Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 for the same period in 2024[126] - Loss before income taxes for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.0 million, or 110%, from $1.8 million for the same period in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 for the same period in 2024[130] - The Company incurred rent expenses of $12,000 for the nine months ended April 30, 2025, compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to a loss of $338,255 for the same period in 2024, reflecting a significant increase in losses[20] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 for the three months ended April 30, 2024, to $1,400,028 for the same period in 2025[123] Customer Concentration - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - As of April 30, 2025, one customer accounted for 100% of the Company's consolidated accounts receivable[61] Future Plans and Strategic Direction - The Company plans to transition its consulting services from PRC-based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company aims to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, while maintaining a focus on the North American market[111] Legal and Regulatory Matters - The company is facing substantial doubt about its ability to continue as a going concern due to a history of net losses and the need for additional capital[137] - A lawsuit filed by J.P. Morgan Securities LLC claims damages of $5,064,160 related to a stock transaction, with ongoing mediation efforts[103][104] - The parties involved in a dispute have agreed to mediate before litigation, with mediation held on May 6, 2024, but no resolution was reached[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Accounting and Compliance - The company is in the process of evaluating the impact of recent accounting standards updates on its consolidated financial statements[64][65][66][67] - The company is currently evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and establishing an internal audit function[152] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93]

Core Insights - ATIF Holdings Limited is expanding into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC through direct purchases and mining operations [1][3] - The company has chosen West Texas for its mining operations due to favorable regulatory conditions, affordable land, and competitive electricity costs [1][2] - The CEO emphasized Bitcoin as a long-term store of value and a strategic asset for growth, highlighting the importance of energy efficiency and sustainable operations in their mining facilities [2] Company Strategy - The company plans to implement a hybrid approach that includes both direct acquisition of BTC in the open market and the establishment of proprietary mining facilities [1][6] - ATIF Holdings aims to optimize cost control and scalability by focusing on energy-efficient mining operations [2] Industry Context - The move into Bitcoin mining represents a significant evolution in ATIF Holdings' business model, showcasing its commitment to innovation and long-term value creation in emerging technologies [3] - The broader industry trend is towards responsible and forward-looking crypto infrastructure development, which aligns with the company's planned operations [2]

Financial Performance - Revenues for the three months ended January 31, 2025, were $200,000, a significant increase from $25,000 for the same period in 2024, marking an increase of 700%[20] - For the six months ended January 31, 2025, total revenue from consulting services remained at approximately $0.2 million, consistent with the same period in 2024[107] - Total revenue increased by approximately $0.2 million, or 700%, from $25,000 for the three months ended January 31, 2024, to $200,000 for the three months ended January 31, 2025[112] - For the six months ended January 31, 2025, total revenue increased by $50,000, or 33%, from approximately $0.15 million for the six months ended January 31, 2024, to approximately $0.2 million[122] - The company reported a loss per share of $0.16 for the three months ended January 31, 2025, compared to a loss per share of $0.04 for the same period in 2024[20] - Net loss for the six months ended January 31, 2025, was approximately $2.3 million, an increase of loss of approximately $1.3 million from net loss of $1.0 million for the six months ended January 31, 2024[128] - Net loss was approximately $1.9 million for the three months ended January 31, 2025, an increase of loss of approximately $1.5 million from net loss of $0.4 million for the three months ended January 31, 2024[119] Assets and Liabilities - Total current assets increased to $8,640,046 as of January 31, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 197%[19] - Total liabilities decreased to $770,928 as of January 31, 2025, from $1,258,834 as of July 31, 2024, a reduction of 39%[19] - Cash and cash equivalents rose to $5,269,690 as of January 31, 2025, compared to $1,249,376 as of July 31, 2024, reflecting a growth of 320%[19] - As of January 31, 2025, the company had cash of approximately $5.3 million and short-term investments of approximately $2.8 million, which are sufficient to cover current liabilities of approximately $0.8 million[34] - Cash at the end of the period was approximately $5.3 million, with current liabilities of approximately $0.8 million, indicating sufficient liquidity to cover current obligations[132] Shareholder Activity - The company issued 3,820,000 ordinary shares, increasing total shares outstanding to 15,737,452 as of January 31, 2025, up from 11,917,452 as of July 31, 2024[23] - The company issued 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, resulting in gross proceeds of $4.8 million[33] - In January 2025, the company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share for gross proceeds of $4.8 million[131] - The Company has 100,000,000,000 authorized ordinary shares, with 15,737,452 shares issued and outstanding as of January 15, 2025[75] Operating Expenses - Operating expenses for the six months ended January 31, 2025, totaled $1,071,906, down from $1,354,295 for the same period in 2024, a decrease of 21%[20] - Selling expenses decreased by $45,000, or 48%, from $93,000 for the three months ended January 31, 2024, to $48,000 for the three months ended January 31, 2025[114] - General and administrative expenses increased by $23,281, or 5%, from approximately $0.5 million for the three months ended January 31, 2024, to approximately $0.5 million for the three months ended January 31, 2025[115] Cash Flow - The company experienced a net cash used in operating activities of $1,195,753 for the six months ended January 31, 2025, compared to $17,412 for the same period in 2024[25] - Net cash used in operating activities was approximately $1.2 million for the six months ended January 31, 2025, primarily due to a net loss of approximately $2.3 million[135] Legal Matters - A settlement agreement with Boustead Securities, LLC was reached, requiring the Company to pay a total of $1,000,000 in three installments, with the first installment of $250,000 due upon execution of the agreement[95] - The Company is currently facing a lawsuit from J.P. Morgan Securities LLC, claiming $5,064,160 in damages related to a stock transaction[96] - The company is currently involved in a lawsuit filed by J.P Morgan Securities LLC, claiming $5,064,160 in damages related to a stock transaction[155] - The company has agreed to mediate the dispute with J.P Morgan Securities LLC before proceeding to litigation, with mediation held on May 6, 2024[156] - The company is in the process of evaluating claims and defenses related to the lawsuit from J.P. Morgan Securities LLC[97] - The company acquired a 51.2% equity interest in Leaping Group Co., Ltd. (LGC) in April 2020, which led to a lawsuit from Boustead alleging breach of contract related to the acquisition[148] - Boustead's lawsuit seeks to recover an amount equal to a percentage of the value of the transaction conducted with LGC, claiming it was deprived of compensation due to the acquisition occurring during a lockup period[149] - The company is currently preparing for arbitration regarding the claims made by Boustead, with a hearing scheduled for February 29, 2024[153] Risk Management - The company plans to mitigate risks by transitioning its consulting services from PRC-based customers to more international customers[60] - For the three and six months ended January 31, 2025, one customer accounted for 100% of the company's consolidated revenue, highlighting a concentration risk[58] - The Company has a 100% valuation allowance against deferred tax assets due to uncertainty in realization[86] - The Company is evaluating the impact of ASU 2023-09 on its consolidated financial statements, which relates to income tax disclosures[62] - The Company is evaluating the impact of ASU 2023-06 on its consolidated financial statements, which includes amendments to various disclosure requirements[63] Internal Controls - The company has concluded that its disclosure controls and procedures were not effective as of January 31, 2025, due to insufficient qualified accounting personnel and lack of documented financial closing procedures[143] - The company is in the process of evaluating steps to remediate the ineffectiveness of its disclosure controls, including hiring qualified accounting personnel and implementing training programs[143] - The company has not reported any changes in internal controls over financial reporting that materially affected its operations during the three months ended January 31, 2025[144] - The company has not disclosed any critical accounting policies and estimates that affect the preparation of its financial statements[141] Business Strategy - The Company has shifted its geographic focus from China to North America, emphasizing assistance to mid and small companies in becoming public on U.S. capital markets[105] - The Company has established a new office in California and launched additional service models including asset management and media services[104] - 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[105] - The Company has successfully assisted nine Chinese enterprises to be quoted on the U.S. OTC markets since its inception[105]

