Financial Performance - Total revenue for the year ended December 31, 2023 was $1,431,088, a decrease of $425,476 or approximately 22.9% from $1,856,564 in 2022[169] - Revenue from the network marketing business decreased significantly by $741,641 or approximately 65.2%, while revenue from complementary health therapies increased by $317,888 or approximately 44.4%[170] - Cost of revenue for 2023 was $494,516, approximately 34.6% of revenue, down from $666,042 or 35.9% in 2022, representing a decrease of $171,526 or approximately 25.8%[171] - Gross profit for 2023 was $936,572, with a gross margin of approximately 65.4%, compared to $1,190,522 and a gross margin of approximately 64.1% in 2022[173] - The company recorded a net loss of $2,109,935 for the year ended December 31, 2023, an increase of $443,856 or approximately 26.6% from the net loss of $1,666,079 in 2022[180] - Other income for 2023 was $40,219, a significant change from net other expenses of $136,868 in 2022, mainly due to unrealized holding gains on marketable securities[178] Expenses - Selling expenses increased by $267,589 or approximately 74.0% to $629,003 in 2023, primarily due to increased promotional expenses[174] - Commission expenses decreased significantly by $317,219 or approximately 78.3% to $88,132 in 2023, due to reduced revenue from the network marketing business[175] - General and administrative expenses increased by $408,993 or approximately 20.9% to $2,366,016 in 2023, driven by increased salaries and operational growth in complementary health therapies[176] Cash Flow and Working Capital - Net cash used in operating activities for 2023 was $2,001,823, significantly higher than $811,683 in 2022[188] - The company reported a net change in cash and cash equivalents of $3,394,030 for 2023, a significant improvement from a decrease of $1,159,418 in 2022[187] - As of December 31, 2023, the company reported working capital of $4,113,614, an increase from $799,239 as of December 31, 2022[186] - The company had net cash provided by financing activities of $5,398,037 in 2023, compared to a net cash used of $234,466 in 2022[191] Market and Operational Strategy - The company plans to expand into Asian markets, focusing on Thailand, Indonesia, and Taiwan, leveraging e-commerce for growth[185] - The company has modified its operations to manage inventory effectively amid potential supply chain disruptions due to COVID-19[183] - There is uncertainty regarding the financial impact of COVID-19, with no guarantee of revenue growth in 2024 and beyond[185] - The company recognized no inventory write-downs for 2023, compared to $5,307 in 2022[194] Regulatory and Accounting Updates - In July 2023, the FASB issued ASU No. 2023-03, which amends various SEC paragraphs but did not significantly impact the company's consolidated financial statements[208] - In October 2023, the FASB issued ASU No. 2023-06, aimed at improving disclosure requirements, with no expected significant impact on the company's consolidated financial statements[209] - In November 2023, the FASB issued ASU 2023-07 to enhance reportable segment disclosures, effective for annual reporting periods beginning after December 15, 2023[211] - In December 2023, the FASB issued ASU 2023-09, requiring specific disclosures in rate reconciliation, effective for annual reporting periods beginning after December 15, 2024[212] - The company adopted ASU No. 2019-10, effective January 1, 2023, with no material impact on consolidated financial statements for the year ended December 31, 2023[213] Risk Management - The company does not believe it has significant direct foreign exchange risk, as most revenues and expenses are denominated in Malaysian Ringgit[214] - Credit risk is mitigated by the company's ongoing credit evaluation process and relatively short collection terms, with no general requirement for collateral from customers[215]
Agape ATP (ATPC) - 2023 Q4 - Annual Report