrictions. In May 2023, the WHO declared an end to COVID-19 as a public health emergency of international concern. However, COVID-19 still affects various parts of the world. 26 Substantially all of our revenues are concentrated in Malaysia.
Removed
The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in Malaysia for prolong periods. 35 Substantially all of our revenues are concentrated in Malaysia.

Item 2. Properties

Properties — owned and leased real estate

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Removed
Business support services are primarily rendered from: Our principal executive office at 1705 – 1708, Level 17, Tower 2, Faber Towers, Jalan Desa Bahagia, Taman Desa, 58100 Kuala Lumpur, Malaysia. Room 2708-9, 2F, The Metropolis Tower, 10 Metropolis Drive, Hunghom, Kowloon, Hong Kong.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMINE SAFETY DISCLOSURES Not applicable. 40 PART II
Biggest changeMINE SAFETY DISCLOSURES Not applicable. 31 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosure 40 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. Selected Financial Data 41 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 42 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8.
Biggest changeItem 4. Mine Safety Disclosure 31 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6. Selected Financial Data 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.
Removed
Financial Statements and Supplementary Data 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 51 Item 9A. Controls and Procedures 51

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is currently listed on the OTC Markets Pink Sheets under the trading symbol “ATTP.” There is no active trading market in the Company’s securities.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company successfully completed its uplisting from OTC Pink to Nasdaq Capital Market on October 11, 2023, and has since assumed the new stock symbol of ATPC.
Holders As of December 31, 2022, we had 75,452,012 shares of our Common Stock par value, $0.0001 issued and outstanding. There were 1,296 record holders of our Common Stock. Transfer Agent and Registrar Our transfer agent is VStock Transfer, LLC, with an address at 18, Lafayette Place, Woodmere, New York 11598 and telephone number is +1 (212) 828-843.
Holders As of December 31, 2023, we had 76,966,712 shares of our Common Stock par value, $0.0001 issued and outstanding. There were 1,359 record holders of our Common Stock. Transfer Agent and Registrar Our transfer agent is VStock Transfer, LLC, with an address at 18, Lafayette Place, Woodmere, New York 11598 and telephone number is +1 (212) 828-843.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers We have not repurchased any shares of our common stock during the year ended December 31, 2022.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers The Company repurchased 135,300 shares of our common stock at an average price $0.69 per share during the year ended December 31, 2023.
Added
There were 1,650,000 number of new shares offered for sale at $4.00 per share at this Public Offering. Pursuant to the Underwriter’s Warrant Agreement, the Company issued warrant to purchase 115,500 shares of Company’s common stock to the Underwriter at an exercise price of $4.40 per share, exercisable from October 13, 2023 to October 10, 2028.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeYears Ended December 31, 2022 2021 Revenue $ 1,856,564 $ 1,016,962 Net loss attributable to Agape ATP Corporation $ (1,686,899 ) $ (2,524,244 ) Loss per share (basic and diluted) $ (0.02 ) $ (0.01 ) As of December 31, 2022 2021 Total assets $ 2,791,749 $ 4,724,535 Total liabilities $ 1,229,295 $ 1,411,899 41
Biggest changeYears Ended December 31, 2023 2022 Revenue $ 1,431,088 $ 1,856,564 Net loss attributable to Agape ATP Corporation $ (2,101,985 ) $ (1,686,899 ) Loss per share basic and diluted $ (0.03 ) $ (0.02 ) As of December 31, 2023 2022 Total assets $ 5,744,494 $ 2,791,749 Total liabilities $ 1,363,631 $ 1,229,295 32
ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial data as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and 2021. This selected financial data should be read in conjunction with the consolidated financial statements and related notes included in Item 15 of this Annual Report.
ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial data as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022. This selected financial data should be read in conjunction with the consolidated financial statements and related notes included in Item 15 of this Annual Report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

35 edited+39 added15 removed43 unchanged
Biggest changeThe following summarizes the key components of our cash flows for the years ended December 31, 2022 and 2021: For the years ended December 31, 2022 2021 Net cash used in operating activities $ (811,683 ) $ (845,842 ) Net cash used in investing activities (32,119 ) (3,959 ) Net cash used in financing activities (234,466 ) (19,061 ) Effect of exchange rate on cash and cash equivalents (81,150 ) (50,890 ) Net change in cash and cash equivalents $ (1,159,418 ) $ (919,752 ) 46 Operating activities Net cash used in operating activities for the year ended December 31, 2022 was $811,683 and were mainly comprised of the net loss of $1,666,079, the non-cash deferred tax benefit of $14,751, the increase in accounts receivables of $2,824, the increase in amount due from related parties of $3,786, the payment of operating lease liabilities of $145,197 and the decrease in other payables (including related parties) and accrued liabilities of $115,085.