Financial Performance - For the three months ended October 31, 2024, the company reported no revenues compared to $125,000 in the same period of 2023, indicating a significant decline [20]. - The net loss for the three months ended October 31, 2024, was $367,074, compared to a net loss of $625,463 for the same period in 2023, representing a reduction of about 41% [20]. - Total revenue for the three months ended October 31, 2024, was $nil, a decrease of approximately $0.1 million or 100% compared to $0.1 million for the same period in 2023 [102][103][110]. - Net loss for the three months ended October 31, 2024, was approximately $0.4 million, a decrease of approximately $0.2 million from a net loss of $0.6 million for the same period in 2023 [116]. - The company provided consulting services to none and three customers for the three months ended October 31, 2024, and 2023, respectively [102][110]. Operating Expenses - Total operating expenses for the three months ended October 31, 2024, were $521,109, down from $781,779 in the prior year, reflecting a decrease of approximately 33% [20]. - General and administrative expenses decreased by approximately $0.3 million, or 37%, from approximately $0.7 million for the three months ended October 31, 2023, to approximately $0.4 million for the same period in 2024 [111]. - Total operating expenses decreased by approximately $0.3 million, or 33%, from approximately $0.8 million for the three months ended October 31, 2023, to approximately $0.5 million for the same period in 2024 [108]. - Rent expenses for the three months ended October 31, 2024, were $9,000, significantly lower than $125,679 for the same period in 2023, reflecting a reduction in lease terms and space [69]. Assets and Liabilities - As of October 31, 2024, total current assets increased to $5,785,278 from $2,898,748 as of July 31, 2024, marking an increase of approximately 99% [19]. - The company had current liabilities of approximately $625,048, down from $988,417 as of July 31, 2024, a decrease of about 37% [19]. - The company's cash and cash equivalents decreased to $457,764 as of October 31, 2024, from $1,249,376 as of July 31, 2024, a decline of about 63% [19]. - As of October 31, 2024, the company held cash and cash equivalents of $114,721 in U.S. banks and $343,043 in investment bank accounts [57]. - As of October 31, 2024, prepaid expenses and other current assets totaled $50,224, a decrease of 58.9% from $122,224 as of July 31, 2024 [65]. Cash Flow - The company reported operating cash outflows of approximately $800,628 for the three months ended October 31, 2024, compared to cash inflows of approximately $195,353 in the same period of 2023 [29]. - Operating cash outflows for the three months ended October 31, 2024, were approximately $0.8 million, while there were cash inflows of approximately $0.2 million in the same period of 2023 [122]. - The net cash provided by investing activities was $9,016 for the three months ended October 31, 2024, compared to a net cash used of approximately $0.4 million in the same period of 2023 [125]. - The Company had a net decrease in cash of approximately $791,612 for the three months ended October 31, 2024, compared to a decrease of approximately $244,797 in the same period in 2023 [122]. Shareholder Equity - Shareholders' equity increased to $4,997,680 as of October 31, 2024, from $1,753,754 as of July 31, 2024, reflecting an increase of approximately 185% [19]. - The company had a capital contribution of $3,611,000 from a shareholder in the form of trading securities during the three months ended October 31, 2024 [26]. - On October 28, 2024, the Company was granted 7,850,000 ordinary shares valued at $3,730,320 as a capital contribution, subject to restrictions until March 2025 [67]. Going Concern - The company continues to face uncertainty regarding its ability to continue as a going concern due to a history of net losses and cash outflows from operating activities [29]. - The Company is currently facing uncertainties regarding its ability to continue as a going concern due to a history of net losses and cash outflows from operating activities [118]. Legal and Compliance - The Company is currently involved in legal proceedings, including a lawsuit filed by J.P. Morgan Securities LLC for $5,064,160 in damages related to a stock transaction [142]. - A settlement agreement was reached with Boustead, requiring the Company to pay a total of $1 million in three installments, with the first installment of $250,000 due upon execution of the agreement [141]. - The company filed various certifications as part of its quarterly report, including those from the Chief Executive Officer and Chief Financial Officer [31.1][31.2][32.1][32.2]. - The certifications attached to the quarterly report comply with the Sarbanes-Oxley Act of 2002, ensuring regulatory adherence [32.1][32.2]. Strategic Plans - The company plans to transition its consulting services from PRC-based customers to more international customers to mitigate risks [59]. - The company aims to expand operations to other Asian countries, such as Malaysia, Vietnam, and Singapore, while continuing to focus on the North American market [101]. - The company has successfully helped nine Chinese enterprises to be quoted on the U.S. OTC markets since its inception [101]. Accounting and Reporting - The company is evaluating the impact of recent accounting updates on its consolidated financial statements [61][62]. - The company assesses collectability of accounts receivable on an individual basis due to having limited customers with different characteristics [39]. - The Company is in the process of evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and implementing training programs [130].

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[220] - Revenue from third parties decreased by approximately $0.7 million, while revenue from related parties decreased by approximately $1.1 million[226] 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[229] - General and administrative expenses remained stable at approximately $2.3 million and $2.2 million for fiscal years 2024 and 2023, respectively[231] Net Loss - Net loss was approximately $3.2 million for the fiscal year ended July 31, 2024, an increase of $0.3 million from a net loss of $2.9 million in fiscal year 2023[238] - The company reported a net loss of approximately $3.2 million for the fiscal year 2024, adjusted for losses from trading securities and changes in operating assets and liabilities[245] Consulting Services - The company provided consulting services to eight customers in fiscal year 2024, compared to three customers in fiscal year 2023[219] Expansion Plans - 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[218] Liquidity and Cash Flow - As of July 31, 2024, the company had cash of $1.2 million and current liabilities of $1.0 million, indicating sufficient liquidity to cover current obligations[241] - Net cash used in operating activities was approximately $0.1 million for the fiscal year ended July 31, 2024, compared to $2.3 million in the previous year[245][246] - Cash at the end of the fiscal year 2024 was $1,249,376, an increase from $606,022 at the end of fiscal year 2023[244] Investment Performance - The company recorded an investment loss of approximately $0.4 million for the fiscal year ended July 31, 2024, compared to an investment gain of approximately $0.2 million in fiscal year 2023[235] Financing Activities - Net cash provided by financing activities was approximately $2.3 million in fiscal year 2024, resulting from the issuance of ordinary shares in a private placement[249] 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, 2024[243] Accounts Receivable and Current Assets - The decrease in accounts receivable was approximately $1.1 million, indicating improved collection from customers[245] - The company experienced a decrease in prepaid expenses and other current assets of approximately $0.3 million due to amortization of advertising service fees[245] - The increase in accrued expenses and other current liabilities was approximately $1.3 million, reflecting changes in operational liabilities[245] Accounting Policies - The company has not identified any critical accounting policies or estimates that significantly affect the preparation of its financial statements[252]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I-FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Financial statements for April 30, 2024, show decreased liabilities, increased equity, an 85% revenue drop, and a $1.8 million net loss, with improved cash from financing but significant going concern doubts and legal risks [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of April 30, 2024, total assets decreased to $3.33 million, while total liabilities significantly reduced to $0.23 million, leading to an increase in total stockholders' equity to $3.10 million Condensed Consolidated Balance Sheet Highlights (as of April 30, 2024 vs. July 31, 2023) | Account | April 30, 2024 (Unaudited) | July 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $3,189,487 | $2,542,780 | | **Total Assets** | **$3,333,449** | **$3,768,570** | | **Total Current Liabilities** | $199,996 | $1,539,719 | | **Total Liabilities** | **$228,860** | **$2,229,217** | | **Total Stockholders' Equity** | **$3,104,589** | **$1,539,353** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended April 30, 2024, revenue doubled to $0.2 million, but net loss widened to $0.8 million; for