Company Announcement - ATIF Holdings Limited plans to change its Nasdaq ticker symbol from "ATIF" to "ZBAI" with the announcement of the date and detailed plans expected by the end of December 2024 [1] - No actions will be required by existing shareholders regarding the ticker symbol change, and the company's Ordinary Shares will continue to be listed on Nasdaq with the CUSIP remaining unchanged [2] Company Overview - ATIF Holdings Limited is a business consulting company based in Lake Forest, specializing in IPO, M&A advisory, and post-IPO compliance services for small and medium-sized companies seeking to go public in the United States [3] - The company has a proven track record in delivering comprehensive U.S. IPO consulting services, primarily to clients in the United States and internationally [3] - ATIF aims to simplify the complex process of going public while ensuring optimal outcomes for its clients through its comprehensive consulting services [3] - The company has received the "Golden Bauhinia Award," the highest award in the financial and securities industry in Hong Kong, for being one of the "Top 10 Best Listed Companies" [3]

Revenue Performance - Total revenue decreased by approximately $1.8 million, or 75%, from approximately $2.5 million in fiscal year 2023 to approximately $0.6 million in fiscal year 2024[251] - Revenue from consulting services to third parties was approximately $0.4 million for the fiscal year ended July 31, 2024, compared to approximately $1.2 million for the fiscal year ended July 31, 2023, reflecting a decrease of approximately $0.8 million[253] - Revenues from related parties decreased by approximately $1.1 million, or 85%, from approximately $1.3 million in fiscal year 2023 to approximately $0.2 million in fiscal year 2024[250] Expenses - Selling expenses increased by approximately $0.1 million, or 61%, from approximately $0.2 million in fiscal year 2023 to approximately $0.3 million in fiscal year 2024[256] - General and administrative expenses remained stable at approximately $2.3 million and $2.2 million for the fiscal years ended July 31, 2024 and 2023, respectively[258] - Loss from operations increased by approximately $1.2 million, or 158%, from approximately $0.8 million in fiscal year 2023 to approximately $2.0 million in fiscal year 2024[252] Net Loss - Net loss for the fiscal year ended July 31, 2024, was approximately $3.2 million, an increase of $0.3 million from a net loss of approximately $2.9 million in fiscal year 2023[265] - For the fiscal year ended July 31, 2024, the company reported a net loss of approximately $3.2 million, compared to a net loss of $2.9 million for the fiscal year ended July 31, 2023[268] Cash Flow and Liquidity - The company had cash of $1.2 million and current liabilities of $1.0 million as of July 31, 2024, indicating that cash on hand could cover current liabilities[269] - Net cash used in operating activities was approximately $0.1 million for the fiscal year ended July 31, 2024, a significant improvement from $2.3 million in the previous fiscal year[274][275] - Net cash used in investing activities was approximately $1.6 million in fiscal year 2024, primarily due to loans made to a related party and investments in trading securities[276] - Net cash provided by financing activities was approximately $2.3 million in fiscal year 2024, resulting from the issuance of ordinary shares through a private placement[278] - The company reported a net increase in cash of $643,354 for the fiscal year ended July 31, 2024, compared to a net decrease of $1,144,115 in the previous year[272] - The company had a short-term investment in trading securities of $0.4 million and accounts receivable of $0.2 million due from a related party, which were highly liquid[269] Future Outlook - The company plans to expand operations to other Asian countries, such as Malaysia, Vietnam, and Singapore, while continuing to focus on the North American market[239] - The company has successfully helped nine Chinese enterprises to be quoted on the U.S. OTC markets since its inception[239] - The company’s ability to continue as a going concern is dependent on management's ability to execute its business plan, which includes increasing revenue and controlling operating costs[269] - The company monitors its cash flow and operating expenses to assess its ability to continue as a going concern, indicating substantial doubt about its future viability[268] Dividends - The company has not declared or paid any cash dividends to shareholders and does not plan to do so from its restricted net assets as of July 31, 2024[271]