Biggest changeNet cash used in operating activities for the year ended December 31, 2022 was $811,683 and were mainly comprised of the net loss of $1,666,079, the non-cash deferred tax benefit of $14,751, the increase in accounts receivables of $2,824, the increase in amount due from related parties of $3,786, the payment of operating lease liabilities of $145,197 and the decrease in other payables (including related parties) and accrued liabilities of $115,085.
Following are the methods and assumptions used in determining our estimates. 47 Estimated allowance for inventories obsolescence Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value.
Following are the methods and assumptions used in determining our estimates. 38 Allowance for inventories obsolescence Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value.
On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with an independent third party which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. 42 The Company and its subsidiaries are principally engaged in the Health and Wellness Industry.
On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with an independent third party which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. 33 The Company and its subsidiaries are principally engaged in the Health and Wellness Industry.
We may experience slight delay in products delivery lead time but barring unforeseen circumstances, the setback should be temporary. 45 We are currently operating primarily in Malaysia and anticipate expanding into the Asian markets in the future, with a particular focus, at least initially, on expanding into Thailand, Indonesia and Taiwan. We will explore expansion via e-commerce.
We may experience slight delay in products delivery lead time but barring unforeseen circumstances, the setback should be temporary. 36 We are currently operating primarily in Malaysia and anticipate expanding into the Asian markets in the future, with a particular focus, at least initially, on expanding into Thailand, Indonesia and Taiwan. We will explore expansion via e-commerce.
The Company also separately derives its revenues from sales contracts with its customers with revenues being recognized when the health camp program was completed in the final day of the health camp. 49 Fair value of financial instruments The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The Company also separately derives its revenues from sales contracts with its customers with revenues being recognized when the health camp program was completed in the final day of the health camp. 40 Fair value of financial instruments The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
Via ASL, the Company offers three series of programs which consist of different services and products: ATP Zeta Health Program, ÉNERGÉTIQUE and BEAUNIQUE. The ATP Zeta Health Program is a health program designed to promote health and general wellbeing designed to prevent health diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles.
Via ASL, the Company offers four series of programs which consist of different services and products: ATP Zeta Health Program, ÉNERGÉTIQUE and BEAUNIQUE. The ATP Zeta Health Program is a health program designed to promote health and general wellbeing designed to prevent health diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles.
Off-Balance Sheet Arrangements As of December 31, 2022, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Off-Balance Sheet Arrangements As of December 31, 2023, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
The ASU requires the use of a new five-step model to recognize revenue from customer contracts.
The ASU requires the use of a five-step model to recognize revenue from customer contracts.
The net other expenses of $136,868 incurred during the year ended December 31, 2022 comprised of other expenses of $79,539, interest income of $16,190 and unrealized holding loss on marketable securities of $73,519.
The net other expenses of $136,868 incurred during the year ended December 31, 2022 comprised of other expense, net of $79,539, interest income of $16,190, unrealized holding loss on marketable securities of $73,519.
In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022.
Recently adopted Accounting Pronouncements In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022.
There is no guarantee that the Company’s total revenues will grow or remain at similar levels year over year in 2023 and beyond.
There is no guarantee that the Company’s total revenues will grow or remain at similar levels year over year in 2024 and beyond.
Investing activities Net cash used in investing activities for the year ended December 31, 2022 was $32,119, the amount entirely for the purchase of equipment and intangible assets. Net cash used in investing activities for the year ended December 31, 2021 was $3,959, the amount entirely for the purchase of equipment.
Net cash used in investing activities for the year ended December 31, 2022 was $32,119, the amount entirely for the purchase of equipment and intangible assets.
Deferred tax assets relating to certain temporary differences and tax losses are recognized as management considers it is probable that future taxable profit will be available against which the temporary differences or tax losses can be utilized.
