Agape ATP (ATPC) - 2022 Q2 - Quarterly Report

Revenue Performance - Revenue for the three months ended June 30, 2022, was $396,707, an increase of $92,921 or approximately 30.6% compared to $303,786 for the same period in 2021, primarily driven by the provision of complementary health therapies contributing approximately 54% of total revenue [189]. - Revenue for the six months ended June 30, 2022, was $805,667, an increase of $200,101 or approximately 33.0% compared to $605,566 for the same period in 2021, driven by sales of complementary health therapies [199]. Cost and Profitability - Cost of revenue for the three months ended June 30, 2022, was $109,383, a significant increase of $73,760 or approximately 207.1% from $35,623 in the same period of 2021, due to higher costs associated with complementary health therapies [190]. - Gross profit for the three months ended June 30, 2022, was $287,324, with a gross margin of approximately 72.4%, down from a gross margin of approximately 88.3% in the same period of 2021 [191]. - Cost of revenue for the six months ended June 30, 2022, was $182,814, an increase of $69,600 or approximately 61.5% from $113,214 in the same period of 2021 [200]. - Gross profit for the six months ended June 30, 2022, was $622,853, with a gross margin of approximately 77.3%, down from approximately 81.3% in the same period of 2021 [201]. Expenses and Losses - General and administrative expenses for the three months ended June 30, 2022, increased by $89,501 or approximately 24.7% to $451,363, mainly due to expenses related to complementary health therapies [194]. - General and administrative expenses for the six months ended June 30, 2022, increased by $106,396 or approximately 14.7% to $830,404, primarily due to expenses related to complementary health therapies [203]. - Net loss for the three months ended June 30, 2022, was $404,344, a reduction of $237,881 from a net loss of $642,225 in the same period of 2021 [198]. - Net loss for the six months ended June 30, 2022, was $702,790, a decrease of $273,085 from a net loss of $975,875 in the same period of 2021 [206]. Financial Position - As of June 30, 2022, the company had working capital of $1,753,170, down from $2,599,281 as of December 31, 2021 [213]. - The accumulated deficit increased to $3,972,684 as of June 30, 2022, compared to $3,258,687 as of December 31, 2021 [214]. - Net cash used in operating activities for the six months ended June 30, 2022 was $493,326, compared to $134,748 for the same period in 2021 [216][218]. - The company reported a net cash used in financing activities of $178,926 for the six months ended June 30, 2022, compared to $16,588 in the same period of 2021 [220]. - Total cash and cash equivalents decreased by $790,411 for the six months ended June 30, 2022, compared to a decrease of $216,800 in the same period of 2021 [216]. Market Expansion and Future Projections - The company anticipates expanding into Asian markets, focusing on Thailand, Indonesia, and Taiwan, leveraging e-commerce for growth [212]. - The company is projecting revenue to revert to pre-pandemic levels and expects growth from new sectors in health and wellness [214]. Risk Management - The company does not have any credit facilities or access to bank credit as of June 30, 2022 [221]. - The Company does not currently have significant direct foreign exchange risk, as most revenues are in Malaysian Ringgit and expenses in U.S. dollars, Malaysian Ringgit, and Hong Kong Dollar [234]. - The Company has not hedged exposures denominated in foreign currencies or other derivative financial instruments [234]. - Credit risk is primarily associated with accounts receivable, but is mitigated by an ongoing credit evaluation process and short collection terms [235]. - The Company does not generally require collateral from customers, relying instead on credit evaluations and historical trends [235]. Accounting Standards - The Company is classified as an emerging growth company (EGC) under the JOBS Act and has elected an extended transition period for new accounting standards [231]. - ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023, as it qualifies as a smaller reporting company [232]. - There are no new accounting standards expected to have a material impact on the consolidated financial position or cash flows [232]. - The Company has no significant off-balance sheet arrangements that could materially affect its financial condition as of June 30, 2022 [221].