Core Insights - ATIF Holdings Limited has entered into a listing advisory services agreement with two U.S.-based technology companies, expecting to receive 2% equity in shares from each as a service fee [1] - The company will provide IPO advisory services and lead the IPO process, engaging third parties for various services including audit, valuation, and investor relations [1] Company Overview - ATIF Holdings Limited is a business consulting company based in Lake Forest, specializing in IPO, M&A advisory, and post-IPO compliance services for small and medium-sized companies aiming to go public in the U.S. [3] - The company has a proven track record in delivering comprehensive U.S. IPO consulting services, primarily to clients in the U.S. but also internationally [3] - ATIF aims to simplify the complex process of going public while ensuring optimal outcomes for its clients through its comprehensive consulting services [3] - The company has received the "Golden Bauhinia Award," recognizing it as one of the "Top 10 Best Listed Companies" in the financial and securities industry in Hong Kong [3]

Financial Performance - Revenues for the three months ended April 30, 2024, were $350,000, a significant increase from $200,000 in the same period of 2023, marking a 75% growth[14] - Net loss for the three months ended April 30, 2024, was $(807,588), compared to a net loss of $(335,770) for the same period in 2023, indicating a decline in profitability[14] - For the nine months ended April 30, 2024, the company reported a net loss of approximately $1.8 million compared to a net income of approximately $0.4 million for the same period in 2023[28] - The company reported a basic and diluted loss per share of $(0.08) for the three months ended April 30, 2024, compared to $(0.03) for the same period in 2023[14] Assets and Liabilities - Total current assets increased to $3,189,487 as of April 30, 2024, compared to $2,542,780 as of July 31, 2023, representing a growth of approximately 25.5%[12] - Total liabilities decreased to $228,860 as of April 30, 2024, from $2,229,217 as of July 31, 2023, reflecting a reduction of approximately 89.8%[12] - Cash and cash equivalents rose to $2,116,156 as of April 30, 2024, up from $606,022 as of July 31, 2023, showing an increase of about 249.5%[12] - As of April 30, 2024, the company had cash of approximately $2.1 million and current liabilities of approximately $0.2 million, indicating that current assets could cover current liabilities[29] Operating Expenses - Operating expenses for the three months ended April 30, 2024, totaled $(721,282), compared to $(701,934) for the same period in 2023, representing an increase of approximately 2.8%[14] - The company experienced operating cash outflows of $84,188 for the nine months ended April 30, 2024, compared to approximately $1.4 million for the same period in 2023[28] - The company reported a net cash used in operating activities of $84,188 for the nine months ended April 30, 2024, a significant improvement from $1,361,108 in the same period of 2023[20] Equity and Share Issuance - Total stockholders' equity increased to $3,104,589 as of April 30, 2024, from $1,539,353 as of July 31, 2023, reflecting a growth of approximately 102.5%[12] - The company issued 1,905,522 ordinary shares during the period to settle payroll payable, contributing to the increase in total shares outstanding[16] - The company issued 384,478 ordinary shares to settle accrued payroll expenses of $349,875, with a fair value of $0.91 per share on April 30, 2024[83] Tax and Legal Matters - For the nine months ended April 30, 2024, the Company did not incur income tax expenses, compared to $575,056 in income tax expenses for the same period in 2023[97] - The Company has established a 100% valuation allowance against deferred tax assets due to uncertainty in their realization[99] - The Company is involved in a legal proceeding with Boustead Securities, LLC, which alleges breach of contract and seeks compensation related to a transaction with LGC[105] - J.P Morgan Securities LLC has filed a lawsuit against the Company claiming $5,064,160 in damages related to a stock transaction[110] Customer Concentration - For the three months ended April 30, 2024, one customer accounted for 100% of the Company's consolidated revenue, while for the nine months, two customers accounted for 71% and 17% of the revenue, respectively[60] - The Company’s revenue is primarily generated from consulting services related to going public, with significant reliance on a few customers[61] Future Outlook and Risks - The company anticipates future performance will be subject to various risks and uncertainties, which may impact actual results compared to forward-looking statements[8] - The company anticipates needing to raise additional capital to fund its operations, indicating uncertainty about its ability to continue as a going concern[30]