Deferred tax assets relating to certain temporary differences and tax losses are recognized as management considers it is more likely than not that future taxable profit will be available against which the temporary differences or tax losses can be utilized.
Where the expectation is different from the original estimate, such differences will impact the recognition of deferred taxation assets and taxation in the periods in which such estimate is changed. 48 Critical Accounting Policies Revenue recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606).
Where the expectation is different from the original estimate, such differences will impact the recognition of deferred tax assets and taxation in the periods in which such estimate is changed. 39 Critical Accounting Policies Revenue recognition On July 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606).
The Company deems creating public awareness on wellness and wellbeing lifestyle as essential to enhance the provision of its health solution advisory services; and therefore, incorporated WATP. Upon its establishment, WATP started collaborating with ASL to carry out various wellness programs.
The E.A.T.S is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. The Company deems creating public awareness on wellness and wellbeing lifestyle as essential to enhance the provision of its health solution advisory services; and therefore, incorporated WATP. Upon its establishment, WATP started collaborating with ASL to carry out various wellness programs.
Gross Profit Gross profit for the year ended December 31, 2022 amounted to $1,190,522, represented a gross margin of approximately 64.1%, as compared to $719,629 for the year ended December 31, 2021, which was equivalent to a gross margin of approximately 70.8%.
Gross Profit Gross profit for the year ended December 31, 2023 amounted to $936,572, represented a gross margin of approximately 65.4%, as compared to $1,190,522 for the year ended December 31, 2022, which was equivalent to a gross margin of approximately 64.1%.
Recognition of income taxes and allowance for deferred tax assets/liabilities The Company conducts much of its business activities in Malaysia and Hong Kong and is subject to tax in each of these jurisdictions. Significant estimates are required in determining the provision for income taxes.
Allowance for deferred tax assets The Company conducts much of its business activities in Malaysia and Hong Kong and is subject to tax in each of these jurisdictions. Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
The significant decrease of other expenses, net was mainly due to the decrease of unrealized holding loss on marketable securities as a result of market price changes during the year of those investments held by the Company.
The significant change was mainly due to unrealized holding gain on marketable securities recorded during the year compared to that of unrealized holding loss for the previous year as a result of market price changes during the year of those investments held by the Company.
ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASUs 2016-13 and 2019-05 may have on its consolidated financial statements.
ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as a smaller reporting company. The Company has accordingly adopted ASUs 2016-13 and 2019-05 in the preparation of its consolidated financial statements.
The Company had a net loss of $1,666,079 for the year ended December 31, 2022 and accumulated deficits of $4,945,586 as of December 31, 2022 as compared to net loss of $2,524,680 for the year ended December 31, 2021 and accumulated deficits of $3,258,687 as of December 31, 2021.
The Company had a net loss of $2,109,935 for the year ended December 31, 2023 and accumulated deficits of $7,047,571 as of December 31, 2023 as compared to net loss of $1,666,079 for the year ended December 31, 2022 and accumulated deficits of $4,945,586 as of December 31, 2022.
Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In March 2023, the FASB issued ASU No. 2023-01 “Leases (Topic 842) Common Control Arrangements”.
The Company derives its revenues from sales contracts with its customers with revenues being recognized when the test reports are completed and delivered to its customers during the consultation section in person.
The Company analyze the test report, provides consultations to the customers, bundle it with the Company’s products and services depending on the customer’s needs. The Company derives its revenues from sales contracts with its customers with revenues being recognized when the test reports are completed and delivered to its customers during the consultation section in person.
Results of Operation For the years ended December 31, 2022 and 2021 Revenue We generated revenue of $1,856,564, which comprised of revenue from the Company’s network marketing business of $1,141,307 (approximately 61.5%); and revenue from the Company’s operations in the provision of complementary health therapies of $715,257 (approximately 38.5%) for the year ended December 31, 2022 as compared to $1,016,962, which the amount was solely attributable to revenue from the Company’s network marketing business for the year ended December 31, 2021.
Results of Operation For the years ended December 31, 2023 and 2022 Revenue We generated revenue of $1,431,088, which mainly comprised of revenue from the Company’s network marketing business of $396,122 (approximately 27.7%); and revenue from the Company’s operations in the provision of complementary health therapies of $1,033,221 (approximately 72.2%) for the year ended December 31, 2023 as compared to $1,137,763 (approximately 61.3%), which the amount was mainly attributed to revenue from the Company’s network marketing business, and $715,333 (approximately 38.5%) from the Company’s operations in the provision of complementary health therapies for the year ended December 31, 2022.
