Agape ATP (US:ATPC)2023-03-30 16:00Revenue and Growth - For the year ended December 31, 2022, the company generated revenue of $1,856,564, a significant increase of approximately 82.6% compared to $1,016,962 in 2021, primarily due to recovery from COVID-19 and expansion in complementary health therapies [205]. - Revenue from the network marketing business was $1,141,307, accounting for approximately 61.5% of total revenue, while revenue from complementary health therapies was $715,257, representing approximately 38.5% [205]. - Management projects that the company's revenue will revert to pre-pandemic levels, generating sufficient cash to cover operating expenses [220]. Costs and Expenses - The cost of revenue for 2022 was $666,042, reflecting a 124.0% increase from $297,333 in 2021, in line with the revenue growth [207]. - Gross profit for 2022 was $1,190,522, with a gross margin of approximately 64.1%, down from 70.8% in 2021, attributed to lower margins in complementary health therapies [208]. - Commission expenses increased by approximately 28.2% to $405,351 in 2022, compared to $316,267 in 2021, aligning with revenue growth [211]. - General and administrative expenses rose by approximately 12.1% to $1,957,023 in 2022, up from $1,745,734 in 2021, mainly due to costs associated with complementary health therapies [211]. Net Loss and Financial Position - The company recorded a net loss of $1,666,079 for the year ended December 31, 2022, a decrease of approximately 34.0% from a net loss of $2,524,680 in 2021 [216]. - As of December 31, 2022, the company had working capital of $799,239, a decrease from $2,599,281 in 2021, with cash and cash equivalents of $523,619 [220]. - The total net change in cash and cash equivalents for 2022 was $(1,159,418), compared to $(919,752) in 2021, indicating a worsening liquidity position [222]. Cash Flow Activities - Net cash used in operating activities for 2022 was $811,683, a decrease from $845,842 in 2021, primarily due to a net loss of $1,666,079 [223]. - The company incurred a net cash used in investing activities of $32,119 in 2022, significantly higher than $3,959 in 2021, entirely for the purchase of equipment and intangible assets [225]. - Net cash used in financing activities for 2022 was $234,466, compared to $19,061 in 2021, primarily for the payment of deferred offering costs [226]. Inventory and Assets - The company recognized inventory write-downs of $5,307 in 2022, a decrease from $36,241 in 2021, reflecting improved inventory management [231]. - The carrying amounts of operating right-of-use assets and property, plant, and equipment as of December 31, 2022, were $81,133 and $142,149, respectively [233]. Liquidity and Credit Risk - The company does not have any credit facilities or access to bank credit, indicating potential liquidity constraints [227]. - The company has no significant off-balance sheet arrangements that could materially affect its financial condition as of December 31, 2022 [228]. - The company evaluates the need for an allowance for doubtful accounts based on credit risk factors and historical trends, mitigating credit risk in trade receivables [248]. Market Expansion - The company plans to expand into Asian markets, focusing on Thailand, Indonesia, and Taiwan, leveraging e-commerce for growth [219]. Foreign Exchange and Risk Management - The company operates primarily in Malaysian Ringgit, with no significant direct foreign exchange risk identified [247].