Company Overview - Armlogi Holding Corp. is a California-based provider of warehousing and logistics services, focusing on supply chain solutions related to warehouse management and order fulfillment [3] - The company operates 10 warehouses covering approximately 1,800,000 square feet, offering comprehensive one-stop warehousing and logistics services, particularly for cross-border e-commerce merchants [3] IPO Details - Armlogi is conducting an initial public offering (IPO) of 1,600,000 shares at an open offer price of $5.00 per share, aiming to raise $8,000,000 [1] - The IPO is expected to close on or about May 15, 2024, and marks the company's official trading debut on the NASDAQ [1] Leadership Insights - Jun Liu, President and CEO of ATIF, expressed excitement about Armlogi's Nasdaq listing, highlighting it as a recognition of the company's past achievements and a new starting point for future growth [2]

Financial Performance - Revenues for January 2024 were $150,000, compared to $1,900,000 in January 2023, representing a decrease of about 92.1%[14] - Net loss for January 2024 was $407,638, compared to a net income of $810,981 in January 2023, indicating a significant turnaround in performance[14] - For the six months ended January 31, 2024, the company reported a net loss of approximately $1.0 million, compared to a net income of approximately $0.7 million for the same period in 2023[27] - The company reported a net loss of $1,033,101 for the three months ended January 31, 2024, compared to a net income of $698,466 for the same period in 2023[18] - The company anticipates needing to raise additional capital immediately to continue funding its operations due to ongoing losses and working capital deficit[29] Assets and Liabilities - Total current assets decreased from $2,542,780 to $1,619,991, a decline of approximately 36.3%[12] - Total liabilities decreased from $2,229,217 to $1,982,467, a reduction of approximately 11.1%[12] - Cash and cash equivalents dropped from $606,022 to $139,152, a decline of approximately 77%[12] - Total equity decreased from $1,539,353 to $506,252, a decline of approximately 67%[12] - As of January 31, 2024, the company had cash of approximately $0.1 million and current liabilities of approximately $1.5 million, with about $0.7 million due to related parties[28] Operating Expenses - Operating expenses increased to $1,354,295 in January 2024 from $1,134,008 in January 2023, an increase of about 19.4%[14] - The company experienced a net cash used in operating activities of $17,413 for the six months ended January 31, 2024, compared to approximately $0.8 million for the same period in 2023[27] - The company reported depreciation and amortization expenses of $59,338 for the three months ended January 31, 2024[18] - Rent expense for the three months ended January 31, 2024, was $120,692, a slight decrease from $130,169 for the same period in 2023[70] Revenue Recognition and Customer Concentration - The Company recognizes revenue from consulting services ratably over the estimated completion period for Phase I and Phase II services, while Phase III revenue is recognized upon completion of the transaction[51] - For the three months ended January 31, 2024, one customer accounted for 100% of the Company's consolidated revenue, while for the same period in 2023, three customers accounted for 34%, 34%, and 32% of the revenue[59] - For the six months ended January 31, 2024, four customers accounted for 40%, 33%, 17%, and 10% of the Company's consolidated revenue, compared to 30%, 30%, 27%, and 14% for the same period in 2023[59] - The Company plans to transition its consulting services from PRC-based customers to more international customers to mitigate concentration risk[60] Tax and Deferred Tax Assets - The Company has established a 100% valuation allowance against deferred tax assets due to uncertainty in realization, primarily from net operating losses (NOL) as of January 31, 2024[95] - The Company follows ASC 740 for income taxes, recognizing deferred tax assets and liabilities based on enacted tax laws and statutory tax rates[94] - The Company periodically evaluates the likelihood of realization of deferred tax assets based on factors such as cumulative earnings experience and future income expectations[95] - The Company has not recognized any uncertain tax positions or liabilities as of January 31, 2024, and all income tax returns for the years ended December 31, 2019, through December 31, 2023, remain open for examination[55] Legal Proceedings - The Company is involved in a pending legal proceeding