As of December 31, 2022, we had working capital of $799,239 consisting of cash and cash in bank of $523,619 and time deposits of $914,811 as compared to working capital of $2,599,281 consisting of cash and cash in bank of $622,501 and time deposits of $1,975,347 as of December 31, 2021.
As of December 31, 2023, we had working capital of $4,113,614 consisting of cash and cash in bank of $510,019 and time deposits of $4,322,441 as compared to working capital of $799,239 consisting of cash and cash in bank of $523,619 and time deposits of $914,811 as of December 31, 2022.
Net Loss We generated a net loss of $1,666,079 for the year ended December 31, 2022, as compared to $2,524,680 for the year ended December 31, 2021, a decrease of $858,601 or approximately 34.0%, predominately due to reasons as discussed above.
Net Loss We incurred a net loss of $2,109,935 for the year ended December 31, 2023, as compared to $1,666,079 for the year ended December 31, 2022, an increase of $443,856, or approximately 26.6%, predominately due to reasons as discussed above.
Operating Expenses Our operating expenses consist of selling expenses, commission expenses, general and administrative expenses and provision for doubtful accounts. Selling expenses Selling expenses for the year ended December 31, 2022 amounted to $361,414 as compared to $394,682 for the year ended December 31, 2021, a decrease of $33,268 or approximately 8.4%.
Operating Expenses Our operating expenses consist of selling expenses, commission expenses and general and administrative expenses. Selling expenses Selling expenses for the year ended December 31, 2023 amounted to $629,003 as compared to $361,414 for the year ended December 31, 2022, a significant increase of $267,589, or approximately 74.0%.
Financing activities Net cash used in financing activities for the year ended December 31, 2022 was $234,466, the amount entirely payment of deferred offering cost. Net cash used in financing activities for the year ended December 31, 2021 was $19,061, mainly comprised of payment of deferred offering cost of $15,210 and advances to related parties of $3,851.
Net cash used in financing activities for the year ended December 31, 2022 was $234,466, the amount entirely payment of deferred offering cost. Credit Facilities We do not have any credit facilities or other access to bank credit.
The increase in commission expenses was in line with the increase in revenue. General and administrative expenses (“G&A expenses”) G&A expenses for the year ended December 31, 2022 amounted to $1,957,023, as compared to $1,745,734 for the year ended December 31, 2021, representing an increase of $211,289, or approximately 12.1%.
General and administrative expenses (“G&A expenses”) G&A expenses for the year ended December 31, 2023 amounted to $2,366,016, as compared to $1,957,023 for the year ended December 31, 2022, representing an increase of $408,993, or approximately 20.9%. The Company’s G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses, depreciation expenses and provision for credit losses.
For the years ended December 31, 2022 and 2021, the Company recognize an inventory write-downs of $5,307 and $36,241, respectively. Impairment of long-lived assets Operating right-of-use assets and property, plant and equipment are stated at costs less accumulated depreciation and impairment, if any.
For the years ended December 31, 2023 and 2022, the Company recognize an inventory write-downs of $0 and $5,307, respectively.
Other (Expenses) Income For the year ended December 31, 2022, we recorded an amount of $136,868 as other expenses, net as compared to $529,045 other expenses, net for the year ended December 31, 2021, representing a significant decrease of $392,177, or approximately 74.1%, in other expenses, net.
Upon uplisted in Nasdaq capital market, the Company appointed one executive director and three independent directors, which also led the increase of executive salaries for the year ended December 31, 2023 compared to previous year. 35 Other Income (Expenses) For the year ended December 31, 2023, we recorded an amount of $40,219 as other income, net as compared to $136,868 other expenses, net for the year ended December 31, 2022, representing a significant change of $177,086.
The Company’s selling expenses typically comprise salaries and benefits expenses, credit card processing fees and promotional expenses. The decrease in selling expenses was predominantly due to decrease in salaries and benefits expenses. Commission expenses Commission expenses were $405,351 and $316,267 for the years ended December 31, 2022 and 2021, respectively, representing an increase of $89,084 or approximately 28.2%.
