Agape ATP (ATPC) - 2021 Q2 - Quarterly Report

Revenue and Profit - Revenue for the three months ended June 30, 2021, was $303,786, a significant decrease of $1,220,076 or approximately 80.1% compared to $1,523,862 for the same period in 2020 due to COVID-19 lockdowns in Malaysia [194]. - Gross profit for the three months ended June 30, 2021, was $268,163, with a gross margin of approximately 88.3%, compared to a gross profit of $1,052,308 and a margin of approximately 69.1% for the same period in 2020 [196]. - Revenue for the six months ended June 30, 2021, was $605,566, a decrease of $918,296 or approximately 60.3% compared to $1,523,862 for the same period in 2020, despite full revenue contribution from ASL [204]. - Gross profit for the six months ended June 30, 2021, was $492,352, with a gross margin of approximately 81.3%, compared to $1,052,308 and a margin of approximately 69.1% for the same period in 2020 [208]. - The company incurred a net loss of $642,225 for the three months ended June 30, 2021, compared to a net income of $87,240 for the same period in 2020, a decrease of $729,465 [203]. - Net loss increased to $975,875 for the six months ended June 30, 2021, from a net loss of $144,510 for the same period in 2020, reflecting an increase of $831,365 [217]. Expenses - Operating expenses for the three months ended June 30, 2021, were $655,188, a decrease of $152,862 or approximately 29.7% compared to $808,050 for the same period in 2020, primarily due to reduced professional fees after the acquisition of ASL [199]. - Selling expenses for the six months ended June 30, 2021, amounted to $216,952, an increase of $107,596 or approximately 98.4% compared to $109,356 for the same period in 2020 [209]. - Commission expenses for the six months ended June 30, 2021, were $181,213, a significant decrease of $201,285 or 52.6% compared to $382,498 for the same period in 2020 [210]. - General and administrative (G&A) expenses for the six months ended June 30, 2021, increased by approximately 7.5% to $724,008 from $673,778 for the same period in 2020 [211]. - Other expenses for the six months ended June 30, 2021, amounted to $214,277, a significant decrease of approximately 308.3% compared to $102,881 in other income for the same period in 2020 [215]. Cash Flow and Working Capital - Working capital as of June 30, 2021, was $3,747,830, down from $4,645,729 as of December 31, 2020, indicating a decrease of approximately 19.3% [223]. - Net cash used in operating activities for the six months ended June 30, 2021, was $134,748, a significant improvement compared to $780,664 for the same period in 2020 [227]. - Net cash used in investing activities for the six months ended June 30, 2021, was $1,220, compared to $1,280,991 provided by investing activities in the same period of 2020 [229]. - Net cash used in financing activities for the six months ended June 30, 2021, was $16,588, compared to $140,837 provided by financing activities in the same period of 2020 [231]. Provisions and Tax - The company recorded a provision for doubtful accounts of $121,686 for the three months ended June 30, 2021, a significant increase of 100.0% compared to $0 for the same period in 2020 [200]. - The company recorded a provision for income taxes of $10,091 for the six months ended June 30, 2021, compared to $134,067 for the same period in 2020 [216]. Business Operations and Market Expansion - The company anticipates expanding into Asian markets, focusing on Thailand, Indonesia, and Taiwan, primarily through e-commerce [222]. - The Company sells coupons to customers at a discounted price, with cash proceeds recognized as customer deposits until utilized, and forfeited sales value recognized as net revenues after six months [238]. - Revenues from Health and Wellness services are recognized when health screening test reports are completed and delivered, and upon completion of health camp programs [238]. Financial Instruments and Risks - Financial instruments in current assets and liabilities are reported at face value or cost, approximating fair value due to short realization periods [240]. - The Company does not expect recent accounting pronouncements to materially impact its financial condition or results of operations [240]. - The Company has not hedged foreign exchange risks, as most revenues are in U.S. dollars while expenses are in Malaysian Ringgit and Hong Kong Dollar [246]. - Credit risk is mitigated by ongoing credit evaluations and short collection terms, with no collateral generally required from customers [247].