the nine-month period, revenue plummeted 85% to $0.35 million, resulting in a $1.84 million net loss Operating Results for the Three Months Ended April 30 | Metric | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenues | $200,000 | $100,000 | | Loss from operations | $(521,282) | $(601,934) | | Net Loss | $(807,588) | $(335,770) | | (Loss) per share | $(0.08) | $(0.03) | Operating Results for the Nine Months Ended April 30 | Metric | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenues | $350,000 | $2,300,000 | | (Loss) income from operations | $(1,725,577) | $464,058 | | Net (Loss) Income | $(1,840,689) | $362,696 | | (Loss) earnings per share | $(0.19) | $0.04 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended April 30, 2024, net cash used in operations significantly decreased, while a $2.34 million private placement led to a $1.51 million net cash increase despite $0.75 million used in investing activities Cash Flow Summary for the Nine Months Ended April 30 | Activity | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | $(84,188) | $(1,361,108) | | Net cash (used in) provided by investing activities | $(749,470) | $78,557 | | Net cash provided by financing activities | $2,343,792 | $0 | | **Net increase (decrease) in cash** | **$1,510,134** | **$(1,282,551)** | - Non-cash financing activities for the nine months ended April 30, 2024, included issuing shares worth **$349,875** to settle payroll and a related party waiving liabilities of **$712,258**[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's financial consulting business, highlight significant going concern doubts due to recurring losses, and cover customer concentration, related-party transactions, and two pending legal proceedings - The company's operations generated net losses of **$0.8 million** and **$1.8 million** for the three and nine months ended April 30, 2024, respectively, raising substantial doubt about its ability to continue as a going concern[33](index=33&type=chunk)[35](index=35&type=chunk) - The company faces significant customer concentration risk, with two customers accounting for **71%** and **17%** of revenue for the nine months ended April 30, 2024, and one customer representing **100%** of accounts receivable[64](index=64&type=chunk) - In April 2024, the company provided a **$300,000** interest-free loan to its CEO, and a related party waived **$712,258** in liabilities, recorded as additional paid-in capital[85](index=85&type=chunk)[91](index=91&type=chunk) - The company is involved in two significant legal proceedings: an arbitration with Boustead Securities, LLC scheduled for September 2024, and a lawsuit from J.P Morgan Securities LLC for over **$5 million**, for which the company is seeking to compel arbitration[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) Management discusses the company's shift to North American financial consulting, an 85% revenue decrease leading to a significant net loss, and reiterates going concern doubts despite improved liquidity from financing activities [Business Overview](index=26&type=section&id=Business%20Overview) The company provides financial consulting services, primarily assisting SMEs with going public, and shifted its geographic focus from China to North America in May 2022 - The company's core business is providing comprehensive going-public consulting services to **SMEs**[112](index=112&type=chunk) - In May 2022, the company shifted its geographic focus from China to North America to help mid and small companies access U.S. capital markets[114](index=114&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) For the three months ended April 30, 2024, revenue doubled to $0.2 million, but net loss increased to $0.8 million; for the nine-month period, revenue fell 85% to $0.4 million, resulting in a $1.8 million net loss due to service phases, trading losses, and higher legal expenses Comparison of Operation Results for the Three Months Ended April 30, 2024 and 2023 | Metric | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $200,000 | $100,000 | $100,000 | 100% | | Loss from operations | $(521,282) | $(601,934) | $(80,652) | (13)% | | Net loss | $(807,588) | $(335,770) | $471,818 | 141% | Comparison of Operation Results for the Nine Months Ended April 30, 2024 and 2023 | Metric | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $350,000 | $2,300,000 | $(1,950,000) | (85)% | | (Loss) income from operations | $(1,725,577) | $464,058 | $(2,189,635) | (472)% | | Net (loss) income | $(1,840,689) | $362,696 | $(2,203,385) | (608)% | - The **85%** decrease in revenue for the nine-month period was due to providing different phases of listing-related consulting services compared to the prior year[134](index=134&type=chunk)[136](index=136&type=chunk) - General and administrative expenses for the nine-month period increased primarily due to a **~$0.2 million** rise in legal expenses for proceedings with Boustead Securities and J.P Morgan Securities[139](index=139&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by financing, with $2.1 million in cash, but recurring operating losses raise substantial doubt about its going concern ability, despite a $2.3 million private placement and $0.7 million debt waiver - The company reported a net loss of **$1.8 million** and operating cash outflows of **$84,188** for the nine months ended April 30, 2024, raising substantial doubt about its ability to continue as a going concern[151](index=151&type=chunk)[154](index=154&type=chunk) - As of April 30, 2024, the company had approximately **$2.1 million** in cash, with its ability to continue dependent on business plan execution and obtaining financing[153](index=153&type=chunk) - During the nine months ended April 30, 2024, the company raised approximately **$2.3 million** from a private placement and had a related party waive liabilities of approximately **$0.7 million**[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, ATIF Holdings Limited is not required to provide quantitative and qualitative disclosures about market risk[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of April 30, 2024, due to insufficient U.S. GAAP accounting personnel, undocumented financial closing procedures, and lack of formal risk assessment, with remediation plans underway - Management concluded that disclosure controls and procedures were not effective as of April 30, 2024[170](index=170&type=chunk) - Identified weaknesses include insufficient U.S. GAAP accounting personnel, lack of documented financial closing procedures, and absence of risk assessment per the COSO 2013 framework[170](index=170&type=chunk) - Remediation plans include hiring qualified accounting personnel, implementing U.S. GAAP training, and establishing an internal audit function[170](index=170&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II-OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in two significant legal proceedings: an arbitration with Boustead Securities, LLC scheduled for September 2024, and a lawsuit from J.P. Morgan Securities LLC seeking over $5 million, with outcomes currently unpredictable - The company is in a legal dispute with Boustead Securities, LLC over an alleged breach of an underwriting agreement, with arbitration scheduled for September 9 and 10, 2024[174](index=174&type=chunk)[180](index=180&type=chunk) - J.P. Morgan Securities LLC filed a lawsuit seeking to recover **$5,064,160** in damages, for which the company has filed a petition to compel arbitration, with a hearing set for September 19, 2024[182](index=182&type=chunk)[183](index=183&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, ATIF Holdings Limited is not required to provide risk factor disclosures - The company is not required to provide risk factors as it qualifies as a smaller reporting company[184](index=184&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In April 2024, the company raised approximately $2.34 million from private placements of ordinary shares and issued 384,478 shares to its CEO to settle $349,875 in unpaid salary - In April 2024, the company raised gross proceeds of **$1,343,790** and **$1,000,003** in two separate private placements by selling ordinary shares at **$1.23 per share**[185](index=185&type=chunk)[186](index=186&type=chunk) - On April 29, 2024, the company issued **384,478** ordinary shares to CEO Jun Liu to settle **$349,875** in unpaid salary[188](index=188&type=chunk)[189](index=189&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[192](index=192&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including securities purchase agreements, a deferred salary conversion agreement, and CEO/CFO certifications