Commission expenses Commission expenses were $88,132 and $405,351 for the years ended December 31, 2023 and 2022, respectively, representing a significant decrease of $317,219, or approximately 78.3%. The significant decrease in commission expenses was due to the decrease in revenue from the Company’s network marketing business.
Benefit of (Provision for) Income Taxes We had benefits of income taxes of $4,055 and provision for income taxes of $137,067 for the years ended December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, our operations in Malaysia recorded benefits of income taxes due to reversal of overprovision of taxes in prior years.
During the year ended December 31, 2023, our operations in Malaysia incurred income taxes expenses as a result of provision assessment made by local tax authority for prior year tax obligations as compared to overprovision in taxes for year ended December 31, 2022.
The net other expenses of $529,405 incurred during the year ended December 31, 2021 comprised of other expense of $68,323, interest income of $25,570, unrealized holding loss on marketable securities of $505,231 and dividend income from marketable securities of $18,939.
The net other income of $40,219 incurred during the year ended December 31, 2023 comprised of other income, net of $5,724, interest income of $29,249, unrealized holding gain on marketable securities of $3,493, gain on disposal of property and equipment of $1,753.
The significant increase was in line with the increase in revenue as explained in the above. Cost of revenue typically comprise of freight-in, cost of goods purchased, packing materials and services acquired.
In addition to that, there was no inventory write-downs during the year ended December 31, 2023, whereas inventory write-downs of $5,307 were recorded for the year ended December 31, 2022. Cost of revenue typically comprise of freight-in, cost of goods purchased, packing materials and services acquired.
Removed
Revenue from the Company’s network marketing business increased by $124,345 or approximately 12.2%. Total revenue increased by a significant $839,602 or approximately 82.6%. The increase was predominately due to: (i) the recovery from COVID-19 in Malaysia after April 2022.
Added
Total revenue for the year ended December 31, 2023 decreased by $425,476, or approximately 22.9% from the year ended December 31, 2022. Revenue from the Company’s network marketing business decreased significantly by $741,641, or approximately 65.2%, whereas the revenue from the provision of complementary health therapies increased by $317,888, or approximately 44.4%.
Removed
The Company made progress in revenue generating as Malaysia, where the Company’s operations predominantly reside, has moved to a COVID-19 endemic phase with minimal restrictions on businesses and people movements in the country; and (ii) the Company’s operations in the provision of complementary health therapies since February 2022. 43 Cost of Revenue Cost of revenue for the year ended December 31, 2022 amounted to $666,042 as compared to $297,333 for the year ended December 31, 2021, representing a significant increase of $368,709 or approximately 124.0%.
Added
The decreased revenue from the Company’s network marketing business due to limited product range available as compared to the previous years, it limited the potential development of this revenue stream.
Removed
The decrease in gross margin was predominantly due to a lower gross margin associated with the provision of complementary health therapies as compared to the Company’s network marketing business; and promotional activities undertaken by the Company to increase revenue from its network marketing business.
Added
We did not offer as many categories of the health products in our network marketing business during fiscal year 2023 which we had during prior years as a strategical shifting of our business focus to development of new health products for both networking marketing business as well as complementary health therapies business.
Removed
The increase in G&A expenses was mainly due to G&A expenses associated with the provision of complementary health therapies. The Company’s G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses and depreciation expenses. 44 Provision for doubtful accounts Provision for doubtful accounts were $0 and $121,514 for the year ended December 31, 2022 and 2021, respectively.
Added
Existed distributors therefore may seek alternative companies in the market with a more extensive product range than the Company could offer to fulfill the needs of ultimate customers. During the year ended December 31, 2023, we launched a few new products in the market.
Removed
The provision for doubtful accounts was in respect of prepayments to a supplier. As the Company’s attempts to recover the prepayments were futile, the entire provision for doubtful accounts of $121,514 was written-off during the year ended December 31, 2022.
Added
However, the increased revenue of approximately $0.2 million from sales of these new products was less than the significant decrease of revenue related to the sales of existing products related to network marketing business.
Removed
During the year ended December 31, 2021, we had provision for income taxes of $114,862 due to certain permanent items required for the income taxes provision in Malaysia jurisdiction after our Malaysia local tax audit and had provision for income taxes of $22,205 on U.S. GILTI taxes provision.
