Agape ATP (ATPC) - 2024 Q1 - Quarterly Report

Revenue Performance - Revenue for Q1 2024 was $318,643, a decrease of$62,124 or approximately 16.3% compared to $380,767 in Q1 2023, primarily due to a significant decline in network marketing revenue [191]. - Network marketing revenue decreased by$101,780 or approximately 73.3%, while revenue from complementary health therapies increased by $39,656 or approximately 16.4$203,420, with a gross margin of 63.8%, down from $252,408 and a gross margin of 66.3$703,094, an increase of $269,019 from a net loss of$434,075 in Q1 2023 [200]. Expenses - General and administrative expenses increased by $271,013 or approximately 45.5$867,266 in Q1 2024, mainly due to salaries and professional fees [197]. - Cost of revenue for Q1 2024 was $115,223, a decrease of$13,136 or approximately 10.2% from $128,359 in Q1 2023 [192]. Cash Flow - Net cash used in operating activities for Q1 2024 was$1,243,460, compared to $272,555 in Q1 2023 [203]. - Net cash used in financing activities for Q1 2024 was$899, a significant reduction from $6,961 in Q1 2023 due to the payment of deferred offering costs [206]. Working Capital and Assets - The company had working capital of$3,428,530 as of March 31, 2024, down from $4,113,614 as of December 31, 2023 [201]. - As of March 31, 2024, the carrying amounts of operating right-of-use assets and property, plant and equipment were$314,390 and $63,080, respectively, compared to$41,593 and $160,480 as of March 31, 2023 [210]. Other Income and Financial Condition - Net other income for Q1 2024 was$27,282, a significant increase of $11,689 or approximately 75.0$15,593 in Q1 2023 [198]. - The Company has no significant off-balance sheet arrangements that could materially affect its financial condition as of March 31, 2024 [206]. - The Company does not have any credit facilities or access to bank credit [206]. Revenue Recognition and Accounting Policies - The Company recognizes revenue from sales of health and wellness products at the point of transfer to customers, net of estimated discounts and returns [215]. - The Company has adopted ASU No. 2023-01 regarding leases, effective for reporting periods beginning after December 15, 2023, with no material impact on financial statements for Q1 2024 [221]. - The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements, effective after December 15, 2023 [222]. Risk Management - The Company has not hedged exposures denominated in foreign currencies, limiting direct foreign exchange risk [227]. - The Company evaluates the need for an allowance for doubtful accounts based on credit risk factors, historical trends, and other information [228]. - No inventory write-downs or write-offs were recognized for the three months ended March 31, 2024 and 2023 [208]. Future Outlook - The company is in the process of introducing a new range of products for its network marketing business to enhance revenue potential [191].