Financial Performance - Revenues for the three months ended January 31, 2024, were $25,000, a significant decrease from $1,900,000 for the same period in 2023, indicating a decline of approximately 98.7%[22] - Net loss for the six months ended January 31, 2024, was $1,033,101, compared to a net income of $698,466 for the same period in 2023, marking a shift of approximately 248.5%[26] - For the three months ended January 31, 2024, the Company reported a net loss of approximately $0.4 million, compared to a net income of approximately $0.8 million for the same period in 2023, indicating a significant decline in performance[31] - For the six months ended January 31, 2024, the Company reported a net loss of approximately $1.0 million, while for the same period in 2023, it reported a net income of approximately $0.7 million[31] - Total revenue decreased by approximately $1.9 million, from $1.9 million for the three months ended January 31, 2023, to $25,000 for the three months ended January 31, 2024, representing a 99% decrease[114][116] - For the six months ended January 31, 2024, total revenue decreased by approximately $2.0 million, from $2.2 million for the same period in 2023 to approximately $150,000, a 93% decrease[126][128] - Net loss for the three months ended January 31, 2024, was approximately $0.4 million, a change of approximately $1.2 million from net income of $0.8 million for the same period in 2023, representing a 150% decrease[124] - Net loss for the six months ended January 31, 2024, was approximately $1.0 million, a change of $1.7 million from net income of approximately $0.7 million for the same period in 2023, representing a 248% decrease[137] Assets and Liabilities - Total current assets decreased from $2,542,780 as of July 31, 2023, to $1,619,991 as of January 31, 2024, representing a decline of approximately 36.3%[19] - Total liabilities decreased from $2,229,217 as of July 31, 2023, to $1,982,467 as of January 31, 2024, reflecting a reduction of about 11.1%[20] - Total assets decreased from $3,768,570 as of July 31, 2023, to $2,488,719 as of January 31, 2024, a decline of approximately 34%[20] - Cash and cash equivalents dropped from $606,022 as of July 31, 2023, to $139,152 as of January 31, 2024, a decrease of approximately 77%[19] - Current liabilities amounted to approximately $1.5 million, with approximately $0.7 million due to related parties, raising concerns about the Company's liquidity[32] - The accumulated deficit increased from $(27,666,624) as of July 31, 2023, to $(28,699,725) as of January 31, 2024, representing a deterioration of approximately 3.7%[19] Operating Expenses - Operating expenses for the three months ended January 31, 2024, totaled $572,516, slightly higher than $566,112 for the same period in 2023, indicating a marginal increase of about 1%[22] - Selling expenses for the three months ended January 31, 2024, increased by $45,000, or 94%, to $93,000 from $48,000 for the same period in 2023[117] - Selling expenses for the six months ended January 31, 2024, increased by $112,000, or 211%, to $165,000 from $53,000 for the same period in 2023[129] - General and administrative expenses for the three months ended January 31, 2024, were approximately $479,516, a decrease of $38,596, or 7%, from $518,112 for the same period in 2023[119] - General and administrative expenses for the six months ended January 31, 2024, increased from approximately $1.1 million in 2023 to approximately $1.2 million in 2024, primarily due to increased payroll expenses[131] Cash Flow - The Company reported operating cash outflows of $17,413 for the six months ended January 31, 2024, compared to approximately $0.8 million for the same period in 2023[31] - Net cash used in operating activities for the six months ended January 31, 2024, was $17,413, compared to $754,714 for the same period in 2023, indicating a significant reduction in cash outflow[147][148] - The Company experienced a net decrease in cash of $466,870 for the six months ended January 31, 2024, compared to a decrease of $920,750 for the same period in 2023[147] Revenue Recognition - Revenue is primarily generated from consulting services for clients intending to go public, with services categorized into three phases[49][50][51] - Revenue from Phase I and Phase II consulting services is recognized ratably over the estimated completion period, while Phase III revenue is recognized upon completion of the transaction[53] - As of January 31, 2024, one customer accounted for 100% of the Company's consolidated revenue for the three months ended, compared to three customers accounting for 34%, 34%, and 32% in the same period of 2023[61] - 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% in the same period of 2023[62] Legal Proceedings - The company is currently involved in a legal proceeding with J.P. Morgan Securities LLC, which claims damages of $5,064,160 related to a stock transaction[102] - The company has a pending legal proceeding with Boustead Securities, LLC, which alleges breach of contract and is currently in arbitration[100] - The Company is involved in ongoing legal proceedings, including a lawsuit filed by Boustead, which may have material adverse effects on its business and financial condition[160][170] Future Outlook - The Company anticipates needing to raise additional capital immediately to continue funding its operations, indicating substantial doubt about its ability to continue as a going concern[33] - The Company’s ability to continue as a going concern is dependent on management's ability to successfully execute its business plan, which includes increasing revenue while controlling operating costs[143][144] - The company plans to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, while continuing to focus on the North American market[108] Miscellaneous - The Company adopted ASU No. 2016-13 for credit loss measurement, which had no impact on the allowance for credit losses for accounts receivable upon adoption[41] - The financial statements have been prepared on a going concern basis, reflecting the Company's ability to realize assets and satisfy liabilities in the ordinary course of business[34] - The Company has established several subsidiaries, including ATIF Business Consulting LLC and ATIF Business Management LLC, to expand its business advisory and financial consulting services[27] - 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 January 31, 2024[146] - The Company is currently evaluating steps to remediate the ineffectiveness of its disclosure controls and procedures, including hiring qualified accounting personnel and implementing training programs[157] - The certifications attached to the quarterly report comply with the Sarbanes-Oxley Act of 2002[177] - The report was signed by the Chief Executive Officer and Chief Financial Officer on March 18, 2024[181][182]

Cover Page Information [Filing and Registrant Details](index=1&type=section&id=Filing%20and%20Registrant%20Details) This section provides the basic filing information for the Form 10-Q, identifying ATIF Holdings Limited as the registrant, its jurisdiction of incorporation, principal executive offices, and contact number - The report is a Quarterly Report on Form 10-Q for the period ended October 31, 2023[2](index=2&type=chunk) - The registrant is ATIF HOLDINGS LIMITED, incorporated in the British Virgin Islands, with Commission File Number: 001-38876[2](index=2&type=chunk)[3](index=3&type=chunk) [Securities and Filer Status](index=1&type=section&id=Securities%20and%20Filer%20Status) This section details the company's registered securities and its classification under SEC filing requirements, indicating its compliance status and filer type Title of each class | Title of each class | Trading Symbol | Name of exchange on which registered | | :------------------ | :------------- | :----------------------------------- | | Ordinary Shares | ATIF | The Nasdaq Stock Market | - The registrant has filed all required reports during the preceding 12 months and has been subject to such filing requirements for the past 90 days[4](index=4&type=chunk) Filer Status | Filer Status | Status | | :---------------------- | :----- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | [Shares Outstanding](index=1&type=section&id=Shares%20Outstanding) This section provides the total number of common stock shares outstanding as of a recent date - As of December 15, 2023, there were **9,627,452** shares of the registrant's common stock outstanding[6](index=6&type=chunk) [TABLE OF CONTENTS](index=3&type=section&id=TABLE%20OF%20CONTENTS) [FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Nature and Identification](index=4&type=section&id=Nature%20and%20Identification) This section clarifies that the report contains forward-looking statements reflecting current expectations about the Company's future, identifiable by specific terminology, and based on available information and management's interpretation of significant factors - Forward-looking statements reflect current expectations and projections about the Company's future results, performance, liquidity, financial condition, prospects, and opportunities[10](index=10&type=chunk) - These statements are generally identifiable by words such as 'may,' 'should,' 'will,' 'plan,' 'expect,' 'anticipate,' 'estimate,' 'believe,' 'intend,' 'seek,' or 'project'[11](index=11&type=chunk) [Risks and Reliance](index=4&type=section&id=Risks%20and%20Reliance) This section warns that actual results may differ materially from forward-looking statements due to various risks and uncertainties, advising investors against undue reliance and stating no obligation to update these statements - Actual results, performance, liquidity, financial condition, and results of operations could differ materially from forward-looking statements due to various risks, uncertainties, and other factors, including the ability to raise sufficient capital[11](index=11&type=chunk) - Potential investors should not place undue reliance on any forward-looking statements, and there is no undertaking to publicly update or revise them[12](index=12&type=chunk) - The report also contains estimates and statistical data from independent parties and the Company, which involve assumptions and limitations, and should not be given undue weight[14](index=14&type=chunk) [PART I-FINANCIAL INFORMATION](index=5&type=section&id=PART%20I-FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of changes in equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, liquidity, and other financial details for the reported periods [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights | Metric | October 31, 2023 (unaudited) | July 31, 2023 | | :----------------- | :--------------------------- | :------------ | | Total Current Assets | $1,953,257 | $2,542,780 | | Total Assets | $3,040,594 | $3,768,570 | | Total Current Liabilities | $1,495,717 | $1,539,719 | | Total Liabilities | $2,126,704 | $2,229,217 | | Total Equity | $913,890 | $1,539,353 | - Total assets decreased by approximately **$727,976 (19.3%)** from July 31, 2023, to October 31, 2023[19](index=19&type=chunk) - Total