Added
The revenue increase in provision of complementary health therapies business was due to after COVID-19 pandemic, more individual turned to complementary health therapies as preventive care and wellness to maintain good health, prevent illness and promote overall well-being, more service orders were processed during the year ended December 31, 2023 compared with previous year, also led the increase of related products sold.
Removed
In assessing our liquidity and going concern, management is projecting that the company’s revenue will revert to pre-pandemic level, generating sufficient cash therefrom to cover our operating expenses.
Added
Health and wellness service revenue from our provision of complementary health therapies business increased approximately $0.1 million and product sales revenue from our provision of complementary health therapies business increased by approximately $0.2 million compared with previous year. 34 Cost of Revenue Cost of revenue for the year ended December 31, 2023 amounted to $494,516 (approximately 34.6% of revenue) as compared to $666,042 (approximately 35.9% of revenue) for the year ended December 31, 2022, representing a decrease of $171,526, or approximately 25.8%.
Removed
If our Company is unable to generate sufficient cash flow within the normal operating cycle of a twelve-month period to pay for its future payment obligations, we may have to consider supplementing our available sources of funds through the following sources: ● other available sources of financing from Malaysia banks and other financial institutions; and ● financial support from our related parties and shareholders.
Added
The fluctuation in cost of revenue was in the same trend as decrease in revenue. Significant decreased product sales revenue in network marketing business led the decreased cost of products sold.
Removed
Based on the above initiatives, management is of the opinion that the Company shall have sufficient funds to meet its working capital requirements and debt obligations as they become due in the foreseeable future twelve months from the date of issuance of this Annual Report. However, there is no assurance that management will be successful in its plans.
Added
The proportional decrease in cost of revenue was more than the of the proportional decrease in revenue for year ended December 31, 2023 was due to that the products sold in its network marketing business during the year were mainly the existing slow moving products developed in prior years with very high gross profit margin.
Removed
Net cash used in operating activities for the year ended December 31, 2021 was $845,842 and were mainly comprised of the net loss of $2,524,680, dividend income from marketable securities of $18,939, the increase in prepayments and deposits of $128,363, and the payment of operating lease liabilities of $138,143.
Added
The gross profit margin related to our network marketing business was approximately 84.1% and 67.4% for the years ended December 31, 2023 and 2022, respectively; the gross profit margin related to our provision of complementary heath therapies business was approximately 58.5% and 59.1%, respectively.
Removed
The net cash used in operating activities was mainly offset by the non-cash depreciation and amortization expense of $77,758, amortization of operating right-of-use assets of $139,451, the unrealized holding loss on marketable securities of $505,231, the non-cash deferred tax expense of $10,127, inventories write-down of $36,241, provision for doubtful accounts of $121,514, the decrease of accounts receivables of $167,566, the decrease in inventories of $192,713, the refund in prepaid taxes of $430,062, the increase in customer deposits of $52,981, the increase in income tax payables of $3,988, and the increase in other payables and accrued liabilities of $226,651.
Added
The marginally increase in gross profit margin in year ended December 31, 2023 was mainly due to the same reason as explained in the above.
Removed
Credit Facilities We do not have any credit facilities or other access to bank credit.
Added
Although the gross profit margin related to our network marketing business was approximately 84.1% for the year ended December 31, 2023, increased from previous year, the related revenue only accounted approximately 27.7% of the total revenue for the year, decreased from approximately 61.3% for previous year. The gross profit margin for both years therefore stayed at the similar level.
Removed
In determining whether an asset is impaired, the Company has to exercise judgment and make estimation, particularly in assessing: (1) whether an event has occurred or any indicators that may affect the asset value; (2) whether the carrying value of an asset can be supported by the recoverable amount, in the case of value in use, the present value of future cash flows which are estimating the recoverable amounts including cash flow projections and an appropriate discount rate.
Added
The Company’s selling expenses typically comprise salaries and benefits expenses, credit card processing fees and promotional expenses.
Removed
Changing the assumptions and estimates, including the discount rates or the growth rate in the cash flow projections, could materially affect the net present value used in the impairment test.
Added
The significant increase in selling expenses was predominantly due to significant increase of promotional expenses which included the travelling expenses incurred for Nasdaq uplisting bell ringing ceremony as an incentive to the Company’s distributors and members for their contribution to the Company’s networking marketing business for the past years.