with Boustead Securities, LLC, regarding a breach of contract claim related to a 51.2% equity interest acquisition in LGC[100] - Boustead's lawsuit seeks recovery of an amount equal to a percentage of the value of the transaction conducted with LGC, alleging breach of contract and other claims[100] - The Company is also facing a lawsuit from J.P. Morgan Securities LLC, claiming $5,064,160 in damages related to a stock transaction by ATIF-1 GP, LLC[106] - Management believes the Company will not be liable for the claim from J.P. Morgan Securities LLC, as it sold ATIF-1 GP, LLC in August 2022[106] - Mediation for the dispute with J.P. Morgan Securities LLC is scheduled for May 6, 2024[106] Other Financial Metrics - The accumulated deficit increased from $(27,666,624) to $(28,699,725), reflecting a worsening financial position[12] - The company had accounts receivable of approximately $0.5 million and short-term investments of approximately $0.5 million as of January 31, 2024[28] - The total prepaid expenses and other current assets decreased from $429,570 as of July 31, 2023, to $300,724 as of January 31, 2024[63] - The total operating lease liabilities decreased to $818,107 as of January 31, 2024, from $1,104,909 as of July 31, 2023[73] - Accrued payroll expenses increased to $361,699 as of January 31, 2024, compared to $212,953 as of July 31, 2023[79]

Financial Performance - Revenues for the three months ended October 31, 2023, were $125,000, a decrease of 58.33% compared to $300,000 in the same period of 2022[12] - Total operating expenses for the same period were $781,779, an increase of 37.5% from $567,896 in the prior year[12] - Loss from operations was $(656,779), compared to a loss of $(267,896) in the same quarter of 2022, reflecting a significant increase in operational losses[12] - Net loss for the period was $(625,463), compared to $(112,515) in the same period last year, indicating a substantial decline in profitability[12] - Basic and diluted loss per share for the three months ended October 31, 2023, was $(0.06), compared to $(0.01) for the same period in 2022[12] - For the three months ended October 31, 2023, the company reported a net loss of approximately $0.6 million, compared to a net loss of $0.1 million for the same period in 2022[26] Assets and Liabilities - Total current assets decreased to $1,953,257 as of October 31, 2023, from $2,542,780 as of July 31, 2023, representing a decline of approximately 23.2%[10] - Total liabilities decreased slightly to $2,126,704 as of October 31, 2023, from $2,229,217 as of July 31, 2023[10] - Cash and cash equivalents were reported at $361,225 as of October 31, 2023, down from $606,022 as of July 31, 2023[10] - The accumulated deficit increased to $(28,292,087) as of October 31, 2023, compared to $(27,666,624) as of July 31, 2023[10] - Total assets decreased to $3,040,594 as of October 31, 2023, from $3,768,570 as of July 31, 2023, indicating a decline of approximately 19.4%[10] Cash Flow - Operating cash inflows for the three months ended October 31, 2023, were approximately $0.2 million, down from $0.4 million in the prior year[26] - The net cash provided by operating activities for the period was $195,353, a decrease from $363,709 in the previous year[1] - The net cash used in investing activities was $440,150, compared to $242,837 in the prior year[1] - The company experienced a net decrease in cash of $244,797, contrasting with an increase of $120,872 in the previous year[1] Operational Insights - The company operates in one reporting segment, focusing solely on consulting services as of October 31, 2023[51] - For the three months ended October 31, 2023, the company generated revenues primarily from consulting services related to going public, with significant customer concentration where three customers accounted for 48%, 40%, and 12% of consolidated revenue[52] - The company has not shifted the nature of its operations despite the sale of its equity interest in ATIF GP for $50,000[22] Expenses and Provisions - Rent expense for the three months ended October 31, 2023, was $125,679, slightly increasing from $120,692 in the same period of 2022[64] - The company recorded an expected credit loss allowance of $26,400 for the period[1] - The company provided a full provision of $762,000 against accounts receivable due from Huaya due to remote collection prospects[81] - Amortization expense for intangible assets remained constant at $20,000 for both the three months ended October 31, 2023, and 2022[60] Receivables and Payables - As of October 31, 2023, accounts receivable from Asia International Securities Exchange Co., Ltd. remained at $600,000, unchanged from July 31, 2023[80] - Other receivables from Huaya decreased to $20,539 as of October 31, 2023, down from $40,539 as of July 31, 2023[80] - Other payables to Asia International Securities Exchange Co., Ltd. decreased slightly to $712,258 as of October 31, 2023, from $729,968 as of July 31, 2023[82] Taxation and Valuation - The company did not incur income tax expenses for the three months ended October 31, 2023, and 2022, due to net operating losses[86] - Management believes that the realization of deferred tax assets appears uncertain, leading to a 100% valuation allowance against these assets[88]

