Filed 2025-03-31 · Period ending 2024-12-31 · 56,078 words · SEC EDGAR
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# Agape ATP Corp (ATPC) — 10-K **Filed:** 2025-03-31 **Period ending:** 2024-12-31 **Accession:** 0001641172-25-001611 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1713210/000164117225001611/) **Origin leaf:** 95384ceaf848d571cb6ac76f90a670f74dd2bf15b9cd29675511366099b46818 **Words:** 56,078 --- ** UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **FORM 10-K** | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | **For The Fiscal Year Ended December 31, 2024** **or** | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | **For the transition period from _____________________________** **Commission File Number 001-41835** **AGAPE ATP CORPORATION** (Exact name of registrant issuer as specified in its charter) | Nevada | | 36-4838886 | | | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | | **1705 1708, Level 17, Tower 2, Faber Towers, Jalan Desa Bahagia,** **Taman Desa, 58100 Kuala Lumpur, Malaysia.** (Address of principal executive offices, including zip code) Registrants phone number, including area code **(60) 192230099** Securities registered pursuant to Section 12(b) of the Securities Exchange Act: **Common Stock, $0.0001 par value** (Title of Class) **Nasdaq Capital Market** (Name of exchange on which registered) **ATPC** (Ticker Symbol) Securities registered pursuant to Section 12(g) of the Securities Exchange Act: **None** Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES NO Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files). YES NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large Accelerated Filer Accelerated Filer Non-accelerated Filer Smaller reporting company If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No Emerging growth Company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. The aggregate market value of the Companys common stock held by non-affiliates computed by reference to the closing bid price of the Companys common stock, as of the last business day of the registrants most recently completed first fiscal quarter: $4,707,086. Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. | Class | | Outstanding at March 28, 2025 | | | Common Stock, $0.0001 par value | | 50,005,381 | | | | | **AGAPE ATP CORPORATION** **FORM 10-K** **For the Fiscal Year Ended December 31, 2024** **Index** | | | Page # | | | PART I | | | | | | | | | | Item 1. | Business | 4 | | | Item 1A. | Risk Factors | 12 | | | Item 1B. | Unresolved Staff Comments | 23 | | | Item 2. | Properties | 23 | | | Item 3. | Legal Proceedings | 23 | | | Item 4. | Mine Safety Disclosure | 23 | | | | | | | | PART II | | | | | | | | | | Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 24 | | | Item 6. | Selected Financial Data | 24 | | | Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 25 | | | Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 34 | | | Item 8. | Financial Statements and Supplementary Data | 35 | | | Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 35 | | | Item 9A. | Controls and Procedures | 35 | | | Item 9B. | Other Information | 37 | | | | | | | | PART III | | | | | | | | | | Item 10. | Directors, Executive Officers and Corporate Governance | 38 | | | Item 11. | Executive Compensation | 43 | | | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 44 | | | Item 13. | Certain Relationships and Related Transactions, and Director Independence | 45 | | | Item 14. | Principal Accounting Fees and Services | 51 | | | | | | | | PART IV | | | | | | | | | | Item 15. | Exhibits, Financial Statement Schedules | 52 | | | | | | | | SIGNATURES | 53 | | | 2 | | **CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS** *This Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as anticipate, expect, intend, plan, believe, foresee, estimate and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:* | | | The availability and adequacy of our cash flow to meet our requirements; | | | | | | | | | | Economic, competitive, demographic, business and other conditions in our local and regional markets; | | | | | | | | | | Changes or developments in laws, regulations or taxes in our industry; | | | | | | | | | | Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities; | | | | | | | | | | Competition in our industry; | | | | | | | | | | The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business; | | | | | | | | | | Changes in our business strategy, capital improvements or development plans; | | | | | | | | | | The availability of additional capital to support capital improvements and development; and | | | | | | | | | | Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC. | | *This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.* **Use of Defined Terms** Except as otherwise indicated by the context, references in this Report to: | | | The Company, we, us, or our, Agape are references to Agape ATP Corporation, a Nevada corporation. | | | | | | | | | | Common Stock refers to the common stock, par value $0.0001, of the Company; | | | | | | | | | | Malaysia is Malaysia; | | | | | | | | | | U.S. dollar, $ and US$ refer to the legal currency of the United States; | | | | | | | | | | RM and Ringgit are to the legal currency of Malaysia; | | | | | | | | | | Securities Act refers to the Securities Act of 1933, as amended; and | | | | | | | | | | Exchange Act refers to the Securities Exchange Act of 1934, as amended. | | | 3 | | **PART I** **ITEM 1. BUSINESS** **1. ORGANIZATION AND BUSINESS BACKGROUND** Agape ATP Corporation, a Nevada corporation (the Company) was incorporated under the laws of the State of Nevada on June 1, 2016. Agape ATP Corporation operates through its subsidiaries, namely, Agape ATP Corporation (AATP LB), a company incorporated in Labuan, Malaysia, and Agape Superior Living Sdn. Bhd. (ASL), a company incorporated in Malaysia. AATP LB, incorporated in Labuan, Malaysia, is an investment holding company with 100% equity interest in Agape ATP International Holding Limited (AATP HK), a company incorporated in Hong Kong. On May 8, 2020, the Company entered into a Share Exchange Agreement with Mr. How Kok Choong, CEO and director of the Company to acquire 9,590,596 ordinary shares, no par value, equivalent to approximately 99.99% of the equity interest in Agape Superior Living Sdn. Bhd., a network marketing entity incorporated in Malaysia. ASL is a limited company incorporated on August 8, 2003, under the laws of Malaysia. On September 11, 2020, the Company incorporated Wellness ATP International Holdings Sdn. Bhd. (WATP), a wholly owned subsidiary under the laws of Malaysia, to pursue the business of promoting wellness and wellbeing lifestyle of the community by providing services that includes online editorials, programs, events and campaigns on how to achieve positive wellness and lifestyle. On July 4, 2024, the entity changed its name to Cedar ATPC Sdn. Bhd. (CEDAR). On November 25, 2024, CEDAR increased its number of ordinary shares to 1,000,000 shares at RM 0.01 per share. On November 11, 2021, AATP LB formed an entity, DSY Wellness International Sdn. Bhd. (DSY Wellness) with an independent third party which AATP LB owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The Company and its subsidiaries are principally engaged in the Health and Wellness Industry. The principal activity of the Company is to supply high-quality health and wellness products, including supplements to assist in cell metabolism, detoxification, blood circulation, anti-aging and products designed to improve the overall health system of the human body and various wellness programs. The Company is positioning itself for sustainable growth by diversifying its operations into the domain of renewable energy. This initiative is founded upon our commitment to environmental responsibility, long-term value creation, and proactive adaptation to global energy trends. On January 3, 2024, the Company formed an equity method investment entity, OIE ATPC Holdings (M) Sdn. Bhd. with Oriental Industries Enterprise (M) Sdn. Bhd. (OIE), which the Company and OIE each own 50% of the equity interest. On March 14, 2024, the Company acquired 50% of OIE ATPC Holdings (M) Sdn. Bhd. equity interest from OIE, subsequently the entity becomes a wholly owned subsidiary of the Company. On June 7, 2024, the entity changed its name to ATPC Green Energy Sdn. Bhd (AGE). On September 19, 2024, AGE increased its number of ordinary shares to 1,000,000 shares at RM 0.01 per share. On January 8, 2024, AGE formed a wholly own entity, OIE ATPC Exim (M) Sdn. Bhd (ATPC Exim). However, the Company had decided not to proceed with the continued development of ATPC Exim. There is no impact to the Groups operation. On December 25, 2024, the Company incorporated ATPC Technology Private Limited (ATPC Tech) in China, a wholly owned subsidiary in AATP HK to collaborate with local IT expertise to develop comprehensive digital wellness platform that integrates e-commerce, online consultations, chronic disease management, and robust supply chain services catering to ASEAN market. The accompanying consolidated financial statements reflect the activities of the Company, AATP LB, AATP HK, CEDAR, ASL, DSY Wellness, AGE, ATPC Exim, ATPC Tech and its variable interest entity (VIE), Agape S.E.A. Sdn. Bhd. (SEA) (See Note 4). | 4 | | Details of the Companys subsidiaries: | | Subsidiary company name | | Place and date of incorporation | | Particulars of issued capital | | Principal activities | | Proportional of ownership interest and voting power held | | | | | | | | | | | | | | | 1. | Agape ATP Corporation | | Labuan, March 6, 2017 | | 100 shares of ordinary share of US$1 each | | Investment holding | | 100% | | | | | | | | | | | | | | | 2. | Agape ATP International Holding Limited | | Hong Kong, June 1, 2017 | | 1,000,000 shares of ordinary share of HK$1 each | | Wholesaling of health and wellness products; and health solution advisory services | | 100% | | | | | | | | | | | | | | | 3. | Agape Superior Living Sdn. Bhd. | | Malaysia, August 8, 2003 | | 9,590,598 shares of ordinary share of RM1 each | | Health and wellness products and health solution advisory services via network marketing | | 99.99% | | | | | | | | | | | | | | | 4. | Agape S.E.A. Sdn. Bhd. | | Malaysia, March 4, 2004 | | 2 shares of ordinary share of RM1 each | | VIE of Agape Superior Living Sdn. Bhd. | | VIE | | | | | | | | | | | | | | | 5. | Cedar ATPC Sdn. Bhd. (formerly known as Wellness ATP International Holdings Sdn. Bhd.) | | Malaysia, September 11, 2020 | | 100 shares of ordinary share of RM1 each | | The promotion of wellness and wellbeing lifestyle of the community by providing services that includes online editorials, programs, events and campaigns | | 100% | | | | | | | | | | | | | | | 6. | DSY Wellness International Sdn Bhd. | | Malaysia, November 11, 2021 | | 1,000 shares of ordinary share of RM1 each | | Provision of complementary health therapies | | 60% | | | | | | | | | | | | | | | 7. | ATPC Green Energy Sdn. Bhd. (Formerly known as OIE ATPC Holdings (M) Sdn. Bhd.) | | Malaysia, March 14, 2024 | | 1,000,000 shares of ordinary share of RM0.01 each | | Renewable energy | | 100% | | | | | | | | | | | | | | | 8. | OIE ATPC Exim (M) Sdn. Bhd. | | Malaysia, March 14, 2024 | | 1,000 shares of ordinary share of RM1 each | | Renewable energy | | 100% | | | | | | | | | | | | | | | 9. | ATPC Technology Private Limited | | China, December 25, 2024 | | 50,000 shares of ordinary share of CNY1 each | | Digital wellness platform | | 100% | | | 5 | | **Business Overview** We are a provider of health and wellness products and advisory services in the Malaysian market. We pursue our mission of helping people to create health and wealth by providing a financially rewarding business opportunity to distributors and quality products to distributors and customers who seek a healthy lifestyle. We believe the quality of our products coupled with the effectiveness of our distribution network have been the primary reasons for our success and will allow us to pursue future business expansion. In order to further our supply chain, on May 8, 2020, we acquired 99.99% of Agape Superior Living Sdn Bhd, with the goal of securing an established network marketing sales channel that has been in existence in Malaysia for the past 15 years. On September 11, 2020, the Company incorporated Wellness ATP International Holdings Sdn. Bhd., a wholly owned subsidiary in Malaysia, with the aim to pursue the business of promoting wellness and wellbeing lifestyle of the community through the provision of services including online editorials, programs, events and campaigns on how to achieve positive wellness and lifestyle. We currently offer two series of products: ATP Zeta Health Program and E.A.T.S. The ATP Zeta Health Program is a health program designed to assist in the elimination of various diseases caused by environmental pollutants, unhealthy dietary intake and unhealthy lifestyles. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians. The Easy and Tasty Series (E.A.T.S) is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. On November 11, 2021, Agape ATP Corporation (Labuan) formed a joint-venture entity, DSY Wellness International Sdn. Bhd. (DSY Wellness) with Mr. Steve Yap, following which Agape ATP Corporation (Labuan) owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The establishment of DSY Wellness is a further expansion of our business into the health and wellness industry. Mr. Steve Yap readily owns 33 proprietary formulas for treating non-communicable disease which he has agreed to bring into the company for joint commercialization. Mr. Steve Yap also has existing clients receiving traditional complimentary medicine or TCM in Indonesia and China. The Company deems creating public awareness on wellness and wellbeing lifestyle as essential to enhance the provision of its health solution advisory services; and therefore, incorporated CEDAR. Upon its establishment, CEDAR started collaborating with ASL to carry out various wellness programs. To further its reach in the Health and Wellness Industry, on November 11, 2021, AATP LB formed an entity, DSY Wellness with an independent third party which AATP LB owns 60% of the equity interest, to pursue the business of providing complementary health therapies. AGE delivers innovative solutions for sustainability, energy savings and promoting environmental stewardship to achieves energy efficiency and carbon neutrality for a healthier environment. ATPC Technology Private Limited (ATPC Tech) intend to collaborate with local IT expertise to develop comprehensive digital wellness platform that integrates e-commerce, online consultations, chronic disease management, and robust supply chain services catering to ASEAN market. | 6 | | **Our Products** We offer two series of products: (i) ATP Zeta Health Program and (ii) E.A.T.S. in ASL. The ATP Zeta Health Program is a health program designed to promote health and general wellbeing, as well as to prevent diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles. At its core, the ATP Zeta Super Health Program is focused upon biological energy, Adenosine Triphosphate (ATP), at the cellular level. The stimulation of ATP production at the cellular level can increase an individuals metabolic rate in order to promote and maintain normal and healthy functioning of the bodys systems. Our program emphasizes nutrient absorption through the membrane ion channel in order to provide complete and balanced nutrients to improve cellular health. Thus, ATP Zeta Super Health Program provides ionized and high zeta potential (high bioavailability) nutrients to enhance the absorption at the cellular level. The E.A.T.S is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. DSY Wellness provides complementary health therapies based on the health screening test report to prescribe the products and therapies. AGE provides products, technical knowledge and solutions for sustainability, energy savings and promoting environmental stewardship. | 7 | | **Our Business Model** We believe that the direct-selling channel is ideally suited to marketing our products, because sales of health solution and personal care products are strengthened by ongoing personal contact between retail consumers and distributors. This personal contact may enhance consumers nutritional and health education and motivate consumers to begin and maintain wellness and weight management programs. In addition, by using our products themselves, distributors can provide first-hand testimonials of product effectiveness, which can serve as a powerful sales tool. We are focused on building and maintaining our distributor network by offering financially rewarding and flexible career opportunities through the sale of quality, innovative products to health-conscious consumers. We believe the income opportunity provided by our bonus program appeals to a broad cross-section of our members, particularly those seeking to supplement family income, start a home business or pursue entrepreneurial, full and part-time, employment opportunities. Our distributors, who are all independent third parties, profit from selling our products and also earning bonuses through performance of their network group, the establishment of their own network group and the performance of distributors recruited under their own network group. Top performing distributors with their own physical stores may also become stockists of the company, whereby they enjoy benefits such as maintaining a certain amount of the Companys inventory in their store premises, with the requirement that all product sales are monitored through our centralized stock tracking system and accounted back to us. The stockists have the option of returning or exchanging any unsold inventory consigned to them. We enable distributors to maximize their potential by providing a broad array of motivational, educational and support services. We motivate our distributors through our performance-based compensation plan, product-training seminars, workshops and participation in routine promotional activities. We are committed to providing professionally designed educational training materials that our distributors can use to enhance recruitment and to maximize their sales. We conduct several training sessions per year to motivate our distributors. These training events teach our distributors not only how to develop invaluable business-building and leadership skills, but also how to differentiate our products with their consumers, including information sessions presented by in-house nutritional consultants. Our corporate-sponsored training events provide a forum for distributors, who otherwise operate independently, to share ideas with us and each other. In addition, we are also developing an e-marketing and e-trading platform allowing for marketing and trading of products to members, as well as online recruitment of new members and to provide direct sales to customers. We are committed to providing our distributors with quality products to help them increase sales and recruit additional distributors. We leverage our team of in-house nutritional consultants with rich experience gained in the area of nutrition, in collaborating with our customers and clients to understand the health and wellness market via a process of consultative review. This review team is headed by the Head of Product Development. We then communicate our findings and proposals to third-party suppliers to improve formulations, to bring about new products for distributors and members who are ready to market to end-users. We place a strong emphasis on the science of nutrition. We have obtained the appropriate authorizations from the Food Safety and Quality Division, and the National Pharmaceutical Regulatory Agency of the Ministry of Health, Malaysia for all our products. Whenever products are purchased for inventory replenishment, samples are randomly selected from every batch for testing at laboratories registered with the Ministry of Health Malaysia. | 8 | | **Our Customers** **General** We provide health and wellness products and advisory services to health-conscious customers in the Malaysian market. Such customers are able to enjoy membership discounts across all our products by becoming a member. Our distributors enjoy further discounts on all of our products. Besides our three sales branches located in Kuala Lumpur, Johor Bahru and Ipoh, our products are all distributed to customers and members by our distributors networks, which are comprised of three stockists who are also independent distributors, whose store premises are located in two other locations in Malaysia. We believe that our products are particularly well-suited for direct distribution because the sale of health and nutrition products are strengthened by ongoing personal contact between retail customers and distributors. We believe our continued commitment to source quality science-based products will enhance our ability to attract new customer, as well as increase the productivity and retention of our distributors. **Structure of the membership program** Our customers are able to become lifetime members by paying a one-time membership fee with the purchase of specific products. Doing so allows the customer to enjoy membership discounts on all our products. Members who accumulate a predetermined number of purchases are automatically promoted to become a distributor of the Company. Other than helping distributors achieve physical health and wellness through the use of our products, we offer our distributors, who are independent third parties, bonuses based on various performance factors. Distributors are required to maintain a predetermined number of purchases per year in order to maintain their distributor status. Top performing distributors with their own physical stores may also become stockists of the Company, whereby they enjoy benefits such as maintaining a certain amount of the Companys inventory in their store premises. The stockists shall account to the Company for all products sales from their store premises as monitored through the Companys centralized stock tracking system. The stockists shall have the option to either return or exchange the Companys inventory consigned to them that are unsold. The following table sets forth the number of members and distributors at the date indicated: | | | Number of Distributors | | | Number of Members | | | Total Number of Distributors and Members | | | | As at December 31, 2024 | | | 56,465 | | | | 72,193 | | | | 128,658 | | | **Distributors and members earnings** Distributors and members earn profits from the sales of our products to customers. Distributors enjoy additional discounts compared to members, allowing them to earn higher direct profits through the differences in pricing when selling products they bought at distributors prices which are more favorable than members prices to customers. Members are encouraged to build their respective network group. Members are promoted to distributors if they manage to recruit the requisite number of members; and the network group is able to achieve set sales targets. Other than preferential distributor pricing for the purchase of the Companys products, distributors enjoy bonuses from the collective performance of their network group. There are several levels of distributors depending on the size and the collective sales performance of their respective network group. Each level affords bonus benefits in a different form in ascending order. A higher-level distributor will be compensated with higher returns in the form of bonus entitlements. **Distributors and members motivation and training** We believe that motivation, inspiration and training are key elements in the success of sales via network group marketing. Together with our distributors and members, we have established a consistent schedule of gatherings to support those needs. We conduct several training sessions per year to educate and motivate our distributors and members. The training sessions are typically presented by in-house staff with suitable background in nutrition, in order to provide key nutrition information about our products, as well as providing workshops to promote presentation skills to attending participants. | 9 | | **Our Suppliers** All of our products are acquired from related parties and unrelated third parties located in Malaysia, and rebranded by us. Due to the high costs associated with research and development of nutrition and health products, we do not maintain any facilities to produce our products. We have no expenditures or expenses relating to research and development of our product. We leverage our team of in-house nutritional consultants with rich experience gained in the area of nutritionist work, in collaborating with our customers and clients to understand the health and wellness market via a process of consultative review. We then communicate our findings and proposals to third-party suppliers to improve formulations and to bring about new products for distributors and members who are ready to market to end-users. **Quality Control** At present, our products are predominately sold in Malaysia. As the contents and combination of the main ingredients in our ATP Zeta Health Program and E.A.T.S series are categorized as health food rather than medicines or drugs, all of our products require authorization from the Food Safety and Quality Division of the Ministry of Health, Malaysia according to the Food Act 1983 (ACT 281) & Regulations in order to be sold in the country. Accordingly, we have obtained the appropriate authorizations from the Food Safety and Quality Division of the Ministry of Health, Malaysia for all products in our ATP Zeta Health Program and E.A.T.S series. **Inventory** The Company operates a central warehouse at its head office in Kuala Lumpur, Malaysia, which typically maintains an inventory reserve of up to 6 months per product. Inventory is transferred to the Companys sales branches via ordering through the Companys centralized stock tracking system. Stockists of the Company are required to have physical stores, and enjoys the benefit of being able to store certain amount of inventory in their stores for convenience. The