equity decreased by approximately **$625,463 (40.6%)** from July 31, 2023, to October 31, 2023[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss Highlights | Metric | Three Months Ended Oct 31, 2023 | Three Months Ended Oct 31, 2022 | | :------------------------- | :------------------------------ | :------------------------------ | | Revenues | $125,000 | $300,000 | | Total operating expenses | $781,779 | $567,896 | | Loss from operations | $(656,779) | $(267,896) | | Net loss and comprehensive loss | $(625,463) | $(112,515) | | Loss Per share – basic and diluted | $(0.06) | $(0.01) | - Revenues decreased by **58.3%** from **$300,000** in Q1 2023 to **$125,000** in Q1 2024[20](index=20&type=chunk) - Net loss increased significantly by **455.9%** from **$(112,515)** in Q1 2023 to **$(625,463)** in Q1 2024[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Condensed Consolidated Statements of Changes in Equity Highlights | Metric | October 31, 2023 | October 31, 2022 | | :---------------------- | :--------------- | :--------------- | | Balance at period end | $913,890 | $4,309,137 | | Net loss for the period | $(625,463) | $(112,515) | - Total equity decreased from **$1,539,353** at July 31, 2023, to **$913,890** at October 31, 2023, primarily due to a net loss of **$625,463** for the period[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Three Months Ended Oct 31, 2023 | Three Months Ended Oct 31, 2022 | | :----------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $195,353 | $363,709 | | Net cash used in investing activities | $(440,150) | $(242,837) | | Net (decrease) increase in cash | $(244,797) | $120,872 | | Cash, end of period | $361,225 | $1,871,009 | - Net cash provided by operating activities decreased by **46.3%** from **$363,709** in Q1 2023 to **$195,353** in Q1 2024[23](index=23&type=chunk) - Net cash used in investing activities increased by **81.2%** from **$(242,837)** in Q1 2023 to **$(440,150)** in Q1 2024[23](index=23&type=chunk) [NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering the company's organization, significant accounting policies, liquidity, related party transactions, contingencies, and subsequent events [NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS](index=9&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) ATIF Holdings Limited, incorporated in the British Virgin Islands, operates as a holding company primarily providing business advisory and financial consulting services to small and medium-sized enterprises, with recent expansion into US-based subsidiaries - ATIF Holdings Limited was incorporated on January 5, 2015, in the British Virgin Islands and is primarily engaged in providing business advisory and financial consulting services to SMEs[24](index=24&type=chunk) - The Company established several wholly-owned subsidiaries in the U.S. (ATIF BC, ATIF BM, ATIF BD) and BVI (ATIF Investment) between 2021 and 2022 to expand its operations[25](index=25&type=chunk)[27](index=27&type=chunk) - On August 1, 2022, the Company sold all its equity interest in ATIF GP for **$50,000**, which was not considered a strategic shift[26](index=26&type=chunk) [NOTE 2 – LIQUIDITY AND GOING CONCERN](index=10&type=section&id=NOTE%202%20%E2%80%93%20LIQUIDITY%20AND%20GOING%20CONCERN) The Company reported net losses and declining operating cash flows, leading to a working capital deficit and substantial doubt about its ability to continue as a going concern, necessitating immediate additional capital Net Loss and Operating Cash Flow | Metric | Three Months Ended Oct 31, 2023 | Three Months Ended Oct 31, 2022 | | :---------------------- | :------------------------------ | :------------------------------ | | Net loss | $(0.6) million | $(0.1) million | | Operating cash inflows | $0.2 million | $0.4 million | - As of October 31, 2023, the Company had **$0.4 million** in cash and **$0.7 million** in accounts receivable, but current liabilities of **$1.5 million**, including **$0.7 million** due to related parties[29](index=29&type=chunk) - Losses from operations, a working capital deficit, and the need for additional capital raise substantial doubt about the Company's ability to continue as a going concern[30](index=30&type=chunk) [NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%203%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and policies used in preparing the financial statements, including the basis of presentation, use of estimates, revenue recognition, and treatment of financial instruments, income taxes, and segment reporting [Basis of Presentation and Principles of Consolidation](index=10&type=section&id=Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) The interim unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries, with all intercompany balances and transactions eliminated - Financial statements are prepared in accordance with U.S. GAAP and SEC rules, without audit, and should be read with the annual Form 10-K[32](index=32&type=chunk)[33](index=33&type=chunk) - The consolidated financial statements include the accounts of the Company and its subsidiaries, with intercompany balances and transactions eliminated[35](index=35&type=chunk) [Use of Estimates](index=11&type=section&id=Use%20of%20Estimates) Management makes significant estimates and assumptions in preparing the financial statements, which affect reported amounts of assets, liabilities, revenues, and expenses, and actual results may differ - Significant estimates include allowance for credit losses, useful lives of assets, recoverability of long-lived assets, revenue recognition, contingent liabilities, and realization of deferred tax assets[36](index=36&type=chunk) [Accounts Receivable, net](index=11&type=section&id=Accounts%20Receivable%2C%20net) The Company adopted ASU 2016-13 (CECL model) on August 1, 2023, for measuring credit losses on financial instruments, which involves using loss-rate methods and individual assessment for limited customers - The Company adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), on August 1, 2023, using a modified retrospective transition method[37](index=37&type=chunk) - The new guidance replaces the incurred loss impairment model with a forward-looking current expected credit losses (CECL) model[37](index=37&type=chunk) - The Company maintains an allowance for credit losses as an offset to accounts receivable, estimated using loss-rate methods and individual assessment due to a limited customer base[39](index=39&type=chunk) [Fair Value of Financial Instruments](index=11&type=section&id=Fair%20Value%20of%20Financial%20Instruments) The Company uses a three-level fair value hierarchy for financial instruments, with trading securities valued at Level 1 (quoted prices in active markets) and other short-term instruments approximating fair value - Fair value is defined as the price received to sell an asset or paid to transfer a liability in an orderly transaction[40](index=40&type=chunk) - A three-level fair value hierarchy prioritizes inputs: Level 1 (quoted prices in active markets), Level 2 (quoted prices for similar assets/liabilities or observable market data), and Level 3 (unobservable inputs)[40](index=40&type=chunk)[41](index=41&type=chunk) - Investment in trading securities are based on **Level 1** inputs, while other financial instruments approximate fair value due to their short-term nature[41](index=41&type=chunk)[42](index=42&type=chunk) [Revenue Recognition](index=13&type=section&id=Revenue%20Recognition) The Company recognizes revenue from consulting services in accordance with ASC 606, categorizing services into three phases (Phase I, II, III) with revenue recognized ratably over the estimated completion period for Phase I and II, and upon transaction completion for Phase III - The Company recognizes revenue in accordance with **ASC 606 Revenue from Contracts with Customers**[43](index=43&type=chunk) - Consulting services are categorized into three phases: Phase I (due diligence, market research, etc., ~3 months), Phase II (reorganization, pre-listing education, etc., ~8 months), and Phase III (shell company identification, public filing assistance)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Revenue for Phase I and II is recognized ratably over the estimated completion period, while Phase III revenue is recognized upon completion of the reverse merger or IPO transaction[49](index=49&type=chunk) [Income Taxes](index=14&type=section&id=Income%20Taxes) The Company accounts for income taxes under ASC 740, recognizing deferred tax assets and liabilities for temporary differences and establishing valuation allowances when realization is uncertain - The Company accounts for income taxes under **ASC 740**, recognizing deferred tax assets and liabilities for future tax consequences of temporary differences[51](index=51&type=chunk) - Uncertain tax positions are recognized if it is 'more likely than not' that the position would be sustained in an examination[52](index=52&type=chunk) [Segment reporting](index=14&type=section&id=Segment%20reporting) Based on management's assessment, the Company operates in a single reporting segment, which is the consulting service business - The Company's Chief Operating Decision Maker (CODM) is Mr. Liu, the Chairman and CEO[53](index=53&type=chunk) - As of October 31, 2023, and July 31, 2023, the Company operates in one operating segment: the consulting service business[54](index=54&type=chunk) [Risks and Uncertainty](index=14&type=section&id=Risks%20and%20Uncertainty) The Company faces credit risk from cash deposits and unsecured accounts receivable, and significant concentration risk with a few customers accounting for a large portion of revenue and receivables. Other risks include natural disasters and health epidemics - The Company's cash and cash equivalents are deposited in US banks, with FDIC insurance up to **$250,000**[55](index=55&type=chunk) - For