Revenue and Profitability - Total revenue increased by $0.8 million, or 47%, from $1.7 million in fiscal year 2022 to $2.5 million in fiscal year 2023[196] - Revenue from related parties rose by $0.5 million, attributed to providing consulting services to more customers on behalf of related parties[203] - Gross profit for fiscal year 2023 was $2.45 million, a 143% increase from $1.01 million in fiscal year 2022[201] Expenses - Selling expenses decreased by $0.4 million, or 64%, from $0.6 million in fiscal year 2022 to $0.2 million in fiscal year 2023[204] - General and administrative expenses decreased by $0.4 million, or 15%, from $2.7 million in fiscal year 2022 to $2.2 million in fiscal year 2023[205] Loss and Provisions - The company provided a full provision of $2,654,767 against balances due from buyers of LGC, assessing it as remote to collect[206] - The company provided a full provision of $762,000 against accounts receivable due from a related party, Huaya, also deemed remote to collect[206] - Loss from operations improved to $(760,864) in fiscal year 2023 from $(2,213,580) in fiscal year 2022, a decrease of 66%[201] - Net loss for fiscal year 2023 was $(2,882,299), a 14% improvement compared to $(3,371,099) in fiscal year 2022[201] - For the year ended July 31, 2023, the company reported a net loss of $2.9 million, a decrease of $0.5 million from a net loss of $3.4 million in fiscal year 2022[212] Cash Flow and Investments - Net cash used in operating activities was $2.3 million for the year ended July 31, 2023, primarily due to a net loss of $2.9 million[220] - The company reported net cash provided by investing activities of $0.4 million for fiscal year 2023, compared to a net cash used of $1.6 million in fiscal year 2022[222] - Net cash provided by financing activities was $0.7 million in fiscal year 2023, sourced from borrowings from a related party[224] - The company recorded an investment gain of $0.2 million in trading securities for the year ended July 31, 2023, compared to a loss of $2.4 million in the previous year[207] Assets and Liabilities - As of July 31, 2023, the company had cash of $0.6 million and accounts receivable of $0.6 million due from a related party, with current liabilities totaling $1.5 million[215] Future Operations and Taxation - The company plans to expand operations to other Asian countries while continuing to focus on the North American market[194] - The company is subject to a federal tax rate of 21% and a state tax rate of 8.84% for its U.S. subsidiaries, with an income tax expense of $31,200 for the year ended July 31, 2023[211] - The company may need to raise cash flow from related parties to support future operations, indicating uncertainty about its ability to continue as a going concern[215] Dividends - The company has not declared or paid any cash dividends to shareholders and does not plan to do so from restricted net assets as of July 31, 2023[216]

Financial Performance - Revenues for the three months ended April 30, 2023, were $100,000, compared to $261,925 for the same period in 2022, indicating a decline of approximately 61.8%[13] - Net loss attributable to ATIF Holdings Limited for the three months ended April 30, 2023, was $(335,770), compared to a net income of $228,316 for the same period in 2022[13] - Total operating expenses for the three months ended April 30, 2023, were $(701,934), an increase from $(598,620) in the same period of 2022, reflecting a rise of approximately 17.2%[13] - The company reported a loss per share of $(0.03) for the three months ended April 30, 2023, compared to earnings per share of $0.02 for the same period in 2022[13] - The company had total other income of $274,263 for the three months ended April 30, 2023, compared to $597,456 for the same period in 2022, a decrease of approximately 54.1%[13] - For the nine months ended April 30, 2023, the company reported a net income of $362,696 compared to a net loss of $1,992,933 for the same period in 2022[21] Assets and Liabilities - Total current assets increased to $6,672,023, up from $5,992,460, representing a growth of approximately 