Revenue and Growth - Total revenue from consulting services increased to $1.6 million for the year ended July 31, 2022, compared to $0.9 million for the year ended July 31, 2021, representing a growth of approximately 78%[274] - Total revenue increased by $730,375, or 78%, from $936,935 in fiscal year 2021 to $1,667,310 in fiscal year 2022, primarily due to the completion of more phases of consulting services[283] - Revenue from related parties was $762,000, contributing significantly to the overall revenue growth[283] - The company anticipates limited revenue growth from consulting services due to tightened U.S. legislation affecting IPOs by small Chinese companies[285] Client Base and Market Strategy - The company provided consulting services to three customers in both fiscal years 2022 and 2021, indicating a stable client base despite external challenges[273] - The company plans to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, to diversify its client base[272] - The company has entered into consulting agreements with five new customers since April 2022, four of which are based in North America, indicating a strategic focus on this market[273] Financial Performance - Gross profit for fiscal year 2022 was $1,007,310, an increase of $70,375, or 8%, compared to the previous year[283] - Selling expenses rose by $130,355, or 30%, from $439,174 in fiscal year 2021 to $569,529 in fiscal year 2022[287] - General and administrative expenses decreased by $268,314, or 9%, from $2,919,675 in fiscal year 2021 to $2,651,361 in fiscal year 2022[288] - The net loss for fiscal year 2022 was $3,371,099, a decrease of $5,629,149, or 63%, from a net loss of $9,000,248 in fiscal year 2021[293] Investment and Cash Flow - The establishment of ATIF-1, LP as a private equity fund managed approximately $1.3 million in assets under management as of July 31, 2022, down from $4.8 million in 2021[266] - Net cash used in operating activities was $0.1 million for the fiscal year ended July 31, 2022, primarily due to a net loss of $3.4 million and an increase in accounts receivable of $0.8 million[302] - Net cash used in investing activities was $1.6 million in fiscal year 2022, mainly from the purchase of investments totaling $1.7 million, offset by $0.2 million from the disposal of property and equipment[305] - Net cash used in financing activities was $2.0 million in fiscal year 2022, primarily due to a payment of $3.0 million to limited partners, partially offset by proceeds of $1.1 million from warrant exercises[306] - Cash at the end of the year was $1,750,137, a significant decrease from $5,596,740 at the beginning of the year[301] Market Challenges - The trade disputes between China and the U.S. have negatively impacted customer confidence, leading to a low volume of new consulting service customers[276] - The company has faced intense market competition, with competitors having more resources, which may impact future growth[278] - The company relies heavily on attracting and retaining key personnel to sustain growth and maintain core competencies in financial consulting[280] Tax and Valuation - The total valuation allowance for deferred tax assets increased from $997,378 in 2021 to $1,668,413 in 2022, indicating a belief that certain subsidiaries may not generate sufficient taxable income in the near future[312] - The company did not have any significant unrecognized uncertain tax positions as of July 31, 2022, and 2021[313] Investment Losses - Loss from investment in trading securities increased significantly to $2,432,107 in fiscal year 2022 from $258,738 in fiscal year 2021, representing an increase of 840%[289] - The company reported a loss of $2,432,107 from investments in trading securities for the year ended July 31, 2022, compared to a loss of $258,738 in 2021[314]
ATIF (ATIF) - 2022 Q4 - Annual Report