the three months ended October 31, 2023, three customers accounted for **48%**, **40%**, and **12%** of consolidated revenue, respectively[57](index=57&type=chunk) - As of October 31, 2023, two customers accounted for **56%** and **44%** of consolidated accounts receivable[58](index=58&type=chunk) - The Company plans to mitigate concentration risk by transitioning consulting services from PRC-based customers to more international customers[59](index=59&type=chunk) [NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=16&type=section&id=NOTE%204%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid expenses and other current assets primarily consist of prepayments for advertising services, which decreased from July 31, 2023, to October 31, 2023 Prepaid Expenses and Other Current Assets | Item | October 31, 2023 (unaudited) | July 31, 2023 | | :------------------------------ | :--------------------------- | :------------ | | Prepayment for advertising service fee | $336,000 | $408,000 | | Advance to vendors | $- | $10,000 | | Others | $36,540 | $11,570 | | Total | $372,540 | $429,570 | - Prepayment for advertising services decreased by **$72,000** from July 31, 2023, to October 31, 2023[62](index=62&type=chunk) [NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET](index=16&type=section&id=NOTE%205%20%E2%80%93%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%2C%20NET) Net property and equipment decreased slightly from July 31, 2023, to October 31, 2023, with depreciation expense also decreasing year-over-year Property and Equipment, Net | Item | October 31, 2023 (unaudited) | July 31, 2023 | | :---------------------------- | :--------------------------- | :------------ | | Furniture, fixtures and equipment | $208,536 | $204,204 | | Less: accumulated depreciation | $(120,236) | $(110,567) | | Property and equipment, net | $88,300 | $93,637 | - Depreciation expense for the three months ended October 31, 2023, was **$9,669**, a decrease from **$16,656** in the same period of 2022[63](index=63&type=chunk) [NOTE 6 – INTANGIBLE ASSETS](index=16&type=section&id=NOTE%206%20%E2%80%93%20INTANGIBLE%20ASSETS) Net intangible assets, primarily software, decreased from July 31, 2023, to October 31, 2023, with consistent amortization expense year-over-year Intangible Assets, Net | Item | October 31, 2023 (unaudited) | July 31, 2023 | | :------------------------ | :--------------------------- | :------------ | | Software | $320,000 | $320,000 | | Less: accumulated amortization | $(266,669) | $(246,669) | | Intangible assets | $53,331 | $73,331 | - Amortization expense remained constant at **$20,000** for both the three months ended October 31, 2023, and 2022[64](index=64&type=chunk) [NOTE 7 – INVESTMENTS IN TRADING SECURITIES](index=17&type=section&id=NOTE%207%20%E2%80%93%20INVESTMENTS%20IN%20TRADING%20SECURITIES) The Company's investments in trading securities significantly increased from July 31, 2023, to October 31, 2023, but also resulted in a higher loss from fair value changes during the period Investments in Trading Securities | Metric | October 31, 2023 (unaudited) | July 31, 2023 | | :----------------------------------- | :--------------------------- | :------------ | | Balance of investments in trading securities | $459,353 | $130,649 | Loss from Investment in Trading Securities | Period | Loss from Investment in Trading Securities | | :----------------------------------- | :----------------------------------------- | | Three months ended October 31, 2023 | $(109,403) | | Three months ended October 31, 2022 | $(20,004) | - The loss from investment in trading securities increased by **$89,399 (446.9%)** from the prior year period[65](index=65&type=chunk) [NOTE 8 – OPERATING LEASES](index=17&type=section&id=NOTE%208%20%E2%80%93%20OPERATING%20LEASES) The Company leases office space and a car under non-cancelable operating leases, with ROU assets and lease liabilities decreasing slightly from July 31, 2023, to October 31, 2023, while the weighted average discount rate remained constant Operating Lease Related Assets and Liabilities | Item | October 31, 2023 (unaudited) | July 31, 2023 | | :------------------------------ | :--------------------------- | :------------ | | Right-of-use assets, net | $945,706 | $1,058,822 | | Operating lease liabilities, current | $375,278 | $415,411 | | Operating lease liabilities, noncurrent | $630,987 | $689,498 | | Total operating lease liabilities | $1,006,265 | $1,104,909 | Weighted Average Lease Terms and Discount Rates | Metric | October 31, 2023 (unaudited) | July 31, 2023 | | :------------------------------ | :--------------------------- | :------------ | | Weighted average remaining lease term (years) | 3.26 | 3.35 | | Weighted average discount rate | 4.90% | 4.90% | - Rent expense for the three months ended October 31, 2023, was **$125,679**, an increase from **$120,692** in the same period of 2022[66](index=66&type=chunk) [NOTE 9 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=19&type=section&id=NOTE%209%20%E2%80%93%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) Accrued expenses and other current liabilities increased from July 31, 2023, to October 31, 2023, primarily driven by a rise in accrued payroll expenses Accrued Expenses and Other Current Liabilities | Item | October 31, 2023 (unaudited) | July 31, 2023 | | :---------------------- | :--------------------------- | :------------ | | Accrued payroll expenses | $308,620 | $212,953 | | Rental deposit payable | $66,000 | $66,000 | | Others | $2,361 | $14,187 | | Total | $376,981 | $293,140 | - Accrued payroll expenses increased by **$95,667 (44.9%)** from July 31, 2023, to October 31, 2023[70](index=70&type=chunk) [NOTE 10 – DEFERRED REVENUE](index=19&type=section&id=NOTE%2010%20%E2%80%93%20DEFERRED%20REVENUE) Deferred revenue decreased to zero as of October 31, 2023, with $70,000 recognized as other income due to customer agreement terminations where advances were not refunded Deferred Revenue Balance | Date | Deferred Revenue | | :-------------- | :--------------- | | October 31, 2023 | $nil | | July 31, 2023 | $70,000 | - For the three months ended October 31, 2023, **$70,000** of advance from customer balance as of July 31, 2023, was recognized as other income due to terminated agreements[72](index=72&type=chunk) [NOTE 11 – RELATED PARTY TRANSACTIONS](index=19&type=section&id=NOTE%2011%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) The Company engaged in various transactions with related parties, including loan repayments and collections, resulting in significant balances due to and from these parties as of October 31, 2023 - Key related parties include Huaya (wholly owned by former CEO Mr. Pishan Chi) and Asia International Securities Exchange Co., Ltd. (wholly owned by current CEO Mr. Jun Liu)[73](index=73&type=chunk) - For the three months ended October 31, 2023, the Company repaid **$17,710** to Asia International Securities Exchange Co., Ltd. and collected **$20,000** from Huaya[74](index=74&type=chunk) Balances with Related Parties (October 31, 2023) | Item | Balance (unaudited) | | :------------------------ | :------------------ | | Accounts receivable (Asia International Securities Exchange Co., Ltd.) | $- | | Other receivable (Huaya) | $20,539 | | Other payables (Asia International Securities Exchange Co., Ltd.) | $712,258 | [NOTE 12 – TAXES](index=21&type=section&id=NOTE%2012%20%E2%80%93%20TAXES) The Company's BVI entities are not subject to income tax, while its US entities are subject to federal and state income taxes. No income tax expenses were incurred in the reported periods, and a 100% valuation allowance is provided against deferred tax assets due to net operating losses - The Company's BVI entities (ATIF and ATIF Investment) are not subject to income or capital gains tax in the British Virgin Islands[78](index=78&type=chunk) - US subsidiaries (ATIF Inc., ATIF BC, ATIF BM, ATIF BD) are subject to federal (**21%**) and state (**8.84%**) income taxes[79](index=79&type=chunk) - No income tax expenses were incurred for the three months ended October 31, 2023, and 2022[80](index=80&type=chunk) - A **100%** valuation allowance has been provided against deferred tax assets due to the uncertainty of their realization, primarily stemming from net operating losses[82](index=82&type=chunk) [NOTE 13 – CONTINGENCIES](index=22&type=section&id=NOTE%2013%20%E2%80%93%20CONTINGENCIES) The Company is involved in a pending legal proceeding with Boustead Securities, LLC, concerning an alleged breach of an underwriting agreement. The case is currently in arbitration, with a hearing on contract interpretation extended to February 29, 2024, and the outcome is premature to assess - On **May 14, 2020**, Boustead Securities, LLC filed a lawsuit against the Company and LGC for breaching an underwriting agreement[85](index=85&type=chunk) - The lawsuit alleges that the Company's acquisition of LGC during an exclusive agreement period deprived Boustead of compensation[86](index=86&type=chunk) - The case is currently in arbitration, initiated on March 10, 2023, with a hearing on contract interpretation extended to **February 29, 2024**[91](index=91&type=chunk) - Management believes it is premature to assess and predict the outcome of this pending arbitration[92](index=92&type=chunk) [NOTE 14 – SUBSEQUENT EVENT](index=22&type=section&id=NOTE%2014%20%E2%80%93%20SUBSEQUENT%20EVENT) On December 4, 2023, the Company received correspondence from J.P. Morgan Securities LLC regarding a potential lawsuit for $5,064,160 in damages related to a stock transaction by ATIF-1 GP, LLC, which management believes it is not liable for due to the prior sale of the entity - On **December 4, 2023**, the Company received correspondence from J.P. Morgan Securities LLC concerning a potential lawsuit for **$5,064,160** in damages[93](index=93&type=chunk)[94](index=94&type=chunk) - The claim relates to a stock transaction by ATIF-1 GP, LLC, which the Company sold in August 2022[94](index=94&type=chunk) - Management believes the Company would not be liable for the claim as ATIF-1 GP, LLC was sold prior to the alleged event[94](index=94&type=chunk) [ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operations](index=24&type=section&id=ITEM%202.