stockists shall account to the Company for all products sales from their store premises as monitored through the Companys centralized stock tracking system. The stockists shall have the option to either return or exchange the Companys inventory consigned to them that are unsold. **Seasonality** The Companys business is generally not subject to any seasonality factors. **Warranty** Our products include a customer satisfaction guarantee. Under this guarantee, within 90 days of purchase, any customer who is not satisfied with our product for any reason may return it or any unused portion of it to the distributor from whom it was purchased for a full refund from the Company or credit toward the purchase of another product. Historically, product returns have not been significant. **E-commerce system** In order to facilitate our continued growth and to support distributor activities, we continually invest and upgrade our platforms. In 2019, we invested in an initiative to establish e-commerce through the setup of e-trading of our products on an existing Malaysian e-commerce trading platform. Our e-trading initiative will be actively promoted for online recruitment of new members by existing distributors and to provide direct sales to customers. Once the E-trading platform has provided tangible results in the Malaysia market, we intend to expand the platform to other geographic markets in order to duplicate its success. We also intend to approach online social influencers as part of our marketing strategy to promote our products and our e-commerce platform. | 10 | | **Intellectual Property** We consider trademarks, patents and copyrights to protect our intellectual property rights critical to our success. We are the registered owner of five registered trademarks in Malaysia. We are also the registered owner of domain named agapeatpgroup.com. **Employees** As at December 31, 2024, we had 16 employees (excluding our Directors). The following table sets forth the number of employees by function: | Function | | Number of employees | | | | | | | | | | Senior Management | | | 3 | | | | Business Development Department | | | 2 | | | | Finance Department | | | 4 | | | | Human Resources Department | | | 2 | | | | Operations Department | | | 4 | | | | Technology Infrastructure Department | | | 1 | | | | Total | | | 16 | | | **Insurance** The Employees Social Security Act, 1969, Malaysia mandates employers and employees to make a monthly contribution to the Social Security Organisation, Malaysia, (SOCSO) for any employee who is employed for wages paid under a contract of service or apprenticeship with an employer for the purpose of providing social security protection to employees and their dependents against occupational injuries, including industrial accident, accident during emergency at the employers premises, occupational diseases and commuting accidents. Depending on the monthly wages earned by the employee, employers shall cause to be deducted from the respective employees wages, amounts that ranges between RM0.10 to RM29.75 for monthly wages between RM30 to RM6,000. The employers contribution corresponds to the said rates are between RM0.4 to RM104.15. Rates applicable to both the employee and employer are fixed at the maximum rate of RM29.75 and RM104.15 respectively. Employees who have attained 60 years of age are not required to contribute to the scheme. The employers responsibility towards this group shall be at a reduced rate which ranges between MYR0.30 to RM74.40 for the said wage band. Other than SOCSO, effective January 1, 2018, employees and employers in the private sector are mandated to contribute to an employment insurance system, (EIS) under the Employment Insurance System Act, 2017. Both the employee and employer shall contribute at an equal rate at 0.2% of the employees wages under the scheme, subject to a maximum monthly wage rate of RM6,000. No further contribution to the scheme is required from the employee or the employer for employees who have attained 60 years of age; and employees aged 57 and above who have no prior contributions are exempted. We do not have any third-party liability insurance to cover claims in respect of personal injury or property or environmental damage arising from accidents on our property or relating to our operations. Such insurance is not mandatory according to the laws and regulations of Malaysia. We typically do not require our distributors to purchase insurance regarding their operations. We believe this practice is consistent with customary industry standards. **Regulations** At present, our products are predominately sold in Malaysia. As the contents and combination of the main ingredients in our ATP Zeta Health Program and E.A.T.S. series are categorized as health food rather than medicines or drugs, all of our products require authorization from the Food Safety and Quality Division of the Ministry of Health, Malaysia according to the Food Act 1983 (ACT 281) & Regulations in order to be sold in the country. Accordingly, we have obtained the appropriate authorizations from the Food Safety and Quality Division of the Ministry of Health, Malaysia for all products in our ATP Zeta Health Program and E.A.T.S series. | 11 | | **ITEM 1A. RISK FACTORS** **We are exposed to concentration risk of heavy reliance on our two largest suppliers for the supply of our products, and any shortage of, or delay in, the supply may significantly impact on our business and results of operation.** For the year ended December 31, 2024, we purchased $335,494 and $98,391 from two of our major suppliers, represented approximately 59.8% and 17.5% respectively, of our total purchases. Our business, financial condition and operating results depend on the continuous supply of products from our major suppliers and our continuous supplier-customer relationships with them. Our heavy reliance on our major suppliers for the supply of our products will have significant impact on our business and results of operation in the event of any shortage of, or delay in the supply. We currently do not have long term supply agreements with our two largest suppliers for the year ended December 31, 2024, and we typically make ad hoc purchases through submission of purchase order forms. There is no assurance that our major suppliers will continue to supply their products in the quantities and timeframes required by us to meet the needs of our customers or comply with their supply agreements with us. Our product supply may also be disrupted by potential labor disputes, strike action, natural disasters or other accidents, epidemic and pandemic affecting the supplier. If our major suppliers do not supply products to us in a timely manner or in sufficient quantities, our business, financial condition and operating results may be materially and adversely affected. Furthermore, in the event of any delay in delivery of the products to us, our cash flow or working capital may be materially and adversely affected as a result of the corresponding delay in delivery of our products to our customers, and hence the delay in our receipt of payment from our customers. Our major suppliers may change their existing sales or marketing strategy in respect of the products supplied to us by changing their export strategy, reducing its sales or production volume or changing its selling prices. Consequently, there are no assurances that our major suppliers will not appoint other dealers or distributors which may compete with us in the market where we operate. Furthermore, any significant increase in the selling prices of the products which we source from our suppliers will increase our costs and may adversely affect our profit margin if we are not able to pass the increased costs on to our customers. There are no assurances that there will be no deterioration in our relationships with our major suppliers which could affect our ability to secure sufficient supply of products for our business. In the event that our major suppliers change their sales or marketing strategy or otherwise appoint other dealers or distributors who may compete with us, our business, financial condition and operating results may be materially and adversely affected. **We could be adversely affected by a change in consumer preferences, perception and spending habits and failure to develop or enrich our product offering or gain market acceptance of our new products could have a negative effect on our business.** The market we operate is subject to changes in consumer preference, perception and spending habits. Our performance depends significantly on factors which may affect the level and pattern of consumer spending in the market we operate. Such factors include consumer preference, consumer confidence, consumer income and consumer perception of the safety and quality of our products. Media coverage regarding the safety or quality of, or diet or health issues relating to, our products or the raw materials, ingredients or processes involved in their manufacturing, may damage consumer confidence in our products. A general decline in the consumption of our products could occur as a result of change in consumer preference, perception and spending habits at any time. Any failure to adapt our product offering to respond to such changes may result in a decrease in our sales if such changes are related to certain of our products. Any changes in consumer preference could result in lower sales of our products, put pressure on pricing or lead to increased levels of selling and promotional expenses. In any event a decrease in customer demand on our products may also result in lower sales and slow down the consumption of our inventory to a low inventory turnover level. Any of these changes could result in a material adverse effect on our business, financial conditions or results of operations. | 12 | | The success of our products depends on a number of factors including our ability to accurately anticipate changes in market demand and consumer preferences, our ability to differentiate the quality of our products from those of our competitors, and the effectiveness of our marketing and advertising campaigns for our products. We may not be successful in identifying trends in consumer preferences and developing products that respond to such trends in a timely manner. We also may not be able to effectively promote our products by our marketing and advertising campaigns and gain market acceptance. If our products fail to gain market acceptance, are restricted by regulatory requirements, or have quality problems, we may not be able to fully recover our costs and expenses incurred in our operation, and our business prospects, financial condition or results of operations may be materially and adversely affected. **If we fail to maintain quality products and value, our sales are likely to be negatively affected.** Our success depends on the safety and quality of products that we obtain from our suppliers for our customers. Our future customers will identify our brand name with a certain level of quality and value. If we cannot meet this perceived value or level of quality, we may be negatively affected and our operating results may suffer. In addition, any failure on the part of our suppliers to maintain the quality of their products, will in turn substantially harm the results of our business operations, potentially forcing us to identify other suppliers or alter our business strategy significantly. **If we are unable to create brand influence, we may not be able to maintain current or attract new users and customers for our products.** Our operational and financial performance is highly dependent on the strength of our brand. We believe brand familiarity and preference will continue to have a significant role in winning customers as the decision to buy our products and services. In order to further expand our customer base, we may need to substantially increase our marketing expenditures to enhance brand awareness through various online and offline means. Moreover, negative coverage in the media of our company could threaten the perception of our brand, and we cannot assure you that we will be able to defuse negative press coverage about our company to the satisfaction of our investors, customers and suppliers. If we are unable to defuse negative press coverage about our company, our brand may suffer in the marketplace, our operational and financial performance may be negatively impacted and the price of our shares may decline. Currently, we sell our products, with or without customization, under our brand name ATP, to domestic customers in Malaysia and to overseas customers. However, if our competitors initiate a lawsuit against us for infringing their trademark, we may be forced to adopt a new brand name for our products. As a result, we may incur additional marketing cost to raise awareness of such new brand name. We may also be ordered to pay a significant amount of damages, and our business, results of operations and financial condition could be materially and adversely affected. **We may be unable to protect our intellectual property rights.** We rely on intellectual property laws in Malaysia and other jurisdictions to protect our trademarks. We are the registered owner of five trademarks in Malaysia. We cannot assure that counterfeiting or imitation of our products will not occur in the future or, if it does occur, that we will be able to address the problem in a timely and effective manner. Any occurrence of counterfeiting or imitation of our products or other infringement of our intellectual property rights could negatively affect our brand and our reputation, which in turn adversely affects the results of our operations. Litigation to prosecute infringement of our intellectual property rights could be costly and lengthy and will divert our managerial and financial resources. We will have to bear costs of the intellectual property litigation and may be unable to recover such costs from our opposite parties. Protracted litigation could also result in our customers deferring or limiting their purchase or use of or products until such litigation is resolved. The occurrence of any of the foregoing will have a material adverse effect on our business, financial condition and results of operations. **We may incur losses resulting from product liability claims or product recalls or adverse publicity relating to our products.** We may incur losses resulting from product liability claims with respect to our products supplied by our supplier. We may face claims or liabilities which may arise if there exist any defects in quality of these products or any of these products are deemed or proven to be unsafe, defective or contaminated. In the event that the use or misuse of any product distributed by us results in personal injury or death, product liability and/or indemnity claims may be brought against us, in addition to our product recalls, and the relevant regulatory authorities in the market we operate may close down some of our related operations and take administrative actions against us. If we experience any business disruption and litigation, we may incur additional costs and have to divert our managements attention and resources on such matters, which may adversely affect our business, financial condition and results of operations. | 13 | | **We operate in a heavily regulated industry.** Our business is principally regulated by various laws and regulations in the market we operate, such as in Malaysia the Food Act of 1983 (Act 281) and Regulations, Control of Drugs and Cosmetics Regulations 1984 mandate authorization from the Food Safety and Quality Division and National Pharmaceutical Regulatory Agency of the Ministry of Health for our Companys products to be sold in the country. Various registrations, certificates and/or licenses for the conduct of our business are required under the above laws, which also contain provisions for requirements on the storage, labelling, advertising and importation of some of our products. Based on our experience, some of the laws and regulations of the place where we operate our business are subject to amendments, uncertainty in interpretation and administrative actions from time to time. Therefore, we cannot assure you that, for the implementation of our business plans and the introduction of any new product, we will be able to obtain all the necessary registrations, certificates and/or licenses. Any failure to comply with the above laws and regulations may give rise to fines, administrative penalties and/or prosecution against us, which may adversely affect our reputation, financial condition or results of operation. **We had previously relied on our variable interest entity, Agape S.E.A. Sdn Bhd, in Malaysia for our business operations, which may not be as effective in providing operational control or enabling us to derive economic benefits as through ownership of controlling equity interests. While we no longer rely on Agape S.E.A. Sdn Bhd for our operations, we may do so in the future.** Agape S.E.A. Sdn Bhds equity at risk was insufficient to finance its business activities and it provided all of the Companys purchases during the fiscal years ended December 31, 2020 and 2019. As a result, it is considered to be a variable interest entity (VIE) and the Company is the primary beneficiary since it has both of the following characteristics, (a) the power to direct the activities of the VIE that most significantly impact the VIEs economic performance; and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. However, the Company no longer relied on the VIE after the fiscal year ended December 31, 2020. For the years ended December 31, 2024 and 2023, Agape S.E.A. Sdn Bhd did not provide any purchase to the Company. In addition, Agape S.E.A.s impact to our consolidated financial statements constitutes less than 1% of our total consolidated assets. While the Company have not made any purchases from the VIE for the year ended December 31, 2024, we may expect to continue to rely on ASLs beneficiary ownership structure with Agape S.E.A. to operate our business. **Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.** Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: pertain to the maintenance of records in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements. In connection with the audit of our consolidated financial statements as of December 31, 2024, we identified two material weaknesses, and other control deficiencies including significant deficiencies in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified related to the Company were: (i) insufficient full-time personnel with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions, address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP; (ii) lack of a functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures and lack of adequate policies and procedures in internal audit function to ensure that the Companys policies and procedures have been carried out as planned. | 14 | | We have taken measures and plan to continue to take measures to remedy these material weaknesses. The measures that we are planning to take include, but not limited to, hiring full-time personnel with appropriate levels of accounting knowledge and experience to address the U.S. GAAP or provide training and development opportunities for existing personnel to enhance their accounting knowledge and expertise and forming an internal audit function and have plans to hire internal auditors to strengthen our overall governance. If hire full time internal auditors is not feasible, we plan to engage a consulting firm that specializes in compliance and internal controls as a temporary solution. All internal auditors will be independent of our operations and will report directly to the audit committee. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct theses material weaknesses or our failure to discover and address any other material weaknesses could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a public company, we will become subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act, or SOX 404, will require that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 10-K and in our quarterly report on Form 10-Q if we are qualified as an accelerated filer. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of SOX 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with SOX 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods. **Legal disputes or proceedings could expose us to liability, divert our managements attention and negatively impact our reputation.** We may at times be involved in potential legal disputes or proceedings during the ordinary course of business operations relating to product or other types of liability, employees claims, labor disputes or contract disputes that could have a material and adverse effect on our reputation, operation and financial condition. If we become involved in material or protracted legal proceedings or other legal disputes in the future, the outcome of such proceedings could be uncertain and could result in settlements or outcomes which adversely affect our financial condition. In addition, any litigation or legal proceedings could incur substantial legal expenses as well as significant time and attention of our management, diverting their attention from our business and operations. **Our failure to comply with anti-corruption laws and regulations, or effectively manage our employees, customers and business partners, could severely damage our reputation, and materially and adversely affect our business, financial condition, results of operations and prospects.** We are subject to risks in relation to actions taken by us, our employees, third-party customers or third-party suppliers that constitute violations of the anti-corruption laws and regulations. While we adopt strict internal procedures and work closely with relevant government agencies to ensure compliance of our business operations with relevant laws and regulations, our efforts may not be sufficient to ensure that we comply with relevant laws and regulations at all times. If we, our employees, third-party customers or third-party suppliers violate these laws, rules or regulations, we could be subject to fines and/or other penalties. Actions by Malaysia regulatory authorities or the courts to provide an alternative interpretation of the laws and regulations or to adopt additional anti-bribery or anti-corruption related regulations could also require us to make changes to our operations. Our reputation, corporate image, and business operations may be materially and adversely affected if we fail to comply with these measures or become the target of any negative publicity as a result of actions taken by us, our employees, third-party customers or third-party suppliers. **If we are unable to successfully develop and timely introduce new products or services or enhance existing products or services, our business, financial condition and results of operations may be materially and adversely affected.** We must continually source, develop and introduce new products and services as well as improve and enhance our existing products and services to maintain or increase our sales. The success of new or enhanced products or services may depend on a number of factors including, anticipating and effectively addressing user preferences and demand, the success of our sales and marketing efforts, effective forecasting and management of products and services demands, purchase commitments, and the quality of or defects in our products. The risk of not meeting our customers preferences and demands through our products and services may result in a shift in market shares, as customers instead choose products and services offered by our competitors. This may result in lower sales revenue, materially and adversely affecting our business, financial condition and results of operations. | 15 | | We may not be able to manage the growth of our business and our expansion plans and operations or implement our business strategies on schedule or within our budget, or at all. We are continually executing a number of growth initiatives, strategies and operating plans designed to enhance our business. Any expansion may increase the complexity of our operations and place a significant strain on our managerial, operational, financial and human resources. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. We cannot assure you that we will be able to effectively manage our growth or to implement all these systems, procedures and control measures successfully. Furthermore, the anticipated benefits from these growth initiatives, strategies and operating plans are based on assumptions that may prove to be inaccurate. Moreover, we may not be able to successfully complete these growth initiatives, strategies and operating plans and realize all of the benefits that we expect to achieve or it may be more costly to do so than we anticipate. If, for any reason, we are not able to manage our growth effectively, the benefits we realize are less than our estimates or the implementation of these growth initiatives, strategies and operating plans adversely affects our operations or costs more or takes longer to effectuate than we expect, and/or if our assumptions prove to be inaccurate, our business and prospects may be materially and adversely affected. In addition, we may seek and pursue opportunities through joint ventures or strategic partnerships for expansion from time to time, and we may face similar risks and uncertainties as listed above. Failure to properly address these risks and uncertainties may materially and adversely affect our ability to carry out acquisitions and other expansion plans, integrate and consolidate newly acquired or newly formed businesses, and realize all or any of the anticipated benefits of such expansion, which may have a material adverse effect on our business, financial condition, results of operations and prospects. **We have a limited operating history in the Malaysia health and wellness industry, which makes it difficult to evaluate our future prospects.