Revenue Performance - For the three months ended March 31, 2025, the company generated revenue of $289,037, a decrease of approximately 9.3% compared to $318,643 for the same period in 2024[234]. - Revenue from the company's network marketing business decreased by $10,532 or approximately 28.4%, while revenue from complementary health therapies decreased by $29,318 or approximately 10.4%[234]. Cost and Profitability - Cost of revenue increased by $17,528 or approximately 15.2%, amounting to $132,751 for the three months ended March 31, 2025[236]. - Gross profit for the three months ended March 31, 2025 was $156,286, representing a gross margin of 54.1%, down from 63.8% in the same period of 2024[239]. - Selling expenses increased by $12,704 or approximately 25.2%, totaling $63,052 for the three months ended March 31, 2025[241]. - Net loss increased by $9,825, resulting in a net loss of $712,919 for the three months ended March 31, 2025, compared to a net loss of $703,094 for the same period in 2024[247]. Cash Flow and Working Capital - As of March 31, 2025, the company had working capital of $23,775,576, significantly up from $1,656,571 as of December 31, 2024[248]. - Net cash used in operating activities for the three months ended March 31, 2025 was $1,453,874, compared to $1,243,460 for the same period in 2024[249]. - Net cash used in investing activities for the three months ended March 31, 2025 was $23,000,649, primarily from advances for investment[252]. - Net cash provided by financing activities for the three months ended March 31, 2025 was $22,994,658, compared to a net cash used of $899 in the same period of 2024[255]. Asset Management - As of March 31, 2025, the allowance for credit loss was recognized at $41,360, an increase from $32,857 as of December 31, 2024, reflecting a growth of approximately 25.3%[264]. - The carrying amounts of operating right-of-use assets were $189,059 as of March 31, 2025, down from $224,595 as of December 31, 2024, indicating a decrease of about 15.8%[261]. - The Company recorded inventory write-offs of $6,777 for the three months ended March 31, 2025, compared to $0 for the same period in 2024[259]. - The Company has not recognized any impairment losses on operating right-of-use assets and property, plant, and equipment as of March 31, 2025[261]. Revenue Recognition and Accounting Policies - The Company’s revenue recognition follows the five-step model under ASC Topic 606, ensuring that revenue reflects the transfer of goods and services to customers[268]. - The Company’s sales of skin care, health, and wellness products are recognized when control is transferred to the customer, with a return period of 60 days[271]. - The Company evaluates the need for an allowance for credit loss based on ongoing credit evaluations and current economic conditions[291]. - The Company has not hedged exposures denominated in foreign currencies, limiting direct foreign exchange risk[290]. - The adoption of ASU 2023-07 regarding segment reporting is expected to have no material impact on the consolidated financial statements[280]. Equity and Financing - The Company issued Representative's Warrants to purchase up to 115,500 shares at $4.4 per share, effective from October 13, 2023[266].
Agape ATP (ATPC) - 2025 Q1 - Quarterly Report