Removed
As of December 31, 2022 and 2021, the carrying amounts of operating right-of-use assets and property, plant and equipment is amounted to $81,133 and $142,149 (December 31, 2021: $237,718 and $215,799), respectively. No impairment losses on operating right-of-use assets and property, plant and equipment were recognized as of December 31, 2022 and 2021.
Added
The proportional decrease in commission expenses was more than the decrease in revenue was due to our multi-tiers compensation plan structure. Distributors earn commissions not only with a fixed percentage on their own sales but also depending on the sales of the new recruiting distributors as well as other factors.
Added
Distributors who reach certain levels of achievement may qualify for additional commissions. The revenue generated in the year ended December 31, 2023 were more on distributors’ own sales, not much of recruiting new distributors and the distributors did not qualify for the additional commissions due to the decrease in revenue.
Added
The salaries increased due to the Company’s operations in the provision of complementary health therapies are growing, the Company increase the employee workforce to support the growth in this division. The Company increased the director salary of this division as a reward to recognize the performance in developing such business line during the current year.
Added
In addition, foreign transaction loss decreased significantly this year as the Company mainly purchased from local suppliers settled with local currencies. (Provision for) Benefit of Income Taxes We incurred provision for income taxes of $3,575 for the year ended December 31, 2023 as compared to benefit of income taxes of $4,055 for the year ended December 31 2022.
Added
The following summarizes the key components of our cash flows for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Net cash used in operating activities $ (2,001,823 ) $ (811,683 ) Net cash used in investing activities (17,251 ) (32,119 ) Net cash (used in) / provided by financing activities 5,398,037 (234,466 ) Effect of exchange rate on cash and cash equivalents 15,067 (81,150 ) Net change in cash and cash equivalents $ 3,394,030 $ (1,159,418 ) 37 Operating activities Net cash used in operating activities for the year ended December 31, 2023 was $2,001,823 and were mainly comprised of the net loss of $2,109,935, the non-cash deferred tax benefit of $220, unrealized holding gain on marketable securities of $3,493, gain on disposal of office equipment of $1,753, the increase in inventories of $3,216, the increase in accounts receivables of $53,641, the increase in prepayments and deposits of $34,532, the decrease in other receivables of $8,961, the decrease in customer deposits of $248,299, the payment of operating lease liabilities of $147,951, the decrease of income tax payable of $10,591.
Added
The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $75,982, amortization of operating right-of-use assets of $147,212, provision for credit losses of $29,955, decrease in prepaid taxes of $305,567, increase in accounts payables (including related parties) of $38,456 and the increase in other payables (including related parties) and accrued liabilities of $6,670.
Added
Investing activities Net cash used in investing activities for the year ended December 31, 2023 was $17,251, the amount mainly resulted from the purchase property and equipment of $52,320 and proceeds from disposal of office equipment $35,069.
Added
Financing activities Net cash provided by financing activities for the year ended December 31, 2023 was $5,398,037, consisted of the proceeds from issuance of common stock for $5,501,520, cash used for shares repurchased of $93,889 and reduction of finance lease liability of $9,594.
Added
Impairment of long-lived assets Long-lived assets, including property and equipment, and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable.
Added
The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset.
Added
If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2023 and December 31, 2022, no impairment of long-lived assets was recognized.
Added
The Company based on the health screening test contracts with customers, establishes the selling price for the health screening test and place order to the health screening center. The Company obtains control of the test report before they are delivered to the customers.
Added
This ASU provides guidance in ASC Topic 842 that Leasehold improvements associated with common control leases should be (i) amortized by the lessee over the useful life of the leasehold improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset through a lease, and (ii) accounted for as a transfer between entities under common control through an adjustment to equity if and when the lessee no longer controls the use of the underlying asset.
Added
The ASU 2023-01 is effective for reporting periods beginning after December 15, 2023. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. When adopted in an interim period, it must be adopted from the beginning of the year that includes that interim period.
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The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements.
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In July 2023, the FASB issued ASU No. 2023-03 “Presentation of Financial Statements (Topic 205), Income Statement – Reporting Comprehensive Income (Topic 22), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation – Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 – General Revision of Regulation S-X: Income or Loss Applicable to Common Stock”.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. 50
Biggest changeThe Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. 42

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