11.3%[11] - Cash and cash equivalents stood at $467,586, compared to $1,750,137, showing a significant decrease of approximately 73.3%[11] - Total liabilities decreased to $3,383,237 from $3,784,348, a reduction of approximately 10.6%[11] - Total assets increased marginally to $8,167,585 from $8,136,955, reflecting a growth of approximately 0.4%[11] - The accumulated deficit as of April 30, 2023, was $(24,777,541), slightly improved from $(25,140,237) as of April 30, 2022[11] - Current liabilities stood at $2.6 million as of April 30, 2023, while the company expects to collect consulting service fees of $3.3 million over the next 12 months[29] Cash Flow and Financing - The company had cash of $467,586 as of April 30, 2023, down from $1,306,038 at the end of April 2022[21] - The company reported operating cash outflows of $1.4 million for the nine months ended April 30, 2023, compared to $0.3 million for the same period in 2022[28] - The management believes that the company will continue as a going concern for the next 12 months despite uncertainties in cash flow and customer payments[29] - The company intends to finance future working capital and capital expenditures from cash generated from operating activities and equity financings[30] Revenue Sources - Revenue from consulting services for the three months ended April 30, 2023, was $0.1 million, compared to $0.3 million for the same period in 2022, representing a decline of 66.67%[50] - Revenue from consulting services for the nine months ended April 30, 2023, was $2.3 million, an increase of 187.5% compared to $0.8 million for the same period in 2022[50] - For the three months ended April 30, 2023, one customer accounted for 100% of the Company's consolidated revenue, compared to 97% for the same period in 2022[62] - For the nine months ended April 30, 2023, four customers accounted for 28%, 28%, 26%, and 17% of the Company's consolidated revenue, while two customers accounted for 63% and 32% in the same period of 2022[62] Expenses and Depreciation - The company had a depreciation and amortization expense of $109,967 for the three months ended April 30, 2023[21] - Depreciation expense for the three months ended April 30, 2023, was $16,656, compared to $13,765 for the same period in 2022[72] - Amortization expense for the three months ended April 30, 2023, was $20,000, consistent with the same period in 2022[74] - Operating lease expenses for the three months ended April 30, 2023, were $121,655, compared to $101,580 for the same period in 2022[86] Legal Matters - On August 25, 2021, the United States District Court granted ATIF's motion to dismiss Boustead's first amended complaint, allowing Boustead to amend its claims for breach of contract only[116] - Boustead filed a second amended complaint on December 28, 2021, alleging only breach of contract and dropping all other claims[116] - On July 6, 2022, the Court denied ATIF's motion to dismiss the second amended complaint, and ATIF subsequently filed a motion to compel arbitration on August 3, 2022[117] - The Court has not yet ruled on ATIF's motion to compel arbitration or Boustead's request for a default judgment against LGC[117] - ATIF's management believes it is premature to assess the outcome of the ongoing Boustead litigation, which is currently in the pleadings stage[117]

PART I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended January 31, 2023, reflect significant revenue growth, a shift to net income, a slight increase in total assets to $8.43 million, a decrease in total liabilities to $3.31 million, and a net cash outflow from operating activities [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show an increase in total assets and stockholders' equity, alongside a decrease in total liabilities, with a notable reduction in cash and cash equivalents Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Items | Jan 31, 2023 ($) | July 31, 2022 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 6,793,260 | 5,992,460 | | **Total Assets** | 8,434,866 | 8,136,955 | | **Total Current Liabilities** | 2,488,678 | 2,799,099 | | **Total Liabilities** | 3,314,748 | 3,784,348 | | **Total Stockholders' Equity** | 5,120,118 | 4,721,652 | - Cash and cash equivalents decreased from **$1.75 million** on July 31, 2022, to **$0.83 million** on January 31, 2023[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The statements show a dramatic increase in revenues and a significant shift from net loss to net income for both the three and six-month periods ended January 31, 2023 Three Months Ended January 31, Performance (Unaudited) | Metric | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Revenues** | 1,900,000 | 7,680 | | **Income (Loss) from Operations** | 1,333,888 | (819,420) | | **Net Income (Loss)** | 810,981 | (1,354,169) | | **(Earnings) Loss Per Share** | 0.08 | (0.11) | Six Months Ended January 31, Performance (Unaudited) | Metric | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Revenues** | 2,200,000 | 524,155 | | **Income (Loss) from Operations** | 1,065,992 | (1,406,213) | | **Net Income (Loss)** | 698,466 | (2,253,694) | | **(Earnings) Loss Per Share** | 0.07 | (0.23) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statements indicate a net cash outflow from operating activities for the six months ended January 31, 2023, a reversal from the prior year's inflow, leading to a net decrease in cash Cash Flow Summary for Six Months Ended January 31 (Unaudited) | Cash Flow Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Net Cash (Used in) Provided by Operating Activities** | (754,714) | 328,160 | | **Net Cash Used in Investing Activities** | (166,036) | (2,094,308) | | **Net Cash Used in Financing Activities** | 0 | (39,642) | | **Net Decrease in Cash** | (920,750) | (1,877,462) | | **Cash, End of Period** | 829,387 | 3,719,278 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant events such as the sale of ATIF GP, ongoing liquidity concerns, revenue recognition policies, customer concentration, divestment of long-term investments, and pending legal proceedings - On August 1, 2022, the Company sold its entire equity interest in ATIF GP for **$50,000**, resulting in ATIF GP no longer being a subsidiary[31](index=31&type=chunk)[42](index=42&type=chunk) - The company faces liquidity concerns, with **$0.8 million** in cash against **$2.5 million** in current liabilities as of January 31, 2023; management believes it can continue as a going concern, expecting to collect **$2.4 million** in consulting fees over the next 12 months, though COVID-19 impacts could cause delays[35](index=35&type=chunk) - Revenue from consulting services is recognized ratably over the estimated completion period for Phase I and II, and upon completion for Phase III (reverse merger or IPO transaction)[54](index=54&type=chunk) - For the six months ended January 31, 2023, four customers accounted for **30%**, **30%**, **27%**, and **14%** of consolidated revenue, indicating significant customer concentration[69](index=69&type=chunk) - During the six months ended January 31, 2023, the Company sold its long-term investments in Solarever and Armstrong at cost to focus on its core financial consulting services[88](index=88&type=chunk)[92](index=92&type=chunk) - The company is involved in a pending legal proceeding with Boustead Securities, LLC, which alleges breach of contract related to an acquisition; the outcome is currently premature to predict[119](index=119&type=chunk)[120](index=120&type=chunk)[123](index=123&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) Management attributes significant revenue growth to expanded consulting services for more customers, particularly in North America following a strategic shift from China, resulting in a net income turnaround for both three and six-month periods ended January 31, 2023, despite ongoing liquidity concerns from operating cash outflows [Business Overview](index=28&type=section&id=Business%20Overview) The company provides financial consulting services to SMEs, shifting its strategic focus from China to North America to assist companies in going public on U.S. capital markets, and now operates as a single reporting segment - The company provides financial consulting services to small and medium-sized enterprises (SMEs) in Asia and North America, focusing on helping them go public[125](index=125&type=chunk) - In May 2022, the company shifted its geographic focus from China to North America to assist mid and small companies in becoming public on U.S. capital markets[130](index=130&type=chunk) - On August 1, 2022, the company sold its equity interest in ATIF GP, ceasing to be the investment manager of ATIF LP; as of January 31, 2023, the company operates as a single reporting segment: financial consulting services[128](index=128&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) The company experienced substantial revenue growth and a significant reduction in operating expenses, leading to a turnaround from net loss to net income for both the three and six-month periods ended January 31, 2023 Comparison of Operations for the Three Months Ended January 31 | Metric | 2023 ($) | 2022 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | 1,900,000 | 7,680 | 24,640% | | **Total Operating Expenses** | (566,112) | (827,100) | (32)% | | **Net Income (Loss)** | 810,981 | (1,354,169) | (160)% | Comparison of Operations for the Six