Agape ATP (US:ATPC)2021-11-11 16:00Financial Performance - Revenue for the three months ended September 30, 2021, was $201,284, a significant decrease of $1,211,779 or approximately 85.8% compared to $1,413,063 for the same period in 2020[196] - Cost of revenue for the three months ended September 30, 2021, was $36,663, down $150,228 or approximately 80.4% from $186,891 in the same period in 2020[197] - Gross profit for the three months ended September 30, 2021, was $164,621, a decrease from $1,226,172 in the same period in 2020, with a gross margin of approximately 81.8% compared to 86.8%[198] - The company incurred a net loss of $571,265 for the three months ended September 30, 2021, compared to a net income of $415,037 for the same period in 2020, a decrease of $986,302[205] - Revenue for the nine months ended September 30, 2021, was $806,850, a decrease of $2,130,075 or approximately 72.5% compared to $2,936,925 for the same period in 2020[206] - Cost of revenue for the nine months ended September 30, 2021, was $149,877, down $508,568 or approximately 77.2% from $658,445 in the same period in 2020[207] - Gross profit for the nine months ended September 30, 2021, was $656,973, a decrease from $2,278,480 in the same period in 2020, with a gross margin of approximately 81.4% compared to 77.6%[208] - The company recorded a net loss of $1,547,140 for the nine months ended September 30, 2021, compared to a net income of $270,527 in the same period of 2020[218] Expenses - Selling expenses for the nine months ended September 30, 2021, amounted to $299,806, an increase of $31,158 or approximately 11.6% compared to $268,648 for the same period in 2020[210] - Commission expenses for the three months ended September 30, 2021, were $76,817, a significant decrease of $224,140 or approximately 74.5% from $300,957 in the same period in 2020[200] - General and administrative expenses for the three months ended September 30, 2021, were $369,946, an increase of $14,672 or approximately 4.1% compared to $355,274 for the same period in 2020[202] - Commission expenses decreased by $425,425 or approximately 62.2% to $258,030 for the nine months ended September 30, 2021, compared to $683,455 in the same period of 2020[211] - General and administrative (G&A) expenses increased by $64,990 or approximately 6.3% to $1,094,042 for the nine months ended September 30, 2021, compared to $1,029,052 in the same period of 2020[212] - Provision for doubtful accounts increased significantly by $121,686 or 100.0% to $121,686 for the nine months ended September 30, 2021, compared to $0 in the same period of 2020[215] - Other expenses netted $435,089 for the nine months ended September 30, 2021, a decrease of $600,299 or approximately 363.4% compared to $165,210 in the same period of 2020[216] Cash Flow and Working Capital - Working capital decreased to $3,307,503 as of September 30, 2021, from $4,645,729 as of December 31, 2020[224] - Net cash used in operating activities was $541,440 for the nine months ended September 30, 2021, compared to $743,670 in the same period of 2020[228] - Net cash used in investing activities was $3,970 for the nine months ended September 30, 2021, compared to net cash provided of $1,276,114 in the same period of 2020[230] Revenue Recognition - The Company recognizes revenue from health and wellness product sales at a point in time when control is transferred to customers, with historically insignificant sales returns[239] - Revenue from coupon sales is recorded as customer deposits until applied, with a validity period of six months; unutilized coupons after this period are recognized as net revenues[240] - The Company derives revenue from its Wellness program, with separate performance obligations for health screening tests and health camp programs, recognized upon completion of services[240] - The Company recognizes revenue from health services when test reports are delivered and health camp programs are completed[240] 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[243] - The Company does not currently hedge foreign exchange risks, as most revenues are in U.S. dollars while expenses are in Malaysian Ringgit and Hong Kong Dollar[248] - Credit risk is mitigated through ongoing credit evaluations and relatively short collection terms, with no general requirement for collateral from customers[249] - The Company is evaluating the impact of ASU 2019-05 on its financial statements, effective January 1, 2023, which introduces expected credit losses methodology[243] - The adoption of ASU 2020-01 on January 1, 2021, did not have a material impact on the Company's financial statements[245] - The Company has reviewed recent accounting pronouncements and does not expect material impacts on its financial condition or operations[243] Future Outlook - The company anticipates expanding into Asian markets, focusing on Thailand, Indonesia, and Taiwan, leveraging e-commerce for growth[223] - As of September 30, 2021, the company had no significant off-balance sheet arrangements that could materially affect its financial condition[233]