%20Management%27s%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including a business overview, key factors affecting the business, detailed analysis of revenues and expenses, liquidity, capital resources, and critical accounting policies [Business Overview](index=24&type=section&id=Business%20Overview) ATIF Holdings Limited offers financial consulting services to SMEs in Asia and North America, specializing in 'going public' services. The company has shifted its geographic focus to North America and plans further international expansion, while also diversifying into asset management, investment holding, and media services - The Company provides financial consulting services to small and medium-sized enterprise customers in Asia and North America, with a focus on comprehensive 'going public' consulting services[96](index=96&type=chunk) - In May 2022, the Company shifted its geographic focus for consulting services from China to North America, aiming to help mid and small companies list on U.S. capital markets[98](index=98&type=chunk) - Total revenue from consulting services decreased from **$0.3 million** for the three months ended October 31, 2022, to **$0.1 million** for the same period in 2023[100](index=100&type=chunk) [Key Factors that Affect our Business](index=25&type=section&id=Key%20Factors%20that%20Affect%20our%20Business) The Company's business success is significantly influenced by its ability to effectively acquire and retain customers, navigate intense market competition, and attract and retain key personnel - Business success depends on the ability to acquire customers effectively through sales, marketing, and referrals, with potential adverse effects if channels become less effective[101](index=101&type=chunk) - The consulting business faces strong market competition from entities with greater resources, and the Company's growth depends on its ability to differentiate its services[102](index=102&type=chunk) - The Company relies heavily on the expertise of its directors and officers and its ability to attract and retain qualified financial consultancy professionals for sustained growth[103](index=103&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) The Company experienced a significant decline in revenue and a substantial increase in net loss for the three months ended October 31, 2023, compared to the prior year, driven by increased selling and general & administrative expenses, and higher losses from trading securities Results of Operations Summary (Three Months Ended October 31) | Metric | 2023 | 2022 | Change Amount | Change Percentage | | :-------------------------------- | :---------- | :---------- | :------------ | :---------------- | | Revenues | $125,000 | $300,000 | $(175,000) | (58)% | | Selling expenses | $72,000 | $5,000 | $67,000 | 1,340% | | General and administrative expenses | $709,779 | $562,896 | $146,883 | 26% | | Loss from operations | $(656,779) | $(267,896) | $388,883 | 145% | | Other income, net | $140,720 | $59,500 | $81,220 | 137% | | Loss from investment in trading securities | $(109,404) | $(20,004) | $89,400 | 447% | | Net loss | $(625,463) | $(112,515) | $512,948 | 456% | - Revenues decreased by **$0.2 million (58%)** due to providing IPO assistance to three customers in 2023 (**$0.1 million**) compared to completing Phase II service for one customer in 2022 (**$0.3 million**)[106](index=106&type=chunk)[107](index=107&type=chunk) - Selling expenses surged by **1,340%** to **$72,000**, primarily due to **$72,000** in monthly promotion expenses incurred since December 2022[108](index=108&type=chunk) - General and administrative expenses increased by **$0.1 million (26%)**, mainly due to a rise in payroll and welfare expenses[112](index=112&type=chunk) - Other income, net, increased by **$81,220**, primarily from a **$70,000** reversal of deferred revenues due to customer agreement terminations[114](index=114&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity is strained by net losses and a working capital deficit, necessitating immediate additional capital. Cash flows from operating activities decreased, while cash used in investing activities increased, leading to a net decrease in cash for the period - The Company anticipates needing to raise additional capital immediately to fund operations due to losses, working capital deficit, and the requirement of additional capital[120](index=120&type=chunk)[123](index=123&type=chunk) Cash Flow Summary (Three Months Ended October 31) | Cash Flow Activity | 2023 | 2022 | | :----------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $195,353 | $363,709 | | Net cash used in investing activities | $(440,150) | $(242,837) | | Net (decrease) increase in cash | $(244,797) | $120,872 | | Cash, end of period | $361,225 | $1,871,009 | - Net cash provided by operating activities decreased due to net loss, loss from trading securities, and changes in accounts receivable, prepaid expenses, deferred revenue, and accrued expenses[127](index=127&type=chunk) - Net cash used in investing activities primarily consisted of **$0.4 million** in investments in trading securities[130](index=130&type=chunk) [Critical Accounting Policies and Estimate](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimate) Management states that due to the current level of activity and lack of complex transactions, there are no critical accounting policies and estimates that materially affect the preparation of the financial statements - Critical accounting policies involve difficult, subjective, or complex judgments that could materially affect financial condition or results of operations[132](index=132&type=chunk) - Due to the level of activity and lack of complex transactions, the Company believes there are currently no critical accounting policies and estimates that affect the preparation of its financial statements[133](index=133&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, ATIF Holdings Limited is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide information regarding quantitative and qualitative disclosures about market risk[134](index=134&type=chunk) [ITEM 4. Controls and Procedures](index=30&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The Company's disclosure controls and procedures were deemed ineffective as of October 31, 2022, due to insufficient accounting personnel, lack of documented financial closing procedures, and inadequate risk assessment. Management is evaluating remediation steps, and no material changes occurred in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=30&type=section&id=Disclosure%20Controls%20and%20Procedures) - As of **October 31, 2022**, the Company's disclosure controls and procedures were not effective[135](index=135&type=chunk) - Ineffectiveness was attributed to insufficient full-time accounting and financial reporting personnel, lack of documented financial closing procedures, and lack of risk assessment in accordance with the COSO 2013 framework[135](index=135&type=chunk) - Management is evaluating remediation steps, including hiring more qualified accounting personnel, implementing training programs, and establishing an internal audit function[135](index=135&type=chunk) [Changes in Internal Control over Financial Reporting](index=30&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - Except for the disclosed ineffectiveness of disclosure controls and procedures, there have been no material changes in internal controls over financial reporting during the fiscal quarter ended October 31, 2023[136](index=136&type=chunk) [PART II-OTHER INFORMATION](index=31&type=section&id=PART%20II-OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=31&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is involved in an ongoing legal proceeding with Boustead Securities, LLC, alleging breach of an underwriting agreement. The case has progressed to arbitration, with a hearing on contract interpretation scheduled for February 29, 2024, and the outcome remains uncertain - On **May 14, 2020**, Boustead Securities, LLC filed a lawsuit against the Company and Leaping Group Co., Ltd. (LGC) for breaching an underwriting agreement[140](index=140&type=chunk) - Boustead alleges that the Company's acquisition of LGC during an exclusive agreement period deprived Boustead of compensation[141](index=141&type=chunk) - The case is currently in arbitration before JAMS in California, with a hearing on contract interpretation extended to **February 29, 2024**[147](index=147&type=chunk) - Management believes it is premature to assess and predict the outcome of this pending arbitration[148](index=148&type=chunk) [ITEM 1A. Risk Factors](index=32&type=section&id=ITEM%201A.%20Risk%20Factors) As a smaller reporting company, ATIF Holdings Limited is not required to provide specific disclosures regarding risk factors - As a smaller reporting company, the registrant is not required to provide the information regarding risk factors[149](index=149&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to ATIF Holdings Limited for the reporting period - This item is marked as 'Not applicable'[150](index=150&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=32&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to ATIF Holdings Limited for the reporting period - This item is marked as 'Not applicable'[151](index=151&type=chunk) [ITEM 4. Mine Safety Disclosures](index=32&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to ATIF Holdings Limited for the reporting period - This item is marked as 'Not applicable'[152](index=152&type=chunk) [ITEM 5. Other Information](index=32&type=section&id=ITEM%205.%20Other%20Information) This item is not applicable to ATIF Holdings Limited for the reporting period - This item is marked as 'Not applicable'[153](index=153&type=chunk) [ITEM 6. Exhibits](index=33&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[155](index=155&type=chunk) - The filing also includes various Inline XBRL Taxonomy Extension Documents and a Cover Page Interactive Data File[155](index=155&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) [Report Signatures](index=34&type=section&id=Report%20Signatures) The report is duly signed on behalf of ATIF Holdings Limited by its Chief Executive Officer, Jun Liu, as of December 15, 2023 - The report was signed by Jun Liu, Chief Executive Officer of ATIF Holdings Limited, on **December 15, 2023**[158](index=158&type=chunk)[160](index=160&type=chunk)