** We launched our ATP Zeta Super Health Program business in June 2016, the same month in which our Company was incorporated, followed by our ENERGETIQUE, BEAUNIQUE and E.A.T.S. series in July 2018, March 2019 and March 2023 respectively. Due to the poor response from distributors to ENERGETIQUE and BEAUNIQUE series, we decided to discontinue the two series in December 2022. We have limited experience in most aspects of our business operation, such as sourcing products for and offering advisory services on all the three programs. As our business develops and as we respond to competition, we may continue to introduce new product and services offerings and make adjustments to our existing product line and services and to our business operation in general. Any significant change to our business model that does not achieve expected results may have a material and adverse impact on our financial condition and results of operations. It is therefore difficult to effectively assess our future prospects. The Malaysia health and wellness industry may not develop as expected. Prospective retail and corporate customers may not be familiar with the development of the market and may have difficulties distinguishing our products from those of our competitors. Convincing prospective customers or distributors of the value of our products or services is important to the success of our business. The risk of failing to convince potential customers or distributors to purchase products or services from us may result in the failure of our business plan. Many customers or distributors may not be interested in purchasing products and services we sell because there is no certainty that our business will succeed. You should consider our business and prospects in light of the risks and challenges we encounter or may encounter given the rapidly evolving market in which we operate and our limited operating history. These risks and challenges include our ability to, among other things: | | | manage our future growth; | | | | | increase the utilization of our products by existing and new customers; | | | | | maintain and enhance our relationships with customers and distributors; | | | | | improve our operational efficiency; | | | | | attract, retain and motivate talented employees; | | | | | cope with economic fluctuations; | | | | | navigate the evolving regulatory environment; and | | | | | defend ourselves against legal and regulatory actions. | | | 16 | | **Our historical growth rates may not be indicative of our future growth. If we are unable to manage the growth and increased complexity of our business, fail to control our costs and expenses, or fail to execute our strategies effectively, our business and business prospects may be materially and adversely affected.** Our historical growth rates may not be indicative of our future growth, and we may not be able to generate similar growth rates in future periods. Our revenue growth may slow, or our total revenues may decline for a number of possible reasons, including change in consumers preferences, changes in regulations and government policies, increasing competition, emergence of alternative business models, and general economic conditions. Our total revenues decreased by approximately 7.6% from approximately $1.4 million for the year ended December 31, 2023 to approximately $1.3 million for the year ended December 31, 2024. Our gross profit decreased by approximately 18.9% from approximately $0.9 million for the year ended December 31, 2023 to approximately $0.7 million for the year ended December 31, 2024. If our growth rate declines, investors perceptions of our business and business prospects may be materially and adversely affected and the market price of our shares could decline. **Our lack of insurance could expose us to significant costs and business disruption.** The health and wellness industry in Malaysia is a mature market. We currently do not have any product liability or disruption insurance to cover our operations in Malaysia or overseas, which, based on public information available to us relating to Malaysia-based health and wellness companies, is consistent with customary industry practice in Malaysia. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. If we suffer any losses, damages or liabilities in the course of our business operations, we may not have adequate insurance coverage to provide sufficient funds to cover any such losses, damages or product claim liabilities. Therefore, there may be instances when we will sustain losses, damages and liabilities because of our lack of insurance coverage, which may in turn materially and adversely affect our financial condition and results of operations. **A decline in general economic condition could lead to reduced consumer demand and could negatively impact our business operation and financial condition, which in turn could have a material adverse effect on our business, financial condition and results of operations.** Our operating and financial performance may be adversely affected by a variety of factors that influence the general economy. Consumer spending habits, including spending for health-related products and services we sell, are affected by, among other things, prevailing economic conditions, levels of unemployment, salaries and wage rates, prevailing interest rates, income tax rates and policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers disposable income. In the event of an economic slowdown, consumer spending habits could be adversely affected and we could experience lower net sales than expected on a quarterly or annual basis which could have a material adverse effect on our business, financial condition and results of operations. **We may be adversely affected by the performance of third-party contractors.** We engaged third-party contractors to carry out logistics services. We endeavor to engage third-party companies with a strong reputation and track record, high performance reliability and adequate financial resources. However, any such third-party contractor may still fail to provide satisfactory logistics services at the level of quality or within the timeframe required by us or our customers. While we generally require our logistics contractors to fully reimburse us for any losses arising from delay in delivery or non-delivery, our results of operation and financial condition may be adversely affected if any of the losses are not borne by them. If the performance of any third-party contractor is not satisfactory, we may need to replace such contractor or take other remedial actions, which could adversely affect the cost structure and delivery schedule of our products and services and thus have a negative impact on our reputation, financial position and business operations. In addition, as we expand our business into overseas markets, there may be a shortage of third-party contractors that meet our quality standards and other selection criteria in such locations and, as a result, we may not be able to engage a sufficient number of high-quality third-party contractors in a timely manner, which may adversely affect our delivery schedules and delivery costs and hence our business, results of operations and financial conditions. | 17 | | **We may need additional capital, and financing may not be available on terms acceptable to us, or at all.** There is no guarantee that in the future we will generate enough profits to support our business. Although we believe that our anticipated cash flows from operating activities together with cash on hand will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next twelve months, we cannot assure you this will be the case. We may need additional cash resources in the future if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. **Adverse developments in our existing areas of operation could adversely impact our results of business, results of operations and financial condition.** Our operations are focused on utilizing our sales efforts which are principally located in Malaysia. As a result, our results of operations, cash flows and financial condition depend upon the demand for our products in Malaysia. Due to the lack of broad diversification in industry type and geographic location, adverse developments in our current segment of the industry, or our existing areas of operation, could have a significantly greater impact on our business, results of operations and financial condition than if our operations were more diversified. **An overall decline in the health of the economy and other factors impacting consumer spending, such as natural disasters, outbreak of viruses, illnesses, infectious diseases, contagions and the occurrence of unforeseen epidemics may affect consumer purchases, reduce demand for our products and materially harm our business, results of operations and financial condition.** Our business depends on consumer demand for our products and, consequently, is sensitive to a number of factors that influence consumer confidence and spending, including but not limited to, general current and future economic and political conditions, consumer disposable income, recession and fears of recession, unemployment, minimum wages, availability of consumer credit, consumer debt levels, interest rates, tax rates and policies, inflation, war and fears of war, inclement weather, natural disasters, terrorism, active shooter situations, outbreak of viruses, illnesses, infectious diseases, contagions and the occurrence of unforeseen epidemics (including the outbreak of the coronavirus and its potential impact on our financial results) and consumer perceptions of personal well-being and security. | 18 | | In general, our business could be adversely affected by the effects of epidemics, pandemic or, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as flood or hazardous air pollution, or other outbreaks. In response to an epidemic, severe weather conditions, or other outbreaks, government and other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including but not limited to, temporarily closing down business, limiting business hours, and setting restrictions on travel and/or visits with clients and partners for a prolonged period of time. Various impact arising from a severe condition may cause business disruption, resulting in material, adverse impact to our financial condition and results of operations. **Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results.** We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar, including Malaysian Ringgit and the Hong Kong Dollar. Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against other currencies affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. We cannot assure you that fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies would not materially affect our financial results. **Our business depends on the continued contributions made by Mr. How Kok Choong, as our key executive officer, the loss of who may result in a severe impediment to our business.** Our success is dependent upon the continued contributions made by our CEO and President, Mr. How Kok Choong. We rely on his expertise in business operations when we are developing our business. We have no Key Man insurance to cover the resulting losses in the event that any of our officer or directors should die or resign. If Mr. How Kok Choong cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner or at all. This would likely result in a severe damage to our business operations and would have an adverse material impact on our financial position and operating results. To continue as a viable operation, the Company may have to recruit and train replacement personnel at a higher cost. Additionally, if Mr. How Kok Choong joins our competitors or develops similar businesses that are in competition with our Company, our business may also be negatively impacted. Our future success depends on our ability to attract and retain qualified long-term staff to fill management, technology, sales, marketing, and customer services positions. We have a great need for qualified talent, but we may not be successful in attracting, hiring, developing, and retaining the talent required for our success. **If we are not able to achieve our overall long-term growth objectives, the value of an investment in our Company could be negatively affected.** We have established and publicly announced certain long-term growth objectives. These objectives were based on, among other things, our evaluation of our growth prospects, which are generally driven by the sales potential of many product types, some of which are more profitable than others, and on an assessment of the potential price and product mix. There can be no assurance that we will realize the sales potential and the price and product mix necessary to achieve our long-term growth objectives. **Risks Related to our Industry** **Our business and reputation may be affected by product liability claims, litigation, customer complaints, product tampering, food safety issues, food-borne illnesses, health threats, quality control concerns or adverse publicity relating to our products. Product liability insurance of our supplier may not cover our liability sufficiently or at all.** Like other consumer product manufacturers, sale of our products involves an inherent risk of our products being found to be unfit for consumption or cause illness. Products may be rendered unfit for consumption due to raw materials or product contamination or degeneration, presence of microbials, illegal tampering of products by unauthorized third parties or other problems arising during the various stages of the procurement, production, transportation and storage processes. The occurrence of such problems may result in customer complaints, fines, penalties or adverse publicity causing serious damage to our reputation and brand, as well as product liability claims, other legal disputes and loss of revenues. Under certain circumstances, we may be required to recall our products. Even if a situation does not necessitate a product recall, we cannot assure you that product liability claims or other legal disputes will not be asserted against us as a result. Product liability insurance of our supplier may not cover our liability sufficiently or at all and will not cover liability that arises out of our default such as mishandling, poor storage condition and/or contamination of the products by us. As a result, a product liability or other judgment against us, or a product recall, could have a material adverse effect on our business, financial condition or results of operations. | 19 | | Our business is susceptible to food-borne illnesses. We cannot assure you that we are able to effectively prevent all diseases or illnesses caused by our products or contamination of our products. Furthermore, our reliance on third-party product suppliers means that food-borne illness incidents could be caused by our suppliers outside of our control. New illnesses may develop in the future, or diseases with long incubation periods could arise that could give rise to claims or allegations on a retroactive basis. Reports in the media of instances of food-borne illnesses or health threats of our products or any of their major ingredients could adversely and significantly affect our sales, and have significant negative impact on our results of operations. This risk exists even if it were later determined that the illness or health threat in fact was not caused by our products. In addition, adverse publicity about health and safety concerns, whether unfounded or not, may discourage consumers from buying our products. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused personal injury or illness could adversely affect our reputation and our corporate and brand image. If consumers were to lose confidence in our brand and reputation, we could suffer long-term or even permanent declines in our sales and results of operation. The amount of negative news, customers complaints and claims against us may also be very costly and may divert our managements attention from our business operation. **We operate in a highly competitive market. If we do not compete effectively, our prospects, operating results, and financial condition could be materially and adversely affected.** The health and wellness market in Malaysia is a mature and a highly competitive market, with companies offering a variety of competitive products and services. We expect competition in our market to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services. The health and wellness market has a multitude of participants in the domestic market, including, but not limited, to retail health supplement providers, pharmaceutical companies, and network marketing company which supply health supplement products, such as Elken Group, USANA Group, NHF Group, Young Living, Jeunesse Global Holdings LLC, USA, Shaklee Corporation, VASAYO LLC, Amway Corporation, Sami Direct, Kyni, Inc., Melaleuca, Inc. We believe many of our competitors and potential competitors may have significant competitive advantages, including but not limited to, longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, greater brand recognition, ability to leverage stores which they may operate, and greater financial, research and development, marketing, distribution, and other capabilities and resources than we do. Our competitors and potential competitors may also be able to develop products and services that are equal or more superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do. Some of our competitors may aggressively discount their products in order to gain market share, which could result in pricing pressures, reduced profit margins, lost market share, or a failure to grow market share for us. If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be materially and adversely affected. **Risks Related to Doing Business in Malaysia** **Developments in the social, political, regulatory and economic environment in Malaysia may have a material adverse impact on us.** Our business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in Malaysia. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation. Negative developments in Malaysias socio-political environment may adversely affect our business, financial condition, results of operations and prospects. The Malaysian economy registered modest growth of approximately 5.1% and 3.0% in December 31, 2024 and December 31, 2023 respectively, according to the Department of Statistics Malaysia. Although the overall Malaysian economic environment (in which we predominantly operate) appears to be positive, there can be no assurance that this will continue to prevail in the future. Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty. | 20 | | **We are subject to foreign exchange control policies in Malaysia.** The ability of our subsidiaries to pay dividends or make other payments to us may be restricted by the foreign exchange control policies in the countries where we operate. For example, there are foreign exchange policies in Malaysia which support the monitoring of capital flows into and out of the country in order to preserve its financial and economic stability. The foreign exchange policies are administered by the Foreign Exchange Administration, an arm of Bank Negara Malaysia (BNM), the central bank of Malaysia. The foreign exchange policies monitor and regulate both residents and non-residents. Under the current Foreign Exchange Administration rules issued by BNM, non-residents are free to repatriate any amount of funds from Malaysia in foreign currency other than the currency of Israel at any time (subject to limited exceptions), including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment in Malaysia, subject to any withholding tax. In the event BNM or any other country where we operate introduces any restrictions in the future, we may be affected in our ability to repatriate dividends or other payments from our subsidiaries in Malaysia or in such other countries. Since we are a holding company and rely principally on dividends and other payments from our subsidiaries for our cash requirements, any restrictions on such dividends or other payments could materially and adversely affect our liquidity, financial condition and results of operations. **Economic, market and political developments in the countries where we operate could have a material and adverse effect on our business.** As with all organizations that seek to reduce business risks via geographical expansion, the economic, market and political conditions in other countries, particularly emerging market conditions in Southeast Asia, could have an influence on our business. Any widespread global financial instability or a significant loss of investor confidence in emerging market economies may materially and adversely affect our business, financial condition, results of operations, prospects or reputation. Examples of such external factors or conditions that are outside our control include, but are not limited to the following: | | | general economic, political and social conditions in Southeast Asian markets; | | | | | | | | | | consumer spending patterns in our key markets; | | | | | | | | | | currency and interest rate fluctuations; | | | | | | | | | | international events and circumstances such as wars, terrorist attacks, natural disasters and political instability; and | | | | | | | | | | changes in legal regimes and governmental regulations, such as licensing and approvals, taxation, duties and tariffs, in key markets and abroad. | | For example, the global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and the global economy has continued to face new challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities of some of the worlds leading economies, including the United States. For example, in 2013, the Federal Reserve Bank in the United States announced the tapering of its bond-buying program which led to a high degree of volatility in equity markets and substantial devaluations in the currencies of many emerging economies, including markets where we operate. Economic conditions in the countries where we operate might be sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in emerging markets. Furthermore, the outbreak of coronavirus disease 2019 was first reported in December 2019 in Wuhan, China. | 21 | | **Risks Related to our Common Stock** **Volatility in our shares price may subject us to securities litigation.** The market for our shares may have, when compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert managements attention and resources. **We may never be able to pay dividends and are unlikely to do so.** To date, we have not paid, nor do we intend to pay in the foreseeable future, dividends on our common stock, even if we become profitable. Earnings, if any, are expected to be used to advance our activities and for working capital and general corporate purposes, rather than to make distributions to stockholders. Since we are not in a financial position to pay dividends on our common stock and future dividends are not presently being contemplated, investors are advised that return on investment in our common stock is restricted to an appreciation in the share price. The potential or likelihood of an increase in share price is uncertain. In addition, under Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the dividend. Our ability to pay dividends will therefore depend on our ability to generate sufficient profits. **Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.** Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of shares of our common stock, warrants to purchase shares of our common stock or other securities. On February 5, 2025, the Company obtained approval from stockholders in a special meeting to increase number of authorized common stock from 50,000,000 to 500,000,000 and to issue 46,000,000 shares of common stock at $0.0001 per share. On February 28, 2025, the Company signed shares subscription agreement with 18 subscribers to issue 46,000,000 shares of common stock at the price of $0.50 per share (the Private Placement). Immediately prior to the Private Placement, the Company had a total of 4,005,381 shares of common stock issued and outstanding. Immediately after the closing of the Private Placement, the Company is expected to have a total of 50,005,381 shares of common stock issued and outstanding. In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our stockholders. We may issue additional shares of common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We expect we will need to raise additional capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital-raising efforts, including at a price (or exercise prices) below the price you paid for your stock. **We are a smaller reporting company, and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.