Months Ended January 31 | Metric | 2023 ($) | 2022 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | 2,200,000 | 524,155 | 320% | | **Total Operating Expenses** | (1,134,008) | (1,930,368) | (41)% | | **Net Income (Loss)** | 698,466 | (2,253,694) | (131)% | - The substantial increase in revenue for the three and six-month periods is attributed to providing consulting services to four customers in the current period versus only one in the prior-year period[140](index=140&type=chunk)[148](index=148&type=chunk) - General and administrative expenses decreased by **37%** for both the three and six-month periods, mainly due to the disposal of ATIF HK and termination of the Qianhai VIE Agreement[142](index=142&type=chunk)[150](index=150&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces liquidity concerns with low cash reserves relative to current liabilities, experiencing net cash outflows from operating activities primarily due to increased accounts receivable, despite management's expectation of future fee collections - As of January 31, 2023, the company had **$0.8 million** in cash and **$2.5 million** in current liabilities, raising going concern considerations; management expects to collect **$2.4 million** in service fees over the next 12 months to support operations[163](index=163&type=chunk) Cash Flow Summary for Six Months Ended January 31 | Cash Flow Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Operating Activities** | (754,714) | 328,160 | | **Investing Activities** | (166,036) | (2,094,308) | | **Financing Activities** | 0 | (39,642) | - Net cash used in operating activities was **$0.8 million** for the six months ended Jan 31, 2023, primarily due to a **$1.7 million** increase in accounts receivable, a significant shift from the **$0.3 million** provided by operations in the prior year period[168](index=168&type=chunk)[169](index=169&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company, as a smaller reporting company, is not required to provide information for this item - As a smaller reporting company, ATIF Holdings Limited is not required to provide quantitative and qualitative disclosures about market risk[175](index=175&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of January 31, 2023, due to four identified material weaknesses in internal control over financial reporting, for which remediation measures are currently being implemented - Management concluded that disclosure controls and procedures were not effective as of January 31, 2023[176](index=176&type=chunk) - Four material weaknesses in internal control over financial reporting were identified[177](index=177&type=chunk)[178](index=178&type=chunk) - 1. Insufficient personnel with U.S. GAAP knowledge to handle complex accounting issues[178](index=178&type=chunk) - 2. Lack of an internal control department and adequate internal audit function[178](index=178&type=chunk) - 3. Insufficient risk assessment in accordance with the COSO 2013 Framework[178](index=178&type=chunk) - 4. Lack of sufficient documented financial closing policies and procedures[178](index=178&type=chunk) - Remediation efforts include hiring more qualified accounting personnel, implementing training programs, and establishing an internal audit function[180](index=180&type=chunk)[181](index=181&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a lawsuit filed by Boustead Securities, LLC, alleging breach of contract related to the acquisition of LGC, with the outcome currently premature to predict - Boustead Securities, LLC filed a lawsuit against the Company and LGC on May 14, 2020, alleging breach of contract and other claims related to the Company's acquisition of a **51.2%** equity interest in LGC[184](index=184&type=chunk)[185](index=185&type=chunk) - After several motions and amended complaints, the court denied the Company's motion to dismiss the second amended complaint on July 6, 2022; the Company has since filed a motion to compel arbitration[188](index=188&type=chunk) - Management considers it premature to assess and predict the outcome of this pending litigation[188](index=188&type=chunk) [Other Items](index=40&type=section&id=Other%20Items) As a smaller reporting company, the company is not required to provide information for Item 1A (Risk Factors), and Items 2, 3, 4, and 5 are all deemed not applicable - Item 1A (Risk Factors): Not required as the company is a smaller reporting company[190](index=190&type=chunk) - Items 2, 3, 4, and 5 are marked as 'Not applicable'[190](index=190&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer[191](index=191&type=chunk) - XBRL instance documents and related taxonomy files are filed as exhibits[191](index=191&type=chunk)