Revenue Growth - 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[202]. - Revenue from third parties was $1,150,000 for the year ended July 31, 2023, representing a 27% increase from $905,310 in 2022[206]. - Revenue from related parties increased by $538,000, or 71%, from $762,000 in 2022 to $1,300,000 in 2023[206]. Profitability - Gross profit rose to $2,450,000 in 2023, a 143% increase from $1,007,310 in 2022[206]. - The company reported a net loss of $2,882,299 for the year ended July 31, 2023, a decrease of $488,800, or 14%, from the previous year[206]. - The company reported a net loss of $2.9 million for the year ended July 31, 2023, a decrease from a net loss of $3.4 million in the previous fiscal year[224]. Expenses Management - Selling expenses decreased by $362,291, or 64%, from $569,529 in 2022 to $207,238 in 2023[210]. - General and administrative expenses decreased by $409,735, or 15%, from $2,651,361 in 2022 to $2,241,626 in 2023[212]. Cash Flow and Liquidity - Operating cash outflows from continuing operations were approximately $2.3 million for the year ended July 31, 2023, compared to $0.1 million in the prior year[226]. - As of July 31, 2023, the company had cash of $0.6 million and accounts receivable of $0.6 million, with current liabilities totaling $1.5 million[227]. - Net cash used in operating activities was $2.3 million for the fiscal year ended July 31, 2023, primarily due to the net loss and adjustments for provisions against receivables[233]. - Net cash provided by investing activities was $0.4 million in fiscal year 2023, mainly from the disposal of investments and collection of loans[235]. - Net cash provided by financing activities was $0.7 million in fiscal year 2023, sourced from borrowings from a related party[237]. Future Outlook and Plans - The company plans to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, while continuing to focus on the North American market[200]. - The company plans to support future operations primarily through cash generated from operations and cash on hand, but may need to raise additional funds[225]. Going Concern and Dividends - The company reported a working capital deficit and indicated uncertainty regarding its ability to continue as a going concern[228]. - The company has not declared or paid any cash dividends to shareholders and does not plan to do so in the near future[230]. Taxation - The federal tax rate for the company's U.S. subsidiaries is 21%, with a state tax rate of 8.84%[223]. Other Achievements - The company successfully assisted three Chinese enterprises to be quoted on the U.S. OTC markets since its inception[200]. Provisions - The company provided a full provision of $2,654,767 against balances due from buyers of LGC for the year ended July 31, 2023[214].

Financial Performance - Total revenues for the three months ended April 30, 2023, were $100,000, a decrease of 61.8% compared to $261,925 for the same period in 2022[19] - Operating expenses for the three months ended April 30, 2023, were $701,934, an increase of 17.3% from $598,620 in the same period of 2022[19] - The 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[19] - The company reported a comprehensive loss of $335,770 for the three months ended April 30, 2023, compared to a comprehensive income of $269,055 for the same period in 2022[19] - For the nine months ended April 30, 2023, net income was $362,696 compared to a net loss of $1,992,933 for the same period in 2022[23] - The company reported a net loss of $335,770 for the three months ended April 30, 2023, compared to a net income of $228,316 for the same period in 2022[20] - Cash flows from operating activities resulted in a net cash used of $1,361,108 for the nine months ended April 30, 2023, compared to a net cash used of $283,267 for the same period in 2022[23] - The company had a cash balance of $467,586 at the end of April 30, 2023, down from $1,306,038 at the end of April 30, 2022[23] Assets and Liabilities - Total current assets as of April 30, 2023, were $6,672,023, an increase of 11.4% from $5,992,460 as of July 31, 2022[18] - Total liabilities as of April 30, 2023, were $3,383,237, a decrease of 10.6% from $3,784,348 as of July 31, 2022[18] - Total assets decreased from $5,733,173 at April 30, 2022, to $4,784,348 at April 30, 2023[20] - The Company had cash of $0.5 million as of April 30, 2023, against current liabilities of $2.6 million[30] - The balance of due from buyers of LGC as of April 30, 2023, was $2,654,767, which includes principal of $2,300,000 and interest of $354,767[74] - The balance due to third parties increased to $1,092,828 as of April 30, 2023, from $500,000 as of July 31, 2022, indicating a significant rise of 118.6%[87] Cash and Liquidity - Cash and cash equivalents as of April 30, 2023, were $467,586, reflecting a decrease from previous periods[18] - As of April 30, 2023, the company had cash of $0.5 million, down from $1.8 million as of July 31, 2022, indicating a significant decrease in liquidity[62] - The Company expects to collect consulting service fees of $3.3 million over the next 12 months from four service-in-progress agreements[30] - The Company intends to finance future working capital requirements through cash generated from operating activities and equity financings[31] Operational Insights - The company anticipates future sales and profitability to be influenced by its ability to develop and introduce new products and services[16] - The company plans to expand its sales and marketing capabilities and may consider acquisitions in the future[16] - The company has experienced 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 regarding cash flows[30] - The Company operates primarily through ATIF Inc. following the disposal of ATIF HK and Huaya on May 31, 2022[56] Revenue Concentration - 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, highlighting a high concentration risk[66] - For the nine months ended April 30, 2023, four customers accounted for 28%, 28%, 26%, and 17% of the company's consolidated revenue, compared to two customers accounting for 63% and 32% in the same period in 2022[67] - The company plans to transition its consulting services from PRC-based customers to more international customers to mitigate revenue concentration risks[69] Legal Matters - Boustead's litigation against the Company is currently in the pleadings stage, with the Company believing it is premature to predict the outcome[109] - The United States District Court for the Southern District of New York granted the Company's motion to dismiss Boustead's first amended complaint on August 25, 2021[107] - Boustead filed a second amended complaint on December 28, 2021, alleging only breach of contract[107] - The Court denied the Company's motion to dismiss the second amended complaint on July 6, 2022[108] - The Company filed a motion to compel arbitration of Boustead's claims in California on August 3, 2022, with briefing concluding on August 23, 2022[108] - Boustead is seeking a default judgment against LGC, but the Court has not ruled on this request[108] - The Company filed a motion to dismiss Boustead's second amended complaint on January 18, 2022[107] - Boustead's amended complaint asserts the same four causes of action against the Company and LGC as its original complaint[106] - The Court allowed Boustead to amend its causes of action against the Company regarding breach of contract and tortious interference[107] - The Company is currently evaluating its response to Boustead's motion for leave[109] Depreciation and Amortization - Depreciation and amortization expenses for the nine months ended April 30, 2023, were $109,967, compared to $136,516 for the same period in 2022[23] - Depreciation expense for the three months ended April 30, 2023, was $16,656, compared to $13,765 for the same period in 2022, indicating an increase in asset depreciation[76] - The company's intangible assets as of April 30, 2023, were valued at $93,331, down from $153,331 as of July 31, 2022, reflecting a decrease in intangible asset value[77] Lease Obligations - Operating lease expenses for the three months ended April 30, 2023, were $121,655, compared to $101,580 for the same period in 2022, representing an increase of approximately 19.9%[83] - Total lease cost for the nine months ended April 30, 2023, was $181,414, a decrease of 51.4% from $372,820 in the same period of 2022[83] - Right-of-use assets, net, decreased to $1,170,495 as of April 30, 2023, from $1,383,464 as of July 31, 2022, reflecting a decline of approximately 15.4%[85] - Total operating lease liabilities decreased to $1,225,937 as of April 30, 2023, from $1,418,310 as of July 31, 2022, a reduction of about 13.5%[85] - The weighted average remaining lease term as of April 30, 2023, was 3.48 years, down from 3.95 years as of July 31, 2022[86] - The total future minimum rentals under non-cancellable operating lease arrangements as of April 30, 2023, were $193,459, with $64,486 due for the three months ending July 31, 2023[86]