** We are currently a smaller reporting company, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $100 million during the most recently completed fiscal year. In the event that we are still considered a smaller reporting company, at such time as we cease being an emerging growth company, we will be required to provide additional disclosure in our SEC filings. However, similar to an emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects. | 22 | | **ITEM 1B. UNRESOLVED STAFF COMMENTS** None. **ITEM 2. PROPERTIES** We currently lease 5 properties ranging from approximately 2,500 to 11,900 square feet in Kuala Lumpur and Ipoh which primarily carry out the functions of a staff accommodation, warehouse, office, service centers and sales branches in different regions of Malaysia. **ITEM 3. LEGAL PROCEEDINGS** We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest averse to us. **ITEM 4. MINE SAFETY DISCLOSURES** Not applicable. | 23 | | **PART II** **ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES** On August 15, 2024, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada (the Certificate of Change) to effect a reverse split of the Companys Common Stock at a ratio of 1-for-20 (the Reverse Stock Split), effective as of August 30, 2024. On that date, every 20 issued and outstanding shares of the Companys Common Stock were automatically converted into one outstanding share of Common Stock. As a result of the Reverse Stock Split, the number of the outstanding shares of Common Stock decreased from 77,069,575 (pre-split) shares to 3,853,504 (post-split) shares. In addition, by reducing the number of outstanding shares, the Companys loss per share in all prior periods increased by a factor of 20. The Reverse Stock Split affected all shares of Common Stock outstanding immediately prior to the effective time of the Reverse Stock Split. Stockholders who hold a number of pre-reverse stock split shares of the Companys Common Stock not evenly divisible by 20 are entitled the number of shares rounded up to the nearest whole share. The Company will issue share of the post-Reverse Stock Split Common Stock to any stockholder who would have received a fractional share as a result of the Reverse Stock Split. The Reverse Stock Split affected all holders of Common Stock uniformly and did not affect any stockholders percentage of ownership interest. The par value of the Companys Common Stock remained unchanged at $0.0001 per share and the number of authorized shares of Common Stock reduced from 1,000,000,000 shares to 50,000,000 shares after the Reverse Stock Split. **Holders** As of December 31, 2024, we had 3,989,056 shares of our Common Stock par value, $0.0001 issued and outstanding. There were 1,392 record holders of our Common Stock. **Transfer Agent and Registrar** Our transfer agent is VStock Transfer, LLC, with an address at 18, Lafayette Place, Woodmere, New York 11598 and telephone number is +1 (212) 828-843. **Dividend Policy** Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our board of directors out of funds legally available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock. In addition, we currently have no plans to pay such dividends. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future. **Equity Compensation Plan Information** Currently, there are no equity compensation plan in place. **Unregistered Sales of Equity Securities** None. **Purchases of Equity Securities by the Registrant and Affiliated Purchasers** None. **ITEM 6. SELECTED FINANCIAL DATA** The following table sets forth selected financial data as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023. This selected financial data should be read in conjunction with the consolidated financial statements and related notes included in Item 15 of this Annual Report. | | | Years Ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Revenue | | $ | 1,322,747 | | | $ | 1,431,088 | | | | Net loss attributable to Agape ATP Corporation | | $ | (2,470,474 | ) | | $ | (2,101,985 | ) | | | Loss per share basic and diluted | | $ | (0.63 | ) | | $ | (0.55 | ) | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Total assets | | $ | 3,240,020 | | | $ | 5,744,494 | | | | Total liabilities | | $ | 1,310,899 | | | $ | 1,363,631 | | | | 24 | | **ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** *The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Report.* *Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words may, will, should, anticipate, estimate, plan, potential, project, continuing, ongoing, expects, management believes, we believe, we intend, or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.* *The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.* **Overview** Agape ATP Corporation is a company that provides health and wellness products and health solution advisory services to our clients. The Company primarily focus its efforts on attracting customers in Malaysia. Its advisory services center on the ATP Zeta Health Program, which is a health program designed to effectively prevent diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles, and promotion of health. The program aims to promote improved health and longevity in our clients through a combination of modern medicine, proper nutrition and advice from skilled nutritionists and/or dieticians. In order to strengthen the Companys supply chain, on May 8, 2020, the Company has successfully acquired approximately 99.99% of ASL, with the goal of securing an established network marketing sales channel that has been established in Malaysia for the past 15 years. ASL has been offering the Companys ATP Zeta Health Program as part of its product lineup. As such, the acquisition creates synergy in the Companys operation by boosting the Companys retail and marketing capabilities. The newly acquired subsidiary allows the Company to fulfill its mission of helping people to create health and wealth by providing a financially rewarding business opportunity to distributors and quality products to distributors and customers who seek a healthy lifestyle. Via ASL, the Company offers two series of programs which consist of different services and products: ATP Zeta Health Program and E.A.T.S. The ATP Zeta Health Program is a health program designed to promote health and general wellbeing designed to prevent health diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians as well as trained members and distributors. The E.A.T.S is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. The Company deems creating public awareness on wellness and wellbeing lifestyle as essential to enhance the provision of its health solution advisory services; and therefore, incorporated CEDAR. Upon its establishment, CEDAR started collaborating with ASL to carry out various wellness programs. To further its reach in the Health and Wellness Industry, on November 11, 2021, AATP LB formed an entity, DSY Wellness with an independent third party which AATP LB owns 60% of the equity interest, to pursue the business of providing complementary health therapies. AGE delivers innovative solutions for sustainability, energy savings and promoting environmental stewardship to achieves energy efficiency and carbon neutrality for a healthier environment. ATPC Technology Private Limited (ATPC Tech) intend to collaborate with local IT expertise to develop comprehensive digital wellness platform that integrates e-commerce, online consultations, chronic disease management, and robust supply chain services catering to ASEAN market. | 25 | | **Results of Operation** **For the years ended December 31, 2024 and 2023** Revenue We generated revenue of $1,322,747, which comprised of revenue from the Companys network marketing business of $137,050 (approximately 10.4%); revenue from the Companys operations in the provision of complementary health therapies of $1,120,843 (approximately 84.7%); $22,091 from skin care and healthcare products, a new revenue stream from the Companys operations in wellness and wellbeing lifestyle and $42,763 from the operation in green energy for the year ended December 31, 2024 as compared to revenue of $1,431,088, which the amount was mainly attributed from the Companys network marketing business of $396,122 (approximately 27.7%); and $1,033,221 (approximately 72.2%) from the Companys operations in the provision of complementary health therapies for the year ended December 31, 2023. Total revenue for the year ended December 31, 2024 decreased by $108,341, or approximately 7.6% from the year ended December 31, 2023. Revenue from the Companys network marketing business decreased significantly by $259,072, or approximately 65.4%, whereas the revenue from the provision of complementary health therapies increased by $87,622, or approximately 8.5%, new revenue streams $22,091 from the Companys operations in wellness and wellbeing lifestyle and $42,763 from the operation in green energy. The decreased revenue from the Companys network marketing business due to limited product range available as compared to the previous years, it limited the potential development of this revenue stream. We did not offer as many categories of the health products in our network marketing business during fiscal year 2024 as compared to prior years due to the company strategically shifting the business focus from companys network marketing business to new revenue streams that can help restore growth and diversify income streams. During the year ended December 31, 2024, we launched new revenue streams from the Companys operations in wellness and wellbeing lifestyle and ventured into green energy industry by providing products, technical knowledge and solutions for sustainability and energy savings. However, the increased of approximately $64,854 from new revenue streams was less than the significant decrease of revenue related to the sales of existing products related to network marketing business. The revenue increase in provision of complementary health therapies business was due to the increase in public awareness about the importance of physical and mental health, more individual turned to complementary health therapies as preventive care and wellness to maintain good health, prevent illness and promote overall well-being, more service orders were processed during the year ended December 31, 2024 compared with previous year, also led the increase of related products sold. | 26 | | Cost of Revenue Cost of revenue for the year ended December 31, 2024 amounted to $563,599 (approximately 42.6% of revenue) as compared to $494,516 (approximately 34.6% of revenue) for the year ended December 31, 2023, representing an increase of $69,083, or approximately 14.0%. The cost of revenue increase due to the company wrote down the inventory in the network marketing business and the cost incurred in the Companys operations in wellness and wellbeing lifestyle and green energy are relatively higher as compared to network marketing business and provision of complementary health therapies business. Cost of revenue comprised freight-in, the purchase cost of manufactured goods for sale to customers and purchase cost of products and services for the provision of complementary health therapies. Gross Profit Gross profit for the year ended December 31, 2024 amounted to $759,148, represented a gross margin of approximately 57.4%, as compared to $936,572 for the year ended December 31, 2023, which was equivalent to a gross margin of approximately 65.4%. The decrease in gross profit margin in year ended December 31, 2024 was due to low gross profit margin in Companys operations in wellness and wellbeing lifestyle and green energy. The gross profit margin related to our network marketing business was approximately 69.6% and 84.1% for the years ended December 31, 2024 and 2023, respectively; the gross profit margin related to our provision of complementary heath therapies business was approximately 59.1% and 58.5%, respectively; the gross profit margin related to the new revenue streams, Companys operations in wellness and wellbeing lifestyle and green energy was approximately 2.3% and 2.9% respectively, for the year ended December 31, 2024. In addition to that, there was $7,081 inventory write-downs during the year ended December 31, 2024, whereas no inventory write-downs were recorded for the year ended December 31, 2023. Operating Expenses Our operating expenses consist of selling expenses, commission expenses and general and administrative expenses. *Selling expenses* Selling expenses for the year ended December 31, 2024 amounted to $162,712 as compared to $629,003 for the year ended December 31, 2023, a significant decrease of $466,291, or approximately 74.1%. The Companys selling expenses typically comprise salaries and benefits expenses, credit card processing fees and promotional expenses. The significant decrease in selling expenses was due to the decrease in promotional expenses incurred in the network marketing business. *Commission expenses* Commission expenses were $34,905 and $88,132 for the years ended December 31, 2024 and 2023, respectively, representing a significant decrease of $53,227, or approximately 60.4%. The significant decrease in commission expenses was due to the decrease in revenue from the Companys network marketing business. *General and administrative expenses (G&A expenses)* G&A expenses for the year ended December 31, 2024 amounted to $3,134,874, as compared to $2,366,016 for the year ended December 31, 2023, representing an increase of $768,858, or approximately 32.4%. The Companys G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses, depreciation expenses and provision for credit losses. Upon uplisted in Nasdaq capital market, the Company incurred Nasdaq annual listing fees, and the Company also appointed two executive directors and three independent directors, which led the increase of executive salaries for the year ended December 31, 2024 compared to previous year. | 27 | | Other Income (Expenses) For the year ended December 31, 2024, we recorded an amount of $92,233 as other income, net as compared to $40,219 other income, net for the year ended December 31, 2023, representing a significant change of $52,014. The net other income of $92,233 incurred during the year ended December 31, 2024 comprised of other income, net of $29,209, interest income of $67,930, unrealized holding loss on marketable securities of $5,018, gain on disposal of property and equipment of $112. The net other income of $40,219 incurred during the year ended December 31, 2023 comprised of other income, net of $5,724, interest income of $29,249, unrealized holding gain on marketable securities of $3,493, gain on disposal of property and equipment of $1,753. The significant change was due to the interest income from time deposit. Income Tax Expense We incurred income tax expense of $4,934 for the year ended December 31, 2024 as compared to $3,575 for the year ended December 31 2023. During the year ended December 31, 2024 and 2023, our operations in Malaysia incurred income taxes expenses as a result of provision assessment made by local tax authority for prior year tax. Net Loss We incurred a net loss of $2,486,044 for the year ended December 31, 2024, as compared to $2,109,935 for the year ended December 31, 2023, an increase of $376,109, or approximately 17.8%, predominately due to reasons as discussed above. | 28 | | Liquidity and Capital Resources As of December 31, 2024, we had working capital of $1,656,571 consisting of cash and cash in bank of $240,243 and time deposits of $1,800,000 as compared to working capital of $$4,113,614 consisting of cash and cash in bank of $494,771 and time deposits of $4,322,441 as of December 31, 2023. The Company had a net loss of $2,486,044 for the year ended December 31, 2024 and accumulated deficits of $9,518,045 as of December 31, 2024 as compared to net loss of $2,109,935 for the year ended December 31, 2023 and accumulated deficits of $7,047,571 as of December 31, 2023. The following summarizes the key components of our cash flows for the years ended December 31, 2024 and 2023: | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Net cash used in operating activities | | $ | (2,726,215 | ) | | $ | (2,001,823 | ) | | | Net cash used in investing activities | | | (50,050 | ) | | | (17,251 | ) | | | Net cash used in financing activities | | | (11,856 | ) | | | 5,398,037 | | | | Effect of exchange rate on cash and cash equivalents | | | (4,096 | ) | | | 15,067 | | | | Net change in cash and cash equivalents | | $ | (2,792,217 | ) | | $ | 3,394,030 | | | | 29 | | **Operating activities** Net cash used in operating activities for the year ended December 31, 2024 was $2,726,215 and were mainly comprised of the net loss of $2,486,044, gain on disposal of office equipment of $112, the increase in accounts receivables of $28,295, the increase in inventories of $4,225, the increase in prepaid taxes $22,322, the increase in prepayments and deposits of $434,447, the increase in other receivables of $2,105, the decrease in accounts payables (related parties) of $5,107, the decrease in customer deposits of $7,340, the payment of operating lease liabilities of $139,476, the decrease in other payables (related parties) of $7,065. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $57,340, amortization of operating right-of-use assets of $139,867, amortization of finance assets of $29,445, unrealized holding loss on marketable securities of $5,018, allowance for expected credit loss of $98,705, deferred tax expense of $220, inventory write-down of $7,081, decrease in amount due from related parties of $8,889, increase in accounts payables of $44,657, the increase in other payables and accrued liabilities of $14,761 and the increase of income tax payable of $4,340. Net cash used in operating activities for the year ended December 31, 2023 was $2,001,823 and were mainly comprised of the net loss of $2,109,935, the non-cash deferred tax benefit of $220, unrealized holding gain on marketable securities of $3,493, gain on disposal of office equipment of $1,753, the increase in inventories of $3,216, the increase in accounts receivables of $53,641, the increase in prepayments and deposits of $34,532, the decrease in other receivables of $8,961, the decrease in customer deposits of $248,299, the payment of operating lease liabilities of $147,951, the decrease of income tax payable of $10,591. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $75,982, amortization of operating right-of-use assets of $147,212, provision for credit losses of $29,955, decrease in prepaid taxes of $305,567, increase in accounts payables (including related parties) of $38,456 and the increase in other payables (including related parties) and accrued liabilities of $6,670. **Investing activities** Net cash used in investing activities for the year ended December 31, 2024 was $50,050, the amount resulted from the purchase property and equipment of $50,162 and proceeds from disposal of office equipment $112. Net cash used in investing activities for the year ended December 31, 2023 was $17,251, the amount mainly resulted from the purchase property and equipment of $52,320 and proceeds from disposal of office equipment $35,069. **Financing activities** Net cash used in financing activities for the year ended December 31, 2024 was $11,856, the amount mainly for the reduction of finance lease liability. Net cash provided by financing activities for the year ended December 31, 2023 was $5,398,037, consisted of the proceeds from issuance of common stock for $5,501,520, cash used for shares repurchased of $93,889 and reduction of finance lease liability of $9,594. Credit Facilities We do not have any credit facilities or other access to bank credit. Off-Balance Sheet Arrangements As of December 31, 2024, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders. Critical Accounting Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Companys consolidated financial statements include allowance for inventories obsolescence, impairment of long-lived assets, allowance for deferred tax assets, allowance for estimation of coupon redemption and the assumptions used in the valuation of the derivative financial instruments. Following are the methods and assumptions used in determining our estimates. | 30 | | **Allowance for inventories obsolescence** Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value. For the years ended December 31, 2024 and 2023, the Company recognize an inventory write-downs of $7,081 and $0, respectively. **Impairment of long-lived assets** Long-lived assets, including property and equipment, and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2024 and December 31, 2023, no impairment of long-lived assets was recognized. **Allowance for deferred tax assets** The Company conducts much of its business activities in Malaysia and Hong Kong and is subject to tax in each of these jurisdictions. Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Deferred tax assets relating to certain temporary differences and tax losses are recognized as management considers it is more likely than not that future taxable profit will be available against which the temporary differences or tax losses can be utilized. Where the expectation is different from the original estimate, such differences will impact the recognition of deferred tax assets and taxation in the periods in which such estimate is changed. **Allowance for expected credit loss** The Company estimates and records an allowance for its expected credit loss related to its accounts receivable. Credit losses are determined by Current Estimate of Expected Credit Losses model in accordance with Topic 326 Financial Instruments Credit Losses. For accounts receivable, the Company considers the age of the accounts receivable balances, credit quality of the Companys customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Companys ability to collect from customers. For the years ended December 31, 2024 and 2023, the Company recognize an allowance for expected credit loss of $32,857 and $542, respectively. **Allowance for e**stimation of **c**oupon **r**edemption The Company offers various coupon programs to customers, which result in the potential redemption of coupons against future purchases. The estimation of coupon redemption requires assumptions. This estimate is based on historical redemption patterns, customer behaviour trends, and the terms and conditions of the coupon programs. Management considers factors such as the type of coupon, the period of validity that could influence redemption rates. The Company makes estimates about the likelihood and timing of coupon redemptions, which may vary based on changing customer behaviour and economic conditions. If the actual redemption rate differs from the estimated rate, it could impact the redemption liability and related expenses in future periods. The allowance for coupon redemption is regularly reviewed and adjusted as more information becomes available to ensure that it reflects the expected redemption accurately. **Assumptions used in the valuation of the derivative financial instruments** The Company issued Representatives Warrants to purchase up to 115,500 shares of common stock at $4.4 per share, dated October 13, 2023, to Network 1 Financial Securities, Inc. The warrants shall be exercisable at any time, and from time to time, in whole or in part, commencing from October 13, 2023 (i.e. the date of issuance) and expiring on October 10, 2028. The Company used Black-Scholes-Merton Model to estimate the fair value of the Warrants and recognized as equity. No subsequent measurement has been performed as the Warrants are classified as equity. | 31 | | Critical Accounting Policies **Revenue recognition** On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASC Topic 606). The core principle underlying the revenue recognition of this ASU allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Companys revenue streams are recognized at a point in time for the Companys sale of health and wellness products. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of substantially collection. *Sales of Skin Care, Health and Wellness products* *- Performance obligations satisfied at a point in time* The Company derives its revenues from sales contracts with its customers with revenues being recognized when control of the skin care, health and wellness products are transferred to its customer at the Companys office or shipment of the goods. The revenue is recorded net of estimated discounts and return allowances. Products are given 60 days for returns or exchanges from the date of purchase. Historically, there were insignificant sales returns. Under the Companys network marketing business, the Company issues product coupons to members and distributors when these customers made purchases above certain thresholds set by the Company. Depending on the type of product coupons issued, the coupons carry varying values and can be used by the customers for reduction in the transaction price of product purchases within the coupon validity period. The value of the product coupons issued is recorded as a reduction of the Companys revenue account upon issuance; the corresponding amount credited to the customer deposits account. Amounts in customer deposits will be reversed when the coupons are used. The Companys coupons have a validity period of between six and twelve months. If the Companys customers did not utilize the coupons after the validity period, the Company would recognize the forfeiture of the originated sales value of the coupons as net revenues. *Sales of products for the provision of complementary health therapies* - *Performance obligations satisfied at a point in time* Products for the provision of complementary health therapies are predominantly Chinese herbs in different forms, processed or otherwise, for prescriptions for treating non-communicable diseases. The Company based on the health screening test report to prescribe the products for the provision of complementary health therapies, the Company deliver the products to the customers during the consultation session. *Provision of Health and Wellness services* - *Performance obligations satisfied at a point in time* The Company carries out its Wellness program, where the Companys products are bundled with health screening test. The health screening test is considered as separate performance obligations. The promises to deliver the health screening test report is separately identifiable, which is evidenced by the fact that the Company provides separate services of delivering the health screening test report. The Company based on the health screening test contracts with customers, establishes the selling price for the health screening test and place order to the health screening center. The Company obtains control of the test report before they are delivered to the customers. The Company analyze the test report, provides consultations to the customers, bundle it with the Companys products and services depending on the customers needs. The Company derives its revenues from sales contracts with its customers with revenues being recognized when the test reports are completed and delivered to its customers during the consultation session in person. *Sales of products and services for the operations in green energy* ** - *Performance obligations satisfied over time* ** The Company provides products, technical knowledge and solutions for sustainability and energy savings. The Company delivered the products to the customers and enhances the products that the customer controls. The products that the Company created has no alternative use to the Company. The Company has an enforceable right to receive payment for performance completed to date, the Company recognized revenue based on the percentage of cost incurred. | 32 | | **Fair value of financial instruments** The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: | | | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | | | | | | | | | | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | | | | | | | | | | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. | | Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (ASUs). Management periodically reviews new accounting standards that are issued. | 33 | | In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU 2023-09 requires companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements. In March 2024, the FASB issued ASU 2024-01 Compensation Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU clarify how an entity determines whether a profits interest or similar award is within the scope of Accounting Standards Codification (ASC) 718, Compensation Stock Compensation, by adding illustrative guidance. The guidance in ASU 2024-01 is effective for annual reporting periods beginning after December 15, 2024, and can be applied either retrospectively to all prior periods presented in the consolidated financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. Early adoption is permitted. The adoption of ASU 2024-01 is not expected to have any impact on the Companys consolidated financial statements. In March 2024, the FASB issued ASU 2024-02 Codification Improvements Amendments to Remove References to the Concepts Statements. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The amendments in this update are effective for annual reporting periods beginning after December 15, 2024 and are not expected to have a significant impact on our financial statements. In November 2024, the FASB issued ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disclosures of additional information of the nature of expenses included in the income statement as well as disclosures about specific expense categories in the notes to the financial statements. The requirements of the ASU are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, which early adoption permitted. This update can be applied either retrospectively to any or all prior periods presented in the consolidated financial statements or prospectively to financial statements issued for reporting period after the effective date of this Update. The Company is currently evaluating the effect of adopting this ASU. In November 2024, the FASB issued ASU 2024-04 Debt Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The clarification is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of adopting of this ASU. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows. Recently adopted Accounting Pronouncements Accounting Standards Adopted in 2024 In March 2023, the FASB issued ASU No. 2023-01 Leases (Topic 842) Common Control Arrangements. This ASU provides guidance in ASC Topic 842 that Leasehold improvements associated with common control leases should be (i) amortized by the lessee over the useful life of the leasehold improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset through a lease, and (ii) accounted for as a transfer between entities under common control through an adjustment to equity if and when the lessee no longer controls the use of the underlying asset. The ASU 2023-01 is effective for reporting periods beginning after December 15, 2023. In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. The adoption of the accounting standards has no material impact on the consolidated financial statements for the year ended December 31, 2024. **ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** *Foreign exchange risk*. Substantially most of our revenues are denominated in the Malaysian Ringgit while most of our expenses are denominated in Malaysian Ringgit, U.S. dollar and Hong Kong Dollar. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments. Although in general, our exposure to foreign exchange risks should be limited, the value of an investment in our Common Stock may be affected by the foreign exchange rate between U.S. dollar and Malaysian Ringgit; and U.S. dollar and Hong Kong Dollar because the value of our business is effectively denominated in Malaysian Ringgit and Hong Kong Dollar, while the Common Stock is traded in U.S. dollars. *Credit risk*. Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. | 34 | | **ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA** The financial statements required by this item are located in PART IV of this Annual Report. **ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE** None. **ITEM 9A. CONTROLS AND PROCEDURES** Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on the foregoing evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below. Internal Control Over Financial Reporting Our management, including our chief executive officer and chief financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the companys chief executive officer and chief financial officer and effected by the companys board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: | | | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; | | | | | | | | | | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and | | | | | | | | | | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the companys assets that could have a material effect on the financial statements. | | | 35 | | Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of December 31, 2024, our management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments. Based on such evaluation, the Companys management, including our chief executive officer and chief financial officer, concluded that, during the period covered by this Report, internal controls and procedures over financial reporting were not effective. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. Identified Material Weakness A material weakness in internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Management, including our chief executive officer and chief financial officer, identified the following material weaknesses during its assessment of internal controls over financial reporting as of December 31, 2024: (i) insufficient full-time personnel with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions, address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP; (ii) lack of a functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures and lack of adequate policies and procedures in internal audit function to ensure that the Companys policies and procedures have been carried out as planned. | 36 | | Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the companys internal controls. Managements Remediation Initiatives In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we will prepare written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines, to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions. To further strengthen the Companys internal controls, we plan to initiate the following measures going forward: | 1. | We plan to engage a consulting firm that specializes in compliance and internal controls as a temporary solution to improve the internal control. | | | | | | | 2. | Once we hire additional employees, we intend to initiate a comprehensive training program and development plan to provide ongoing company-wide trainings regarding internal control and requirements of U.S. GAAP financial statements and related disclosures, with particular emphasis on our accounting staff. | | We anticipate that these initiatives will be at least partially, if not fully, implemented by the end of fiscal year 2025. Changes in internal controls over financial reporting There were no significant changes in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting: This annual report does not include an attestation report of the Companys registered independent public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered independent public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this Annual Report on Form 10-K. **ITEM 9B. OTHER INFORMATION** None. | 37 | | **PART III** **ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE** Our executive officers and directors and their respective ages as of the date hereof are as follows: | NAME | | AGE | | POSITION | | | How Kok Choong | | 61 | | Chief Executive Officer, President, Director, Chief Operating Officer, Chairman of the board of Directors and Secretary | | | Wilfrendo Fernando Cortizo | | 68 | | Executive Director | | | John Hing Vong | | 77 | | Executive Director | | | Lee Kam Fan, Andrew | | 63 | | Chief Financial Officer | | | Ramesh Ruben Louis | | 47 | | Independent Director | | | Ni Luh Dharma Kerti Natih | | 60 | | Independent Director | | | Kadende Kaiser Rose Marie | | 63 | | Independent Director | | | Ting Wan Lock | | 33 | | Vice President, Corporate Finance | | Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years. **Dr. How Kok Choong** is our founder and serves as our Chief Executive Officer, President, Director Chief Operating Officer, Chairman of the Board of Directors and Secretary since 2016. Dr. How is primarily responsible for overall development and business strategies, financial, administrative and human resources affairs of the Company. Dr. How has more than 20 years of experience in the senior management roles in the health and wellness industry. From 1987 to 2016, Dr. How was with the San Hin Group of Companies and his last position held was the group chief executive officer for the group. Since August 2003, Dr. How began to work for AGAPE Superior Living International Group as the global president and continues to hold this position. Further, since September 2009, Dr. How has worked for TH3 Holdings Sdn Bhd as president. Dr. How obtained a masters degree and a doctorate degree in Business Administrative from Newport University, USA in December 1997 and December 2000, respectively. In Malaysia, Dr. How Kok Choong was recognized by the Junior Chamber Malaysia (JCM) as an Outstanding Young Malaysian 2003, and was awarded the title of Justice of Peace of Malaysia since 2005. Dr. How Kok Choong received the Outstanding Asian Community Contribution Award in 2011, Malaysia Top Team 50 Enterprise Award in 2011 and 2016, The Contributor Award (Medical and Health Research) in 2012, Man of The Year in Worldwide Excellence Award in 2015, Man of The Year in McMillan Global Award in 2016, The Distinguished Asia Pacific Outstanding Entrepreneur Lifetime Achievement Award in 2019, World Outstanding Chinese Entrepreneur Lifetime Award in 2019 and Certified Professional Trainer of The International Professional Managers Association in 2019. **Dr. Wilfrendo Fernando Cortizo** has more than 30 years of experience in the fields of microbiology and biotechnology. Prior to join the Company, Dr. Cortizo served as a National Health and Medical Research Council (NHMRC) Research Officer at the Department of Medicine Monash Medical School, Alfred Hospital, Melbourne Australia from 1987 to 1989. From 1989 to 1990, Dr. Cortizo served as a Protein Chemist and Research Officer at the Commonwealth Serum Labs (CSL) Australias largest Pharmaceutical Company. From 1991 to 1994, Dr. Cortizo worked as a Manager at a number of Production Departments at CSL Bioplasma Division. From 1994 to 1995, Dr. Cortizo served as a Project Manager at the Bioplasma Division in CSL Ltd. From 1995 to 2004, Dr. Cortizo served as a Director and the Chief Executive Officer of OMX Marketing Australia Pty. Ltd. In 1998, Dr. Cortizo worked as the International Development and Product Consultant for OMX Malaysia Sdn Bhd and OMX Marketing Philippines Pty. Ltd., Manila. From 2001 to 2003, Dr. Cortizo served a Director and the Chief Executive Director of Advance Microbials Pty. Ltd.. From 2001 to 2003, Dr. Cortizo served as a Senior Lecturer and Research Supervisor, GSIM, Swinburne University. From 2005 to 2006, Dr. Cortizo served as a Consultant and Technical Advisor of Pathlab Australia Pty Ltd and ADL Laboratories USA. From 2005 to 2006, Dr. Cortizo was appointed as the Nutrition and Scientific Consultant by Vitop Group Ltd China. From 2006 to 2007, Dr. Cortizo served as an International Business Director for Goodgene Korea. From 2007 to 2014, Dr. Cortizo served as the Chief Executive Officer and International Business Director of YourGene LLC. From 2009 to 2015, Dr. Cortizo served as a Consultant of the Agape Superior Living, Product Specialist and President of Superlife Global. From 2009 to 2019, Dr. Cortizo served as a Director and the Chief Executive Officer of the Ageless Partners, Ageless Asia Malaysia, Thailand and Indonesia. From 2014 to 2019, Dr. Cortizo served as a Director and the Chief Executive Officer of the Ageless Asia, Indonesia and a Director PT. of Vichii Indonesia Jaya. Dr. Cortizo, Phd completed his early University studies at Monash University in the Biochemistry Department and in the Faculty of Medicine. He graduated with a doctorate degree of philosophy from Monash University in 1988, and graduated with a bachelor of science with honours from Monash University in 1981. | 38 | | **Mr. Lee Kam Fan, Andrew** serves as our chief financial officer. Prior to joining the Company in January 2021, Mr. Lee has approximately 38 years of accounting and finance related experience. Since July 2014, Mr. Lee has been the proprietor of Andrew Lee & Company. From June 2010 to June 2022, Mr. Lee served as an adjunct lecturer of the HKICPA Professional Examinations Preparatory Programme at HKU Space. From January 2011 to October 2015, Mr. Lee served as the managing director at ANSA CPA Limited. From September 2010 to October 2012, Mr. Lee served as an independent non-executive director at Sunrise (China) Technology Group Limited (currently referred to as KOALA Financial Group Limited (Hong Kong stock code: 08226)). From March 2006 to April 2017, Mr. Lee was in cooperation with Friedman LLP to oversee financial statements are prepared in accordance with U.S. GAAP. From October 2000 to December 2010, Mr. Lee served as an audit manager and subsequently a partner at Clodick & Company. From April 1998 to September 2000, Mr. Lee served as a director at Nitwell Business Services Limited. From August 1994 to April 1998, Mr. Lee was an assistant audit manager at Cheng, Kwok & Chang. From July 1990 to July 1994, Mr. Lee served as an accountant at K.C. Manufacturing Company. From April 1989 to July 1990, Mr. Lee served as an accountant at Haldane, Midgley & Booth. From January 1987 to April 1989, Mr. Lee served as an audit senior at RSM Nelson Wheeler. From October 1985 to December 1986, Mr. Lee served as an audit assistant at Andrew Ma & Company. From April 1983 to September 1985, Mr. Lee served as an audit Clerk at Anthony Y.T. Tse & Company. Mr. Lee is an associate member of the Institute of Chartered Accountants in England and Wales since April 2019, a certified public accountant (practicing) of the Hong Kong Institute of Certified Public Accountants since May 2010, a fellow member of the Association of International Accountants since December 2006, and an associate member and chartered tax advisor of the Tax Institute of Hong Kong from July 2010 to December 2023. Mr. Lee received his bachelors degree in business administration at the Open University of Hong Kong (currently referred to as Hong Kong Metropolitan University) in June 2004 and his masters degree in professional accounting from the Hong Kong Polytechnic University in November 2010. **Mr. Ramesh Ruben Louis, PhD** serves as our independent director since October 13, 2023. Prior to joining the Company, Mr. Louis, PhD has approximately 25 years of accounting and finance related experience. Since January 2011, Mr. Louis, PhD has been an executive director and principal consultant of Assurance Threesixty Consulting. Since November 2009, Mr. Louis, PhD has been a professional freelance trainer and consultant at My Learning Training Resources, where he conducted various training courses including training for MIA, ACCA, CPA Australia ISCA Singapore. From May 2006 to October 2009, Mr. Louis, PhD was an executive director at Anuarul Azizan Chew Group, where he was involved in internal audit, risk management and review/assessment of internal controls assignments of various organisations including public listed companies in Malaysia. From 2000 to 2006, Mr. Louis, PhD worked in BDO Binder, where he worked in areas including corporate finance and assurance advisory, his last role being assistant audit manager. From 1997 to 1998, Mr. Louis, PhD was an audit assistant at Arthur Andersen & Co. Mr. Louis, PhD graduated with a bachelor of accounting from the National University of Malaysia in 2000, and graduated with a master of business administration from the University of Strathclyde, United Kingdom in 2012. Mr. Louis, PhD obtained a doctorate of philosophy from the University of Malaya in September, 2021. Mr. Louis, PhD became a member of CPA Malaysia in 2005, a member of the Institute of Internal Auditors Malaysia in 2010 and a member of the Association of Chartered Certified Accountants in 2011. Mr. Louis, PhD is also a director of AsiaFIN Holdings Corp. **Dr. John Hing Vong , PhD** serves as our independent director from October 13, 2023. On November 15, 2024, Dr. Vong resigned as our independent director and serve as our executive director and deputy chairman of the Company. Prior to joining the Company, Dr. Vong, PhD has over 44 years of fintech and education experience. Dr. Vong, Phd is currently the lead of sustainable finance at ClimateWorks Australia since September 2021, a non-executive independent council member of Regional Bank since June 2013, and a senior technical specialist of the United Nations since May 2003. Dr. Vong, PhD has been a senior technical specialist at Asian Development Bank from January 2019 to February 2022, and a senior technical consultant at World Bank Group from September 2006 to June 2021. Dr. Vong, PhD has been a professor at the National University of Singapore from May 2015 to April 2017, foundation director of the Fintech Academy at the Singapore Management University from June 2013 to December 2014 and associate professor at James Cook University Singapore from February 2012 to June 2013. From October 2008 to October 2011, Dr. Vong, PhD was a deputy chief executive officer at Sacombank in Vietnam. In 2002 Dr. Vong, PhD was a senior consultant at PAGF- DFAT Australia in the Philippines. From February 1999 to February 2001, Dr. Vong, PhD was a team leader at Deloitte Australia. From 1994 to 1998 Dr. Vong, PhD was a regional director- lecturer of the Massachusetts Institute Technology and Nanyang Fellows Program at Nanyang Technological University. From May 1978 to August 1993, Dr. Vong, PhD was a senior executive at HSBC Holdings plc in various offices in Australia and Asia. Dr. Vong, PhD completed the public disputes program in advanced negotiation at MIT-Harvard University Consensus Building Institute in 2006. Dr. Vong, PhD graduated with a BA in economics at Birmingham City University, and a MBA in economics strategy and finance at University of Bradford. He received his PhD from the University of Bradford in MIS business intelligence. Dr. Vong, PhD is currently a member of CPA Australia. **Dr. Natih** serves as our independent director since October 1, 2024. Prior to joining the Company, Dr. Natih has more than 20 years of experience in the field of health services. Dr. Natih has been served as a Certified Hospital Accreditation Surveyor at KARS and Ministry of Health of Indonesia from 2000 to present. Prior to joining the Company, Dr. Natih served as a director at the Department of Hospital Planning and Operations of Ngoerah General Hospital (formerly known as RSUP Sanglah Denpasar) in Bali, Indonesia from 2000 to 2023. From 2023 to 2024, Dr. Natih served as a director at the Department of Medical and Nursing Care of RSP Goenawan in Cisarua Bogor, Indonesia. Dr. Natih completed her early University studies at Gadjah Mada University in Yogyakarta, Indonesia in the Faculty of Medicine. She graduated with a Master of Public Health (Health Services Management) from Flinders University in Adelaide, Australia in 2006. Dr. Natih is a Certified Hospital Accreditation Expert at KARS Indonesia and a Certified Hospital Accreditation Surveyor Competence at the Ministry of Health of Indonesia. **Dr. Rose, PhD** serves as our independent director since November 15, 2024. Prior to joining the Company, Dr. Rose, PhD has more than 25 years of professional experience, serving in various roles in higher education as a college professor; in international development as a researcher, manager and mentor; and as an independent health and wellness coach. Dr. Rose, PhD is the Founder of Season of Health, a business specializing in health coaching, training and consultant services. From 2010 to 2012, Dr. Rose, PhD served as a Transition Program Manager at the U.S. Centers for Disease Control and Prevention in Kigali, Rwanda. From 2009 to 2010, Dr. Rose, PhD served as the Consultant and De Facto Country Director for US African Development Foundation Funded Program at Kilimanjaro International Burundi Ltd. She was also an Independent Consultant for community development in 2008. Dr. Rose, PhD served as a Regional Manager for Southern Africa and Research Analyst at Geneva Global Inc in Wayne, Pennsylvania from 2002 to 2007. From 2001 to 2005, Dr. Rose, PhD worked at the University of Pennsylvania in Philadelphia, Pennsylvania as the Research Associate of Womens Studies Program and African Studies Center and Visiting Scholar of the Solomon Asch Center for Study of Ethno-political Conflict. From 1997 to 2000, Dr. Rose PhD was a Lecturer and Assistant Professor at the Department of Sociology, Anthropology, and Social Work of Mississippi State University in Mississippi State, Mississippi. Dr. Rose, PhD completed a Bachelor of Arts in English Language and Literature at University of Burundi in 1988. Dr. Rose, PhD obtained a doctorate of philosophy in Folklore and Womens Studies from Indiana University in 1998. She also obtained a Diploma in Integrative Nutrition Health Coach at Institute for Integrative Nutrition in 2013. **Mr. Ting Wan Lock, CFA**, has served as Vice President, Corporate Finance of Agape ATP Corporation (NASDAQ: ATPC) since 2020. He has led critical initiatives, including the companys Nasdaq uplift process, mergers and acquisitions, and capital market analyses, while ensuring compliance with regulatory requirements and listing standards. Prior to joining Agape ATP, Mr. Ting held roles in corporate finance and advisory, including Corporate Advisor at Vetton Sdn Bhd, Assistant Manager at Greenpro Global Capital (NASDAQ: GRNQ), and Senior Associate in Corporate Finance at Kenanga Investment Bank Berhad. His experience spans IPOs, financial modeling, strategic planning, and stakeholder engagement. Mr. Ting began his career as a Senior Auditor at Crowe AF 1018, where he focused on audit planning and risk assessment. He is a CFA charterholder and holds a Bachelor of Commerce from the University of Queensland. | 39 | | **Corporate Governance** The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the SEC) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. In lieu of an Audit Committee, the Companys Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Companys financial statements and other services provided by the Companys independent public accountants. The Board of Directors and the Chief Executive Officer of the Company review the Companys internal accounting controls, practices and policies with advice from third party consultants. *Audit Committee* Mr. Louis, PhD, Dr. Natih and Dr. Rose PhD are the members of our Audit Committee where Mr. Louis, PhD serve as the chairman. All members of our Audit Committee satisfy the independence standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees. We adopted a charter for the Audit Committee pursuant to our IPO. In accordance with our Audit Committees Charter, our Audit Committee shall perform several functions, including: | | | evaluate the independence and performance of, and assess the qualifications of, our independent auditor, and engage such independent auditor; | | | | | | | | | | approve the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approve in advance any non-audit service to be provided by the independent auditor; | | | | | | | | | | monitor the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; | | | | | | | | | | reviewing our financial statements and our managements discussion and analysis of financial condition and results of operations to be included in our annual and quarterly reports to be filed with the SEC; | | | | | | | | | | oversee all aspects our systems of internal accounting control and corporate governance functions on behalf of the board; | | | | | | | | | | review and approve in advance any proposed related-party transactions and report to the full board of directors on any approved transactions; and provide oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the board of directors, including Sarbanes-Oxley Act implementation, and make recommendations to the board of directors regarding corporate governance issues and policy decisions. | | It is determined that Mr. Louis, PhD possesses accounting or related financial management experience that qualifies him as an audit committee financial expert as defined by the rules and regulations of the SEC. | 40 | | *Compensation Committee* Mr. Louis, PhD, Dr. Natih and Dr. Rose, PhD are the members of our Compensation Committee where Dr. Natih is the chairman. All members of our Compensation Committee qualified as independent under the current definition promulgated by NASDAQ. We adopted a charter for the Compensation Committee pursuant to our IPO. In accordance with the Compensation Committees Charter, the Compensation Committee responsible for overseeing and making recommendations to the board of directors regarding the salaries and other compensation of our executive officers and general employees and providing assistance and recommendations with respect to our compensation policies and practices. *Nominating and Governance Committee* Mr. Louis, PhD, Dr. Natih and Dr. Rose, PhD are the members of our Nominating and Governance Committee where Dr. Rose, PhD serve as the chairman. All members of our Nominating and Governance Committee qualified as independent under the current definition promulgated by NASDAQ. We adopted a charter for the Nominating and Governance Committee pursuant to our IPO. In accordance with the Nominating and Governance Committees Charter, the Nominating and Corporate Governance Committee responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies. *Director Independence* Our board of directors reviewed the materiality of any relationship that each of our proposed directors has with us, either directly or indirectly. Based on this review, it is determined that Mr. Louis, PhD, Dr. Natih and Dr. Rose, PhD are the independent directors as defined by NASDAQ. In addition, as required by Nasdaq rules, our board of directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each directors business and personal activities and relationships as they may relate to us and our management. | 41 | | *Involvement in Certain Legal Proceedings* Our Directors and our Executive officers have not been involved in any of the following events during the past ten years: | 1. | Bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | | | | | | | 2. | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | | | | | | | 3. | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; or | | | | | | | 4. | Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. | | | | | | | 5. | Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; | | | 6. | Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; | | | | | | | 7. | Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: | | | | | | | | (i) | Any Federal or State securities or commodities law or regulation; or | | | | | | | | | (ii) | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or | | | | | | | | | (iii) | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; | | | | | | | 8. | Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | | *Code of Ethics* We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer, and the Board. A copy of this code is available in our employee handbook and under the About Us Code of Conduct section of our website at www.atpc.com.my. In addition, we intend to post on our website all disclosures that are required by law or the listing standards of our applicable trading market concerning any amendments to, or waivers from, any provision of the code. The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report. *Shareholder Proposals* Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment. A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Information Statement. | 42 | | **ITEM 11. EXECUTIVE COMPENSATION** Mr. How Kok Choong, the Chief Executive Officer, President, Director Chief Operating Officer, Chairman of the Board of Directors and Secretary received $403,012 and $258,005 as total salaries for the years ended December 31, 2024 and 2023 respectively. Mr. How Kok Choong had not received any (i) Stock compensation; (ii) Option awards, (iii) Non-equity incentive plan compensation, (iv) Non-qualified deferred compensation earnings and (v) Any other compensations. Dr. Wilfrendo Fernando Cortizo was appointed as an executive director and entered into an employment agreement with the Company on November 21, 2023 and the employment agreement will take immediate effect. Dr. Wilfrendo Fernando Cortizo received $36,000 and $4,000 as director fee and also entitled $60,000 and $6,667 worth of common stock as stock-based compensation for the year ended December 31, 2024 and 2023 respectively. Mr. Andrew Lee Kam Fan was appointed and entered into an employment agreement with the Company on January 12, 2021. Mr. Andrew Lee Kam Fan received $46,440 and $46,440 as total salaries for the year ended December 31, 2024 and 2023 respectively. Mr. Ramesh Ruben Louis was appointed and entered into an independent director agreement with the Company on March 30, 2022 and the independent director agreement will take effect on October 11, 2023, the listing day of our stock on NASDAQ Capital Market. Mr. Ramesh received $21,600 and $4,703 as total independent director fee for the year ended December 31, 2024 and 2023 respectively. Dr. John Hing Vong was appointed and entered into an independent director agreement with the Company on September 22, 2022 and the independent director agreement will take effect on October 11, 2023, the listing day of our stock on NASDAQ Capital Market. On November 15, 2024, Dr. Vong resigned as our independent director and serve as our executive director and deputy chairman of the Company. Dr. John Hing Vong received $23,400 and $4,703 as total independent director fee for the year ended December 31, 2024 and 2023 respectively. Dr. Ni Luh Dharma Kerti Natih was appointed and entered into an independent director agreement with the Company on October 1, 2024 and the independent director agreement will take immediate effect. Dr. Natih received $5,400 and $0 as total independent director fee for the year ended December 31, 2024 and 2023 respectively. Dr. Kadende Kaiser Rose Marie was appointed and entered into an independent director agreement with the Company on November 15, 2024 and the independent director agreement will take immediate effect. Dr. Rose received $2,700 and $0 as total independent director fee for the year ended December 31, 2024 and 2023 respectively. **Summary of Compensation** Stock Option Grants We have not granted any stock options to our executive officers since our incorporation. Employment Agreements We have entered into employment agreement with Mr. Ting Wan Lock on November 1, 2024 and with Mr. Wilfrendo Fernando Cortizo on November 21, 2023. **Compensation Discussion and Analysis** **Director Compensation** As the Chief Executive Officer, President, Director Chief Operating Officer, Chairman of the Board of Directors and Secretary, Mr. How Kok Choong is paid a monthly salary of $33,333. His salary shall accrue on a day-to-day basis, payable in arrears on the last day of each calendar month, provided that if his employment is terminated prior to the end of a calendar month, his compensation for the month shall be pro-rated to reflect his period of service up to the date of termination. Mr. Wilfrendo Fernando Cortizo is paid a monthly salary of $3,000. He is also entitled to receive a stock-based compensation of $60,000 per annum. His compensation, i.e., salary and stock-based compensation shall accrue on a day-to-day basis, payable in arrears on the last day of each calendar month, provided that if his employment is terminated prior to the end of a calendar month, his compensation for the month shall be pro-rated to reflect his period of service up to the date of termination. | 43 | | Prior to Dr. John Hing Vong resignation as our independent director on November 15, 2024, Dr. John Hinv Vong was paid quarterly independent director fee of $5,400. Upon to his appointment as our executive director on November 15, 2024, he is paid a monthly salary of $3,000. His compensation shall accrue on a day-to-day basis, payable in arrears on the last day of each calendar month, provided that if his employment is terminated prior to the end of the month, his compensation for the month shall be pro-rated to reflect his period of service up to the date of termination. As Chief Financial Officer of the Company, Mr. Andrew Lee Kam Fan is paid a monthly salary of $3,870. His salary shall accrue on a day-to-day basis, payable in arrears on the last day of each calendar month, provided that if his employment is terminated prior to the end of a calendar month, his compensation for the month shall be pro-rated to reflect his period of service up to the date of termination. Mr. Ramesh Ruben Louis as an independent director of the Company is paid quarterly independent director fee of $5,400. His compensation, i.e., independent director fee shall accrue on a day-to-day basis, payable in arrears on the last calendar day of each quarter, provided that if his employment is terminated prior to the end of the quarter, his compensation for the quarter shall be pro-rated to reflect his period of service up to the date of termination. Dr. Ni Luh Dharma Kerti Natih as an independent director of the Company is paid quarterly independent director fee of $5,400. Her compensation, i.e., independent director fee shall accrue on a day-to-day basis, payable in arrears on the last calendar day of each quarter, provided that if her employment is terminated prior to the end of the quarter, her compensation for the quarter shall be pro-rated to reflect her period of service up to the date of termination. Dr. Kadende Kaiser Rose Marie as an independent director of the Company is paid quarterly independent director fee of $5,400. Her compensation, i.e., independent director fee shall accrue on a day-to-day basis, payable in arrears on the last calendar day of each quarter, provided that if her employment is terminated prior to the end of the quarter, her compensation for the quarter shall be pro-rated to reflect her period of service up to the date of termination. **Executive Compensation Philosophy** Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officers performance. This package may also include long-term stock-based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company. **Incentive Bonus** The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Companys best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives. **Long-term, Stock Based Compensation** In order to attract, retain and motivate executive talent necessary to support the Companys long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award. **ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS** As of December 31, 2024, the Company has 3,989,056 shares of common stock issued and outstanding, which number of issued and outstanding shares of common stock have been used throughout this report. | Name and Address of Beneficial Owner | | Shares of Common Stock Beneficially Owned | | | Common Stock Voting Percentage Beneficially Owned | | | Voting Shares of Preferred Stock | | | Preferred Stock Voting Percentage Beneficially Owned | | | Total Voting Percentage Beneficially Owned | | | | Executive Officers and Directors | | | | | | | | | | | | | | | | | | | | | | | How Kok Choong, Chief Executive Officer, President, Director Chief Operating Officer, Chairman of the Board of Directors and Secretary; collectively this includes HKC Holdings Sdn. Bhd.* | | | 979,876 | | | | 24.6 | % | | | - | | | | - | | | | 24.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Mr. Wilfrendo Fernando Cortizo | | | 5,144 | | | | 0.1 | % | | | - | | | | - | | | | 0.1 | % | | | | | | | | | | | | | | | | | | | | | | | | | | John Hing Vong | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew Lee Kam Fan | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | Ramesh Ruben Louis | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | Ni Luh Dharma Kerti Natih | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | Kadende Kaiser Rose Marie | | | - | | | | - | | | | - | | | | - | | | | - | | | | 44 | | Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the persons actual voting power at any particular date. **ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE** On May 8, 2020, the Company acquired approximately 99.99% of the issued share capital of Agape Superior Living Sdn Bhd from Dr. How Kok Choong. Dr. How received an aggregate consideration of $1,714,003, which was determined based on the net asset carrying value of ASL as at March 31, 2020. The aggregate consideration was satisfied by (i) the offset of the consideration whereby the Company has a loan receivable of $656,495 as of March 31, 2020 due from Dr. How; and (ii) the allotment and issue of the common stock of the Company. The Company allotted and issued 162,694 shares of the Companys common stock, each with a par value $0.0001, representing approximately 0.0432% of the total issued and outstanding shares in the Company after the issuance of the shares, which was valued at $1,057,508 based on the closing price of $6.50 of the Company as quoted on the OTC Market on March 31, 2020. On July 1, 2020, the Company and Dr. How Kok Choong agreed to amend the Share Exchange agreement and enter into a supplemental agreement share exchange agreement (the **Supplemental Share Exchange Agreement**). In accordance with Supplemental Share Exchange Agreement, Dr. How received an aggregate consideration of $1,804,046, which was determined based on the net asset carrying value of ASL as at March 31, 2020. The aggregate consideration shall be satisfied by (i) the offset of the consideration whereby the Company has a loan receivable of $656,495 as of March 31, 2020 due from Dr. How; and (ii) the allotment and issuance of common stock of the Company. The Company allotted and issued 176,547 shares of the Companys common stock, par value $0.0001 (the **Shares**), representing approximately 0.0469% of the total issued and outstanding shares in the Company after the issuance of the Shares, which is valued at $1,147,551 based on the closing price of $6.50 of the Company as quoted on the OTC Market on March 31, 2020. On February 1, 2021, Dr. How Kok Choong, our CEO and director, was appointed as the non-executive Chairman of Vettons. Vettons Sdn Bhd (Vettons) is an e-commerce company through which ASL conducts some of its distribution activities to its members. As of December 31, 2020, the Company has accounts receivable of $172,757 from Vettons, representing 100% of our accounts receivable. In December 2021, there were share forfeiture agreements (the Share Forfeiture Agreements) between the Company and (i) HKC Talent Limited; (ii) various stockholders of the Company (the Forfeiting Stockholders), pursuant to which: (i) HKC Talent Limited had agreed to forfeiture of 41,750,000 shares of common stock of the Company, and (ii) the Forfeiting Stockholders had agreed to forfeiture, in aggregate, 44,242,000 shares of common stock of the Company. Included in (ii) is 11,242,000 shares forfeited from HKC Holdings Sdn. Bhd, a company in which Dr. How Kok Choong, is a stockholder. As a result, the outstanding shares was reduced by 85,992,000 shares of common stock. On January 20, 2022, a share forfeiture agreement (the Share Forfeiture Agreement) was entered between the Company and Dr. How Kok Choong, pursuant to which Dr. How agreed to forfeit 215,008,035 shares of common stock of the Company. *HKC Holdings Sdn Bhd is owned and controlled by How Kok Choong who is our executive officer and director. As such, HKC Holdings Sdn Bhd. is regarded a related party. With regards to all of the above transactions we claim an exemption from registration afforded by Section 4a(2) and/or Regulation S of the Securities Act of 1933, as amended (Regulation S) due to the fact that all sales of stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing. | 45 | | **Related Party Transactions** **The Companys related party list and relationship are as follows:** | Related parties | | Relationships | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd | - | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd. | | | | | | | | SY Welltech Sdn Bhd (formerly known as DSY Beauty Sdn Bhd) | - | The directors and shareholders of SY Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | | | | | | | DSY Wellness & Longevity Center Sdn Bhd | - | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSY Wellness & Longevity Center Sdn Bhd. | | | | | | | | TH3 Holdings Sdn Bhd | - | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 Holdings Sdn Bhd. | | | | | | | | Redboy Pictures Sdn Bhd | - | Mr. How Kok Choong, the CEO and director of the Company is also a director of Redboy Pictures Sdn Bhd. | | | | | | | | ATPC Lega Global Sdn Bhd | - | Mr. How Kok Choong, the CEO and director of the Company is also a director of ATPC Legal Global Sdn Bhd. | | | | | | | | Ando Design Sdn Bhd | - | Mr. How Kok Choong, the CEO and director of the Company is also a director of Ando Design Sdn Bhd. | | | | | | | | Mr. How Kok Choong | - | Mr. How Kok Choong, the CEO and director of the Company | | | | | | | | Mr. Yap Foo Ching (Steve Yap) | - | Mr. Yap Foo Ching, the director of the DSY Wellness International Sdn Bhd. | | | | | | | | Mr. Chew Yi Zheng | - | Mr. Chew Yi Zheng is the member of the immediate family of Mr. Yap Foo Ching (Steve Yap), the director of DSY Wellness International Sdn Bhd. | | **Related party balances as of December 31, 2024 and 2023 are as per table below:** **Amount due from related parties** | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | Prepayment of IT expenses | | $ | 1,582 | | | $ | 2,922 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Deposits for products purchases | | | - | | | | 8,171 | | | | ATPC Lega Global Sdn Bhd (Lega) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of Lega | | General expenses payment on behalf | | | 730 | | | | - | | | | Total | | | | | | $ | 2,312 | | | $ | 11,093 | | | | 46 | | **Related party balances as of December 31, 2024 and 2023 are as per table below:** **Accounts payable related parties** | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for the provision of complementary health therapies | | $ | 30,554 | | | $ | 30,439 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of beauty products | | | 71 | | | | 54 | | | | Chew Yi Zheng | | Mr. Chew Yi Zheng is the member of the immediate family of Mr. Yap Foo Ching (Steve Yap), the director of DSY Wellness International Sdn Bhd | | Render therapy and health consultation to customer | | | - | | | | 4,355 | | | | Total | | | | | | $ | 30,625 | | | $ | 34,848 | | | | 47 | | **Related party balances as of December 31, 2024 and 2023 are as per table below:** **Other payable related parties** | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchase of products for general use | | $ | 494 | | | $ | 570 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchase of products for general use | | | - | | | | 535 | | | | Mr. Yap Foo Ching (Steve Yap) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Payment on behalf of company expenses | | | - | | | | 6,534 | | | | Mr. How Kok Choong | | Mr. How Kok Choong, the CEO and director of the Company | | Commission expense | | | 356 | | | | 207 | | | | Total | | | | | | $ | 850 | | | $ | 7,846 | | | **Related party transactions for years ended December 31, 2024 and 2023, are as per table below:** **Purchases** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for the provision of complementary health therapies | | $ | 335,494 | | | $ | 272,993 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of beauty products | | | 17,600 | | | | 18,516 | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Purchases of products for the provision of complementary health therapies | | | 6,576 | | | | - | | | | Chew Yi Zheng | | Mr. Chew Yi Zheng is the member of the immediate family of Mr. Yap Foo Ching (Steve Yap), the director of DSY Wellness International Sdn Bhd | | Render therapy and health consultation to customer | | | - | | | | 4,355 | | | | Total | | | | | | $ | 359,669 | | | $ | 295,864 | | | | 48 | | **Related party transactions for years ended December 31, 2024 and 2023, are as per table below:** **Other income** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | Ando Design Sdn Bhd (Ando) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Ando. | | Rental income | | $ | 2,630 | | | $ | 2,630 | | | | Redboy Pictures Sdn Bhd (Redboy) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Redboy. | | Rental income | | | - | | | | 5,260 | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | Rental income | | | 789 | | | | 460 | | | | Total | | | | | | $ | 3,419 | | | $ | 8,350 | | | **Other purchases** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for general use | | $ | 4,243 | | | $ | 6,213 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of products for general use | | | 4,337 | | | | 7,282 | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Purchases of products for general use | | | - | | | | 368 | | | | Total | | | | | | $ | 8,580 | | | $ | 13,863 | | | | 49 | | **Related party transactions for years ended December 31, 2024 and 2023, are as per table below:** **Commission expense** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | Mr. How Kok Choong | | Mr. How Kok Choong, the CEO and director of the Company | | Commission expense | | $ | 3,012 | | | $ | 5,947 | | | | Total | | | | | | $ | 3,012 | | | $ | 5,947 | | | **Other expenses** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | IT support services fee | | $ | 59,371 | | | $ | 54,956 | | | | Ando Design Sdn Bhd (Ando) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Ando. | | Office furniture & fixture and improvements | | | 1,772 | | | | - | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of products for general use | | | 5 | | | | - | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Office rental expenses | | | 55,239 | | | | 31,563 | | | | Total | | | | | | $ | 116,387 | | | $ | 86,519 | | | **Review, Approval and Ratification of Related Party Transactions** Our board of directors created an audit committee and adopted an audit committee charter which requires the audit committee to review all related party transactions on an ongoing basis and all such transactions be approved by the audit committee. In determining whether to approve a related party transaction, the audit committee shall consider, among other factors, the following factors to the extent relevant to the related party transaction: | | | whether the terms of the related party transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a related party; | | | | | | | | | | whether there are business reasons for the Company to enter into the related party transaction; | | | | | | | | | | whether the related party transaction would impair the independence of an outside director; | | | | | | | | | | whether the related party transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or the related party, the direct or indirect nature of the directors, executive officers or the related partys interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the audit committee deems relevant; and | | | | | | | | | | any pre-existing contractual obligations. | | | 50 | | **ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES** Effective September 1, 2022, Friedman LLP, our then independent registered public accounting firm, combined with Marcum LLP and continued to operate as an independent registered public accounting firm. On October 20, 2022, our Board of Directors approved the dismissal of Friedman LLP and the engagement of Marcum Asia CPAs LLP (Marcum Asia) to serve as our independent registered public accounting firm. On April 25, 2024, the Board of Directors released Marcum Asia as the Companys independent registered public accounting firm. On April 29, 2024, the Board of Directors appointed Assentsure PAC to serve as our independent registered public accounting firm with immediate effect. The services previously provided by Marcum Asia are now provided by Assentsure PAC. CBIZ, Inc. is our tax accountant for the year ended December 31, 2022 onwards. Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to our last two fiscal years. | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Audit fees | | $ | 294,000 | | | $ | 444,400 | | | | Tax fees | | | 25,000 | | | | 25,000 | | | | Total | | $ | 319,000 | | | $ | 469,400 | | | The category of Audit fees includes fees for our annual audit, quarterly reviews and services rendered in connection with regulatory filings with the SEC, such as the issuance of comfort letters and consents. The category of Tax fees includes professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning. All of the professional services rendered by principal accountants for the audit of our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our board of directors. | 51 | | **PART IV** **ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES** **(a) Financial Statements** The following are filed as part of this report: Financial Statements The following financial statements of AGAPE ATP Corporation. and Report of Independent Registered Public Accounting Firm are presented in the F pages of this Report: | | Page | | | | | | | Index | F-1 | | | | | | | Reports of Independent Registered Public Accounting Firm | F-2 | | | | | | | Consolidated Financial Statements | | | | | | | | Consolidated Balance Sheets | F-3 | | | | | | | Consolidated Statements of Operations and Comprehensive Loss | F-4 | | | | | | | Consolidated Statements of Changes in Stockholders Equity | F-5 | | | | | | | Consolidated Statements of Cash Flows | F-6 | | | | | | | Notes to Consolidated Financial Statements | F-7 F-34 | | **(b) Exhibits** The following exhibits are filed or furnished herewith: | 3.1 | Amended Articles of Incorporation* | | | | | | | 3.2 | Bylaws** | | | | | | | 10.1 | Direct Sales Licence of Agape Superior Living Sdn Bhd issued by Ministry of Domestic Trade and Consumer Affairs, dated March 18, 2024* | | | | | | | 10.2 | Tenancy Agreement between Canggih Pesaka Sdn Bhd and Agape Superior Living Sdn Bhd, dated July 11, 2023 for Lot 1605-1606** | | | | | | | 10.3 | Tenancy Agreement between Canggih Pesaka Sdn Bhd and Agape Superior Living Sdn Bhd, dated May 24, 2023 for Lot 1705-1708** | | | | | | | 10.4 | Tenancy Agreement between Banjaran Purnama Sdn Bhd and Agpae Superior Living Sdn Bhd, dated November 12, 2024* | | | | | | | 10.5 | Tenancy Agreement between See Li Chiann and Agape Superior Living Sdn Bhd and Terence W Tulus, dated October 1, 2023** | | | | | | | 10.6 | Tenancy Agreement between DSY Wellness & Longevity Center Sdn Bhd and DSY Wellness International Sdn Bhd, dated July 1, 2024* | | | | | | | 10.7 | Form of Subscription Agreement dated February 28, 2025** | | | | | | | 23.1 | Consent of Marcum Asia CPAs LLP* | | | | | | | 97.1 | Clawback Policy** | | | | | | | 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial officer* | | | | | | | 32.1 | Section 1350 Certification of principal executive officer and principal financial officer* | | | | | | | 101.INS | Inline XBRL Instance Document** | | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document** | | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document** | | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document** | | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document** | | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document** | | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document)** | | * Filed herewith. ** Previously Filed. | 52 | | **SIGNATURES** Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | AGAPE ATP CORPORATION. | | | | (Name of Registrant) | | | | | | | | Date: March 31, 2025 | | | | | | | | | | | By: | /s/ How Kok Choong | | | | | HOW KOK CHOONG | | | | Title: | Chief Executive Officer, President, Director Chief Operating Officer, Chairman of the Board of Directors and Secretary | | | Date: March 31, 2025 | By: | /s/ LEE Kam-fan, Andrew | | | | | LEE KAM-FAN, ANDREW | | | | Title: | Chief Financial Officer | | | 53 | | **INDEX TO FINANCIAL STATEMENTS** | | Page | | | Financial Statements | | | | | | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 6783) | F-2 | | | | | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 5395) | F-3 | | | | | | | Consolidated Balance Sheets | F-5 | | | | | | | Consolidated Statements of Operations and Comprehensive Loss | F-6 | | | | | | | Consolidated Statements of Changes in Stockholders Equity | F-7 | | | | | | | Consolidated Statements of Cash Flows | F-8 | | | | | | | Notes to Consolidated Financial Statements | F-9 - F-36 | | | F-1 | | | | | **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** | | | | | To the Shareholders and the Board of Directors of Agape ATP Corporation **Opinion on the Financial Statements** We have audited the accompanying consolidated balance sheets of Agape ATP Corporation and its subsidiaries as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss, changes in shareholders equity, and cash flows for the years ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the years ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The consolidated financial statements of the Company as of December 31, 2023 and for the year then ended (collectively referred to as the FY2023), before the effects of the one for twenty reverse stock split and change in segment reporting discussed in Note 16 and Note 22 to the financial statements, were audited by other auditors whose report, dated April 1, 2024, expressed an unqualified opinion on those statements. We audited adjustments to the FY2023 consolidated financial statements to retroactively give effect to the one for twenty reverse stock split and apply the change in segment reporting, as described in Note 16 and Note 22 to the financial statements. In our opinion, such adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the Companys FY2023 consolidated financial statements other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the FY2023 consolidated financial statements as a whole. **Basis for Opinion** These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion. **Critical Audit Matters** Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. | /s/ Assentsure PAC. | | | | | | | | We have served as the Companys auditor since 2024 | | | | | | | | Singapore | | | | March 31, 2025 | | | | PCAOB ID Number 6783 | | | | F-2 | | | | | **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholders and Board of Directors of Agape ATP Corporation **Opinion on the Financial Statements** We have audited the accompanying consolidated balance sheets of Agape ATP Corporation (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders equity and cash flows for the each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the financial statements) (the 2023 and 2022 financial statements before the effects of the adjustments discussed in Note 16 and additional prior year numbers in Note 22 are not presented herein). In our opinion, the financial statements, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 16 and additional prior year numbers in Note 22, present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting related to share consolidation, or the additional prior year numbers to retrospectively apply the change in segment reporting, as described in Note 16 and Note 22 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments or additions are appropriate and have been properly applied. Those adjustments and additions were audited by other auditors. **Basis for Opinion** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. | F-3 | | | | | Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. **Critical Audit Matters** Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum Asia CPAs LLP Marcum Asia CPAs LLP We have served as the Companys auditor since 2019 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022) New York, New York April 1, 2024 | F-4 | | | | | **AGAPE ATP CORPORATION** **CONSOLIDATED BALANCE SHEETS** **(Currency expressed in United States Dollars (US$), except for number of shares)** | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | ASSETS | | | | | | | | | | | CURRENT ASSETS | | | | | | | | | | | Cash and cash equivalents (Included $1,139 and $122 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of December 31, 2024 and 2023, respectively.) | | $ | 2,040,243 | | | $ | 4,832,460 | | | | Accounts receivable, net | | | 53,651 | | | | 55,458 | | | | Other receivable | | | 2,544 | | | | 435 | | | | Amount due from related parties | | | 2,312 | | | | 11,093 | | | | Amount due from related parties | | | 2,312 | | | | 11,093 | | | | Inventories | | | 46,347 | | | | 47,907 | | | | Prepaid taxes (Included $0 and $1,670 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of December 31, 2024 and 2023, respectively.) | | | 45,426 | | | | 21,993 | | | | Prepayments and deposits (Included $7 and $7 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of December 31, 2024 and 2023, respectively.) | | | 586,172 | | | | 215,806 | | | | Total Current Assets | | | 2,776,695 | | | | 5,185,152 | | | | | | | | | | | | | | | NON-CURRENT ASSETS | | | | | | | | | | | Property and equipment, net | | | 31,463 | | | | 77,858 | | | | Intangible assets, net | | | 13,082 | | | | 17,458 | | | | Finance lease assets | | | 178,948 | | | | 86,335 | | | | Operating right-of-use assets | | | 224,595 | | | | 357,301 | | | | Investment in marketable securities | | | 13,737 | | | | 20,171 | | | | Investment in non-marketable securities | | | 1,500 | | | | - | | | | Deferred tax assets | | | - | | | | 219 | | | | Total Non-Current Assets | | | 463,325 | | | | 559,342 | | | | | | | | | | | | | | | TOTAL ASSETS | | $ | 3,240,020 | | | $ | 5,744,494 | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS EQUITY | | | | | | | | | | | CURRENT LIABILITIES | | | | | | | | | | | Accounts payable | | $ | 102,798 | | | $ | 55,585 | | | | Accounts payable related parties | | | 30,625 | | | | 34,848 | | | | Accounts payable related parties | | | 30,625 | | | | 34,848 | | | | Customer deposits | | | 96,976 | | | | 101,575 | | | | Operating lease liabilities, current | | | 150,370 | | | | 138,548 | | | | Other payables and accrued liabilities ($1,478 and $899 are included in the consolidated VIE that are without recourse to the credit of Agape ATP Corporation as of December 31, 2024 and 2023, respectively.) | | | 712,436 | | | | 726,061 | | | | Other payable related parties | | | 850 | | | | 7,846 | | | | Finance lease liabilities, current | | | 21,635 | | | | 7,075 | | | | Income tax payable | | | 4,434 | | | | - | | | | Total Current Liabilities | | | 1,120,124 | | | | 1,071,538 | | | | | | | | | | | | | | | NON-CURRENT LIABILITIES | | | | | | | | | | | Operating lease liabilities, non-current | | $ | 75,425 | | | $ | 219,530 | | | | Finance lease liabilities, non-current | | | 115,350 | | | | 72,563 | | | | Total Non-Current Liabilities | | | 190,775 | | | | 292,093 | | | | | | | | | | | | | | | TOTAL LIABILITIES | | $ | 1,310,899 | | | $ | 1,363,631 | | | | | | | | | | | | | | | COMMITMENTS AND CONTINGENCIES (Note 19) | | | - | | | | - | | | | | | | | | | | | | | | STOCKHOLDERS EQUITY | | | | | | | | | | | Preferred stock, $0.0001 par value; 200,000,000 shares authorized; None issued and outstanding | | | - | | | | - | | | | Common Stock, par value $0.0001; 50,000,000 shares authorized, 3,989,056 and 3,855,101 shares issued and outstanding as of December 31, 2024 and 2023, respectively.* | | | 399 | | | | 386 | | | | Additional paid in capital | | | 11,422,708 | | | | 11,386,055 | | | | Treasury Stock, par value $0.0001; 0 and 6,765 shares as of December 31, 2024 and 2023, respectively.* | | | - | | | | (1 | ) | | | Accumulated deficit | | | (9,518,045 | ) | | | (7,047,571 | ) | | | Accumulated other comprehensive income | | | 27,852 | | | | 30,215 | | | | TOTAL AGAPE CORPORATION STOCKHOLDERS EQUITY | | | 1,932,914 | | | | 4,369,084 | | | | | | | | | | | | | | | NON-CONTROLLING INTERESTS | | | (3,793 | ) | | | 11,779 | | | | | | | | | | | | | | | TOTAL EQUITY | | | 1,929,121 | | | | 4,380,863 | | | | | | | | | | | | | | | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | | $ | 3,240,020 | | | $ | 5,744,494 | | | | * | Issued and outstanding shares of common stock and treasury stock have been adjusted on a retroactive basis to reflect 1-for-20 reverse stock split effective on August 30, 2024. | | The accompanying notes are an integral part of these consolidated financial statements. | F-5 | | | | | **AGAPE ATP CORPORATION** **CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS** **(Currency expressed in United States Dollars (US$), except for number of shares)** | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | REVENUE | | | 1,322,747 | | | | 1,431,088 | | | | | | | | | | | | | | | COST OF REVENUE | | | (563,599 | ) | | | (494,516 | ) | | | | | | | | | | | | | | GROSS PROFIT | | | 759,148 | | | | 936,572 | | | | | | | | | | | | | | | SELLING | | | (162,712 | ) | | | (629,003 | ) | | | COMMISSION | | | (34,905 | ) | | | (88,132 | ) | | | GENERAL AND ADMINISTRATIVE | | | (3,134,874 | ) | | | (2,366,016 | ) | | | TOTAL OPERATING EXPENSES | | | (3,332,491 | ) | | | (3,083,151 | ) | | | | | | | | | | | | | | LOSS FROM OPERATIONS | | | (2,573,343 | ) | | | (2,146,579 | ) | | | | | | | | | | | | | | OTHER INCOME (EXPENSES) | | | | | | | | | | | Other income, net | | | 29,209 | | | | 5,724 | | | | Interest income | | | 67,930 | | | | 29,249 | | | | Unrealized holding (loss) gain on marketable securities | | | (5,018 | ) | | | 3,493 | | | | Gain on disposal of property and equipment | | | 112 | | | | 1,753 | | | | TOTAL OTHER INCOME, NET | | | 92,233 | | | | 40,219 | | | | | | | | | | | | | | | LOSS BEFORE INCOME TAXES | | | (2,481,110 | ) | | | (2,106,360 | ) | | | | | | | | | | | | | | INCOME TAX EXPENSE | | | (4,934 | ) | | | (3,575 | ) | | | | | | | | | | | | | | NET LOSS | | | (2,486,044 | ) | | | (2,109,935 | ) | | | | | | | | | | | | | | NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | | | 15,570 | | | | 7,950 | | | | | | | | | | | | | | | NET LOSS ATTRIBUTABLE TO AGAPE ATP CORPORATION | | $ | (2,470,474 | ) | | $ | (2,101,985 | ) | | | | | | | | | | | | | | NET LOSS | | $ | (2,486,044 | ) | | $ | (2,109,935 | ) | | | | | | | | | | | | | | OTHER COMPREHENSIVE (LOSS) INCOME | | | | | | | | | | | Foreign currency translation adjustment | | | (2,363 | ) | | | 20,949 | | | | | | | | | | | | | | | TOTAL COMPREHENSIVE LOSS | | | (2,488,407 | ) | | | (2,088,986 | ) | | | | | | | | | | | | | | Less: Comprehensive loss attributable to non-controlling interests | | | 15,572 | | | | 8,734 | | | | | | | | | | | | | | | COMPREHENSIVE LOSS ATTRIBUTABLE TO AGAPE ATP CORPORATION | | $ | (2,472,835 | ) | | $ | (2,080,252 | ) | | | | | | | | | | | | | | LOSS PER SHARE | | | | | | | | | | | Basic and diluted | | $ | (0.63 | ) | | $ | (0.55 | ) | | | WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING* | | | | | | | | | | | Basic and diluted | | | 3,891,986 | | | | 3,790,725 | | | | * | Weighted average number of common shares outstanding have been adjusted on a retroactive basis to reflect 1-for-20 reverse stock split effective on August 30, 2024. | | The accompanying notes are an integral part of these consolidated financial statements. | F-6 | | | | | **AGAPE ATP CORPORATION** **CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY** **(Currency expressed in United States Dollars (US$), except for number of shares)** | | | Number of shares | | | Par value | | | Number of shares | | | STOCK Par value | | | PAID IN CAPITAL | | | ACCUMULATED DEFICIT | | | COMPREHENSIVE INCOME | | | CONTROLLING INTERESTS | | | STOCKHOLDERS EQUITY | | | | | | COMMON STOCK* | | | TREASURY | | | | | ADDITIONAL | | | | | | ACCUMULATED OTHER | | | NON- | | | TOTAL | | | | | | Number of shares | | | Par value | | | Number of shares | | | STOCK Par value | | | PAID IN CAPITAL | | | ACCUMULATED DEFICIT | | | COMPREHENSIVE INCOME | | | CONTROLLING INTERESTS | | | STOCKHOLDERS EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2022 | | | 3,772,601 | | | $ | 377 | | | | - | | | $ | - | | | $ | 6,477,884 | | | $ | (4,945,586 | ) | | $ | 9,266 | | | $ | 20,513 | | | $ | 1,562,454 | | | | Issuance of shares | | | 82,500 | | | | 9 | | | | - | | | | - | | | | 5,002,311 | | | | - | | | | - | | | | - | | | | 5,002,320 | | | | Shares repurchased | | | - | | | | - | | | | (6,765 | ) | | | (1 | ) | | | (94,140 | ) | | | - | | | | - | | | | - | | | | (94,141 | ) | | | Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,101,985 | ) | | | - | | | | (7,950 | ) | | | (2,109,935 | ) | | | Foreign currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 20,949 | | | | (784 | ) | | | 20,165 | | | | Balance as of December 31, 2023 | | | 3,855,101 | | | $ | 386 | | | | (6,765 | ) | | $ | (1 | ) | | $ | 11,386,055 | | | $ | (7,047,571 | ) | | $ | 30,215 | | | $ | 11,779 | | | $ | 4,380,863 | | | | Balance | | | 3,855,101 | | | $ | 386 | | | | (6,765 | ) | | $ | (1 | ) | | $ | 11,386,055 | | | $ | (7,047,571 | ) | | $ | 30,215 | | | $ | 11,779 | | | $ | 4,380,863 | | | | Redemption of shares | | | (6,765 | ) | | | (1 | ) | | | 6,765 | | | | 1 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | Share based compensation | | | 5,143 | | | | - | | | | - | | | | - | | | | 36,667 | | | | - | | | | - | | | | - | | | | 36,667 | | | | Issuance of fractional shares upon reverse stock split | | | 135,577 | | | | 14 | | | | - | | | | - | | | | (14 | ) | | | - | | | | - | | | | - | | | | - | | | | Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,470,474 | ) | | | | | | | (15,570 | ) | | | (2,486,044 | ) | | | Foreign currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,363 | ) | | | (2 | ) | | | (2,365 | ) | | | Balance as of December 31, 2024 | | | 3,989,056 | | | $ | 399 | | | | - | | | $ | - | | | $ | 11,422,708 | | | $ | (9,518,045 | ) | | $ | 27,852 | | | $ | (3,793 | ) | | $ | 1,929,121 | | | | Balance | | | 3,989,056 | | | | 399 | | | | - | | | | - | | | $ | 11,422,708 | | | $ | (9,518,045 | ) | | $ | 27,852 | | | $ | (3,793 | ) | | $ | 1,929,121 | | | The accompanying notes are an integral part of these consolidated financial statements. | F-7 | | | | | **AGAPE ATP CORPORATION** **CONSOLIDATED STATEMENTS OF CASH FLOWS** **(Currency expressed in United States Dollars (US$)** | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net loss | | $ | (2,486,044 | ) | | $ | (2,109,935 | ) | | | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | Depreciation of property and equipment | | | 52,570 | | | | 70,337 | | | | Amortization of intangible assets | | | 4,770 | | | | 5,645 | | | | Amortization of operating right-of-use assets | | | 139,867 | | | | 147,212 | | | | Amortization of finance lease assets | | | 29,445 | | | | - | | | | Gain on disposal of property and equipment | | | (112 | ) | | | (1,753 | ) | | | Unrealized holding loss (gain) on marketable securities | | | 5,018 | | | | (3,493 | ) | | | Allowance for expected credit loss | | | 98,705 | | | | 29,955 | | | | Deferred tax expense (benefit) | | | 220 | | | | (220 | ) | | | Inventory write-down | | | 7,081 | | | | - | | | | Changes in operating assets and liabilities: | | | | | | | | | | | Accounts receivables | | | (28,295 | ) | | | (53,641 | ) | | | Amount due from related parties | | | 8,889 | | | | (995 | ) | | | Inventories | | | (4,225 | ) | | | (3,216 | ) | | | Prepaid taxes | | | (22,322 | ) | | | 305,567 | | | | Prepayments and deposits | | | (434,447 | ) | | | (34,532 | ) | | | Other receivables | | | (2,105 | ) | | | 8,961 | | | | Accounts payable | | | 44,657 | | | | 28,109 | | | | Accounts payable related parties | | | (5,107 | ) | | | 10,347 | | | | Customer deposits | | | (7,340 | ) | | | (248,299 | ) | | | Operating lease liabilities | | | (139,476 | ) | | | (147,951 | ) | | | Other payables and accrued liabilities | | | 14,761 | | | | 3,485 | | | | Other payables related parties | | | (7,065 | ) | | | 3,185 | | | | Income tax payables | | | 4,340 | | | | (10,591 | ) | | | Net cash used in operating activities | | | (2,726,215 | ) | | | (2,001,823 | ) | | | | | | | | | | | | | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | Purchase of property and equipment | | | (50,162 | ) | | | (52,320 | ) | | | Proceeds from disposal of property and equipment | | | 112 | | | | 35,069 | | | | Net cash used in investing activities | | | (50,050 | ) | | | (17,251 | ) | | | | | | | | | | | | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | Shares repurchased | | | - | | | | (93,889 | ) | | | Payment of finance lease liabilities | | | (11,856 | ) | | | (9,594 | ) | | | Net proceeds from issuance of common stock | | | - | | | | 5,501,520 | | | | Net cash used in financing activities | | | (11,856 | ) | | | 5,398,037 | | | | | | | | | | | | | | | EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | | | (4,096 | ) | | | 15,067 | | | | | | | | | | | | | | | (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | | (2,792,217 | ) | | | 3,394,030 | | | | | | | | | | | | | | | CASH AND CASH EQUIVALENTS, beginning of year | | | 4,832,460 | | | | 1,438,430 | | | | | | | | | | | | | | | CASH AND CASH EQUIVALENTS, end of year | | $ | 2,040,243 | | | $ | 4,832,460 | | | | | | | | | | | | | | | SUPPLEMENTAL CASH FLOWS INFORMATION | | | | | | | | | | | Income taxes paid | | $ | 24,003 | | | $ | 34,844 | | | | Refund of prepaid tax | | $ | 1,681 | | | $ | 326,024 | | | | | | | | | | | | | | | SUPPLEMENTAL NON-CASH FLOWS INFORMATION | | | | | | | | | | | Motor vehicle acquired through finance lease | | $ | 65,761 | | | $ | 78,824 | | | | Operating lease right-of-use assets obtained in exchange for lease liabilities | | $ | - | | | $ | 428,523 | | | The accompanying notes are an integral part of these consolidated financial statements. | F-8 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **1. ORGANIZATION AND BUSINESS BACKGROUND** Agape ATP Corporation, a Nevada corporation (the Company) was incorporated under the laws of the State of Nevada on June 1, 2016. Agape ATP Corporation operates through its subsidiaries, namely, Agape ATP Corporation (AATP LB), a company incorporated in Labuan, Malaysia, and Agape Superior Living Sdn. Bhd. (ASL), a company incorporated in Malaysia. AATP LB, incorporated in Labuan, Malaysia, is an investment holding company with 100% equity interest in Agape ATP International Holding Limited (AATP HK), a company incorporated in Hong Kong. On May 8, 2020, the Company entered into a Share Exchange Agreement with Mr. How Kok Choong, CEO and director of the Company to acquire 9,590,596 ordinary shares, no par value, equivalent to approximately 99.99% of the equity interest in ASL, a network marketing entity incorporated in Malaysia. ASL is a limited company incorporated on August 8, 2003, under the laws of Malaysia. On September 11, 2020, the Company incorporated Wellness ATP International Holdings Sdn. Bhd. (WATP), a wholly owned subsidiary under the laws of Malaysia, to pursue the business of promoting wellness and wellbeing lifestyle of the community by providing services that includes online editorials, programs, events and campaigns on how to achieve positive wellness and lifestyle. On July 4, 2024, the entity changed its name to Cedar ATPC Sdn. Bhd. (CEDAR). On November 25, 2024, CEDAR increased its number of ordinary shares to 1,000,000 shares at RM 0.01 per share. On November 11, 2021, AATP LB formed an entity, DSY Wellness International Sdn. Bhd. (DSY Wellness) with an independent third party which AATP LB owns 60% of the equity interest, to pursue the business of providing complementary health therapies. The Company and its subsidiaries are principally engaged in the Health and Wellness Industry. The principal activity of the Company is to supply high-quality health and wellness products, including supplements to assist in cell metabolism, detoxification, blood circulation, anti-aging and products designed to improve the overall health system of the human body and various wellness programs. The Company is positioning itself for sustainable growth by diversifying its operations into the domain of renewable energy. This initiative is founded upon our commitment to environmental responsibility, long-term value creation, and proactive adaptation to global energy trends. On January 3, 2024, the Company formed an equity method investment entity, OIE ATPC Holdings (M) Sdn. Bhd. with Oriental Industries Enterprise (M) Sdn. Bhd. (OIE), which the Company and OIE each own 50% of the equity interest. On March 14, 2024, the Company acquired 50% of OIE ATPC Holdings (M) Sdn. Bhd. equity interest from OIE, subsequently the entity becomes a wholly owned subsidiary of the Company. On June 7, 2024, the entity changed its name to ATPC Green Energy Sdn. Bhd (AGE). On September 19, 2024, AGE increased its number of ordinary shares to 1,000,000 shares at RM 0.01 per share. On January 8, 2024, AGE formed a wholly own entity, OIE ATPC Exim (M) Sdn. Bhd (ATPC Exim). However, the Company had decided not to proceed with the continued development of ATPC Exim. There is no impact to the Groups operation. On December 25, 2024, the Company incorporated ATPC Technology Private Limited (ATPC Tech) in China, a wholly owned subsidiary in AATP HK to collaborate with local IT expertise to develop comprehensive digital wellness platform that integrates e-commerce, online consultations, chronic disease management, and robust supply chain services catering to ASEAN market. The accompanying consolidated financial statements reflect the activities of the Company, AATP LB, AATP HK, CEDAR, ASL, DSY Wellness, AGE, ATPC Exim, ATPC Tech and its variable interest entity (VIE), Agape S.E.A. Sdn. Bhd. (SEA) (See Note 4). Details of the Companys subsidiaries: SCHEDULE OF SUBSIDIARIES AND ASSOCIATES | | Subsidiary company name | | Place and date of incorporation | | Particulars of issued capital | | Principal activities | | Proportional of ownership interest and voting power held | | | | | | | | | | | | | | | | | 1. | Agape ATP Corporation | | Labuan, March 6, 2017 | | 100 shares of ordinary share of US$1 each | | Investment holding | | | 100% | | | | | | | | | | | | | | | | | | 2. | Agape ATP International Holding Limited | | Hong Kong, June 1, 2017 | 1,000,000 shares of ordinary share of HK$1 each | Wholesale of health and wellness products; and health solution advisory services | 100% | | | | | | | | | | | | | | | | | | 3. | Agape Superior Living Sdn. Bhd. | | Malaysia, August 8, 2003 | | 9,590,598 shares of ordinary share of RM1 each | | Health and wellness products and health solution advisory services via network marketing | | | 99.99% | | | | | | | | | | | | | | | | | | 4. | Agape S.E.A. Sdn. Bhd. | | Malaysia, March 4, 2004 | | 2 shares of ordinary share of RM1 each | | VIE of Agape Superior Living Sdn. Bhd. | | VIE | | | | | | | | | | | | | | | | | | 5. | Cedar ATPC Sdn. Bhd. (formerly known as Wellness ATP International Holdings Sdn. Bhd.) | | Malaysia, September 11, 2020 | | 1,000,000 shares of ordinary share of RM0.01 each | | The promotion of wellness and wellbeing lifestyle of the community by providing services that includes online editorials, programs, events and campaigns | | 100% | | | | | | | | | | | | | | | | | | 6. | DSY Wellness International Sdn Bhd. | | Malaysia, November 11, 2021 | | 1,000 shares of ordinary share of RM1 each | | Provision of complementary health therapies | | | 60% | | | | | | | | | | | | | | | | | | 7. | ATPC Green Energy Sdn. Bhd. (Formerly known as OIE ATPC Holdings (M) Sdn. Bhd.) | Malaysia, March 14, 2024 | 1,000,000 shares of ordinary share of RM0.01 each | Renewable energy | 100% | | | | | | | | | | | | | | | | | | 8. | OIE ATPC Exim (M) Sdn. Bhd. | | Malaysia, March 14, 2024 | | 1,000 shares of ordinary share of RM1 each | | Renewable energy | | | 100% | | | | | | | | | | | | | | | | | | 9. | ATPC Technology Private Limited | | China,December 25, 2024 | | 50,000 shares of ordinary share of CNY1 each | | Digital wellness platform | | | 100% | | | **** | F-9 | | | | | **** **** **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **1. ORGANIZATION AND BUSINESS BACKGROUND (CONTD)** **Business Overview** Agape ATP Corporation is a company that provides health and wellness products and health solution advisory services to our clients. The Company primarily focus its efforts on attracting customers in Malaysia. Its advisory services center on the ATP Zeta Health Program, which is a health program designed to effectively prevent diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles, and promotion of health. The program aims to promote improved health and longevity in our clients through a combination of modern medicine, proper nutrition and advice from skilled nutritionists and/or dieticians. In order to strengthen the Companys supply chain, on May 8, 2020, the Company has successfully acquired approximately 99.99% of ASL, with the goal of securing an established network marketing sales channel that has been established in Malaysia for the past 15 years. ASL has been offering the Companys ATP Zeta Health Program as part of its product lineup. As such, the acquisition creates synergy in the Companys operation by boosting the Companys retail and marketing capabilities. The subsidiary allows the Company to fulfill its mission of helping people to create health and wealth by providing a financially rewarding business opportunity to distributors and quality products to distributors and customers who seek a healthy lifestyle. Via ASL, the Company currently offers two series of programs which consist of different services and products: ATP Zeta Health Program and E.A.T.S. The ATP Zeta Health Program is a health program designed to promote health and general wellbeing designed to prevent health diseases caused by polluted environments, unhealthy dietary intake and unhealthy lifestyles. The program aims to promote improved health and longevity through a combination of modern health supplements, proper nutrition and advice from skilled dieticians as well as trained members and distributors. The Easy and Tasty Series (E.A.T.S) is crafted to bring nutritious lifestyle in convenient approach to maintain healthy living. **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for information pursuant to the rules and regulations of the Securities Exchange Commission (SEC). The consolidated financial statements include the financial statements of the Company, its subsidiaries and its VIE over which the Company exercises control and, where applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and its VIE have been eliminated upon consolidation. Going Concern For the years ended December 31, 2024 and 2023, the Company reported net losses of $2,486,044 and $2,109,935 respectively. In addition, the Company had accumulated deficit of $9,518,045 and $7,047,571 as of December 31, 2024 and 2023, respectively. The Company had working capital of $1,656,571 among which the Company held cash of $2,040,243 as of December 31, 2024, which is expected to support our operating activities for the next twelve months. The Companys liquidity is based on its ability to generate cash from operating activities and obtain financing from investors to fund its general operations and capital expansion needs. The Companys ability to continue as a going concern is dependent on managements ability to increase its revenue while controlling operating cost and expense to generate positive operating cash flow and obtain financing from outside sources. The Company raised $23,000,000 from subscribers, at the same time the Company invested the fund to enhance its capital allocation efficiency and gain exposure to new investment opportunities. The Company believes these actions will improve the Companys financial position, However, there can be no assurance that these plans and arrangements can be successfully executed and the outcome of these plans are uncertain. | F-10 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Principles of consolidation Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. As of and for the year ended December 31, 2024, SEA, the only VIE of the Company has no significant operations. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Companys consolidated financial statements include allowance for inventories obsolescence, impairment of long-lived assets, allowance for deferred tax assets, allowance for credit losses, allowance for estimation of coupon redemption and the assumptions used in the valuation of the derivative financial instruments. Actual results could differ from these estimates. Cash and cash equivalents Cash and cash equivalents represent cash on hand, time deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. Accounts receivable Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on credit term. The carrying value of accounts receivable is reduced by an allowance that reflects the Companys best estimate of the amounts that will not be collected. An allowance for expected credit loss is recorded in the period when a loss is probable based on an assessment of collectivity by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily base on similar business line, service or product offerings and on an individual basis when the Company identifies specific customers with known disputes or collectivity issues. In determining the amount of the allowance for expected credit loss, the Company considers historical collectivity based on past due status, the age of the accounts receivable balances, credit quality of the Companys customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Companys ability to collect from customers. Accounts receivable balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Companys management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2024 and December 31, 2023, the Company recorded $32,857 and $542 allowance for expected credit loss. | F-11 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Inventories Inventories consist of raw materials and finished goods. Raw materials are valued at cost and finished goods are valued at the lower of cost or net realizable value using the first-in first-out method. Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value. For the years ended December 31, 2024 and 2023, the Company recognized $7,081 and $0 inventory write-down; and $0 and $10,899 inventory write-off, respectively. Prepaid taxes Prepaid taxes include prepaid income taxes that will either be refunded or utilized to offset future income tax. Prepayments and deposits Prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases or service providers for future services. This amount is refundable and bears no interest. For any prepayments and deposits determined by management that such advances will not be in receipts of inventories, services, or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its prepayments and deposits on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for expected credit loss after management has determined that the likelihood of collection is not probable. The Companys management continues to evaluate the reasonableness of the allowance policy and update it if necessary. For the years ended December 31, 2024 and 2023, there were no write-off for allowance for expected credit loss. There was $67,768 and $0 allowance for expected credit loss recorded as of December 31, 2024 and 2023 Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with no residual value. The estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT | Classification | | Useful Life | | | | | | | | Computer and office equipment | | 5-7 years | | | Furniture & fixtures | | 6-7 years | | | Motor vehicle | | 5 years | | | Leasehold improvements | | Shorter of the remaining lease term or the estimated useful life | | The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. | F-12 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Intangible assets, net Intangible assets, net, are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF INTANGIBLE ASSETS, NET | Classification | | Useful Life | | | | | | | | Computer software | | 5 years | | Impairment for long-lived assets Long-lived assets, including property and equipment, and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2024 and 2023, no impairment of long-lived assets was recognized. Investment in marketable securities The Company follows the provisions of ASU 2016-01, *Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities*. Investments in marketable equity securities (non-current) are reported at fair value with changes in fair value recognized in the Companys consolidated statements of operations and comprehensive loss in the caption of unrealized holding gain loss on marketable securities in each reporting period. | F-13 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Customer deposits Customer deposits represent amounts advanced by customers on product orders and unapplied unexpired coupons. Customer deposits are reduced when the related sale is recognized in accordance with the Companys revenue recognition policy. Revenue recognition The Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASC Topic 606). The core principle underlying the revenue recognition of this ASU allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Companys revenue streams are recognized at a point in time for the Companys sale of health and wellness products. The ASU requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of substantially collection. *Sales of Skin Care, Health and Wellness products* - *Performance obligations satisfied at a point in time* The Company derives its revenues from sales contracts with its customers with revenues being recognized when control of the skin care, health and wellness products are transferred to its customer at the Companys office or shipment of the goods. The revenue is recorded net of estimated discounts and return allowances. Products are given 60 days for returns or exchanges from the date of purchase. Historically, there were insignificant sales returns. Under the Companys network marketing business, the Company issues product coupons to members and distributors when these customers made purchases above certain thresholds set by the Company. Depending on the type of product coupons issued, the coupons carry varying values and can be used by the customers for reduction in the transaction price of product purchases within the coupon validity period. The value of the product coupons issued is recorded as a reduction of the Companys revenue account upon issuance; the corresponding amount credited to the customer deposits account. Amounts in customer deposits will be reversed when the coupons are used. The Companys coupons have a validity period of between six and twelve months. If the Companys customers did not utilize the coupons after the validity period, the Company would recognize the forfeiture of the originated sales value of the coupons as net revenues. For the years ended December 31, 2024 and 2023, the Company recognized $3,485 and $112,166 as forfeited coupon income, respectively. As of December 31, 2024, the Company had contracts for the sales of skin care, health and wellness products amounting to $15,140 which it is expected to fulfill within 12 months from December 31, 2024. *Sales of products for the provision of complementary health therapies* *- Performance obligations satisfied at a point in time* Products for the provision of complementary health therapies are predominantly Chinese herbs in different forms, processed or otherwise, for prescriptions for treating non-communicable diseases. The Company prescribes the products for the provision of complementary health therapies based on the health screening test report. The Company delivers the products to the customers during the consultation session. For the years ended December 31, 2024 and 2023, revenues from products for the provision of complementary health therapies were $913,297 and $782,436 respectively. | F-14 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** *Provision of Health and Wellness services* - *Performance obligations satisfied at a point in time* The Company carries out its Wellness program, where the Companys products are bundled with health screening test. The health screening test is considered as separate performance obligations. The promises to deliver the health screening test report is separately identifiable, which is evidenced by the fact that the Company provides separate services of delivering the health screening test report. The Company based on the health screening test contracts with customers, establishes the selling price for the health screening test and place order to the health screening center. The Company obtains control of the test report before they are delivered to the customers. The Company analyze the test report, provides consultations to the customers, bundle it with the Companys products and services depending on the customers needs. The Company derives its revenues from sales contracts with its customers with revenues being recognized when the test reports are completed and delivered to its customers during the consultation session in person. For the years ended December 31, 2024 and 2023, revenues from providing health and wellness services are $207,546 and $250,785, respectively. *Sales of products and services for the operations in green energy* ** - *Performance obligations satisfied over time* The Company provides products, technical knowledge and solutions for sustainability and energy savings. The Company delivered the products to the customers and enhances the products that the customer controls. The products that the Company created has no alternative use to the Company. The Company has an enforceable right to receive payment for performance completed to date, the Company recognized revenue based on the percentage of cost incurred. For the years ended December 31, 2024 and 2023, revenues from green energy are $42,763 and $0, respectively. Disaggregated information of revenues by products and services are as follows: SCHEDULE OF DISAGGREGATED INFORMATION OF REVENUES | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Survivor Select | | $ | - | | | $ | 28,210 | | | | Energized Mineral Concentrate | | | 43,487 | | | | - | | | | Ionized Cal-Mag | | | 388 | | | | 119,021 | | | | Omega Blend | | | - | | | | 22,471 | | | | BetaMaxx | | | - | | | | 21,206 | | | | Iron | | | - | | | | 21,617 | | | | Trim+ | | | - | | | | 9,587 | | | | LIVO5 | | | 76,465 | | | | 130,391 | | | | Soy Protein Isolate Powder | | | 9,357 | | | | 24,271 | | | | Mix Soy Protein Isolate Powder with Black Sesame | | | 7,353 | | | | 19,348 | | | | Others Products for the provision of complementary health therapies | | | 913,297 | | | | 782,436 | | | | Skin care and healthcare products | | | 22,091 | | | | 1,745 | | | | Green Energy | | | 42,763 | | | | - | | | | Total revenues products | | | 1,115,201 | | | | 1,180,303 | | | | Health and Wellness services | | | 207,546 | | | | 250,785 | | | | Total revenues products and services | | $ | 1,322,747 | | | $ | 1,431,088 | | | Total net sales include $12,442 of revenue recognized in year 2024 that was included in customer deposit as of December 31, 2023, $17,912 of revenue recognized in year 2023 that was included in customer deposit as of December 31, 2022. | F-15 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Cost of revenue Cost of revenue comprised freight-in, the purchase cost of manufactured goods for sale to customers and purchase cost of products and services for the provision of complementary health therapies. Cost of revenue amounted to $563,599 (there is $7,081 of inventory write-downs and no inventory written-off) and $494,516 (there is no inventory write-downs and $10,899 of inventory written-off) for the years ended December 31, 2024 and 2023, respectively. Shipping and handling Shipping and handling charges amounted to $3,435 and $5,039 for the years ended December 31, 2024 and 2023, respectively. Shipping and handling charges are expensed as incurred and included in selling expenses. Advertising costs Advertising costs amounted to $54,490 and $0 for the years ended December 31, 2024 and 2023, respectively. Advertising costs are expensed as incurred and included in selling expenses. Commission expenses As with all companies in the network marketing industry, the Companys sales channel is external to the Company. The Companys external sales force is stratified into two levels based on priority recruitment. First, there are sales distributors. Second, all members recruited by a sales distributor, directly or indirectly, are referred to as sales network members. The Company pays commission to every sales distributor based on purchases made by its sales network members which includes the independent direct sales members. Top performing distributors with their own physical stores may also become stockists of the Company, whereby they enjoy benefits such as maintaining a certain amount of the Companys inventory on their store premises. The stockists shall account to the Company for all products sales from their store premises as monitored through the Companys centralized stock tracking system. The Company pays a separate commission to stockists based on revenue generated from the stockists physical stores. Commission expenses amounted to $34,905 and $88,132 for the years ended December 31, 2024 and 2023, respectively. Defined contribution plan The full-time employees of the Company are entitled to the government mandated defined contribution plan. The Company is required to accrue and pay for these benefits based on certain percentages of the employees respective salaries, subject to certain ceilings, in accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan. Total expenses for the plans were $117,425 and $158,143 for the years ended December 31, 2024 and 2023, respectively. The related contribution plans include: | | - | Social Security Organization (SOCSO) 1.75% based on employees monthly salary capped of RM 6,000; | | | | - | Employees Provident Fund (EPF) based on employees monthly salary, 13% for employee earning RM5,000 and below; and 12% for employee earning RM5,001 and above. | | | | - | Employment Insurance System (EIS) 0.2% based on employees monthly salary capped of RM 6,000; | | | | - | Human Resource Development Fund (HRDF) 1% based on employees monthly salary | | | F-16 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No penalties and interest incurred related to underpayment of income tax for the years ended December 31, 2024 and 2023, respectively. The Company conducts its business activities in Malaysia and is subject to tax in each of their jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities. Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Net income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders equity. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. Non-controlling interest Non-controlling interest consists of 40% of the equity interests of DSY Wellness held by an individual and approximately 0.01% (3 ordinary shares out of 9,590,599 shares) of the equity interests of ASL held by three individuals. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results of the Company are presented on the face of the consolidated statements of operations as an allocation of the total income or loss for the periods between non-controlling interest holders and the shareholders of the Company. | F-17 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Earnings (loss) per share The Company computes earnings (loss) per share (EPS) in accordance with ASC 260, Earnings per Share. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential common stocks (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stocks that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2024 and 2023, there were no dilutive shares. Foreign currencies translation and transaction Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive income (loss). The reporting currency of the Company is United States Dollars (US$) and the accompanying financial statements have been expressed in US$. The Companys subsidiary in Labuan maintains its books and record in United States Dollars (US$) albeit its functional currency being the primary currency of the economic environment in which the entity operates, which is the Malaysian Ringgit (MYR or RM). The Companys subsidiary in Hong Kong maintains its books and record in Hong Kong Dollars (HK$), similar to its functional currency. The Companys subsidiary and VIE in Malaysia conducts its businesses and maintains its books and record in the local currency, Malaysian Ringgit (MYR or RM), as its functional currency. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, *Translation of Financial Statement*, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders equity. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation of foreign currencies into US$1 have been made at the following exchange rates for the respective periods: SCHEDULE OF FOREIGN CURRENCIES TRANSLATION EXCHANGE RATES | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Period-end MYR : US$1 exchange rate | | | 4.47 | | | | 4.59 | | | | Period-end HKD : US$1 exchange rate | | | 7.76 | | | | 7.81 | | | | Period-end CNY : US$1 exchange rate | | | 7.30 | | | | 7.08 | | | | Foreign currency exchange rate, translation | | | 7.30 | | | | 7.08 | | | | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Period-average MYR : US$1 exchange rate | | | 4.56 | | | | 4.56 | | | | Period-average HKD : US$1 exchange rate | | | 7.80 | | | | 7.83 | | | | Period-average CNY : US$1 exchange rate | | | 7.19 | | | | 7.08 | | | | Foreign currency exchange rate period average | | | 7.19 | | | | 7.08 | | | | F-18 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Fair value of financial instruments The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: | | | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | | | | | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | | | | | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. | | Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Leases The Company adopted ASU 2016-02, Leases (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopts the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Some of the Companys leases include one or more options to renew, which is typically at the Companys sole discretion. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in re-measurement of the right of use (ROU) assets and lease liabilities. Operating ROU assets and lease liabilities are recognized at the commencement date, based on the present value of lease payments over the lease term. Since the implicit rate for the Companys leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. | F-19 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. Derivative financial instruments Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial new investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company based on the terms of the warrant agreement to determine the warrants as equity instruments or derivative liabilities. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are classified as equity instruments, the contracts are initially measured at fair value and no subsequent measurement is required for equity instruments. The Company uses Black-Scholes Model to calculate the fair value of the warrant. Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (ASUs). Management periodically reviews new accounting standards that are issued. | F-20 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)** In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU 2023-09 requires companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements. In March 2024, the FASB issued ASU 2024-01 Compensation Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU clarify how an entity determines whether a profits interest or similar award is within the scope of Accounting Standards Codification (ASC) 718, Compensation Stock Compensation, by adding illustrative guidance. The guidance in ASU 2024-01 is effective for annual reporting periods beginning after December 15, 2024, and can be applied either retrospectively to all prior periods presented in the consolidated financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. Early adoption is permitted. The adoption of ASU 2024-01 is not expected to have any impact on the Companys consolidated financial statements. In March 2024, the FASB issued ASU 2024-02 Codification Improvements Amendments to Remove References to the Concepts Statements. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The amendments in this update are effective for annual reporting periods beginning after December 15, 2024 and are not expected to have a significant impact on our financial statements. In November 2024, the FASB issued ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disclosures of additional information of the nature of expenses included in the income statement as well as disclosures about specific expense categories in the notes to the financial statements. The requirements of the ASU are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, which early adoption permitted. This Update can be applied either retrospectively to any or all prior periods presented in the consolidated financial statements or prospectively to financial statements issued for reporting period after the effective date of this Update. The Company is currently evaluating the effect of adopting this ASU. In November 2024, the FASB issued ASU 2024-04 Debt Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The clarification is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of adopting of this ASU. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows. Recently adopted Accounting Pronouncements In March 2023, the FASB issued ASU No. 2023-01 Leases (Topic 842) Common Control Arrangements. This ASU provides guidance in ASC Topic 842 that Leasehold improvements associated with common control leases should be (i) amortized by the lessee over the useful life of the leasehold improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset through a lease, and (ii) accounted for as a transfer between entities under common control through an adjustment to equity if and when the lessee no longer controls the use of the underlying asset. The ASU 2023-01 is effective for reporting periods beginning after December 15, 2023. The adoption of this accounting standard has no material impact on the consolidated financial statements. In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. The adoption of this accounting standard has no material impact on the consolidated financial statements. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows. **3. ACQUISITION OF OIE ATPC HOLDINGS (M) SDN. BHD.** On January 3, 2024, the Company together with Oriental Industries Enterprise (M) Sdn. Bhd. (OIE) formed an equity method investment entity, OIE ATPC Holdings (M) Sdn. Bhd. (OIE ATPC) in which the Company and OIE each owns 50% equity interest at the cost of $108. On March 14, 2024, the Company acquired the remainder 50% of equity at cost of $107 from OIE. On June 7, 2024, the entity changed its name to ATPC Green Energy Sdn Bhd (AGE). On January 8, 2024, ATPC Green Energy (AGE) formed a wholly own entity, OIE ATPC Exim (M) Sdn. Bhd. (ATPC Exim). As both AGE and ATPC Exim are newly formed, the Company considered the cost of investment is the fair value of the assets acquired. **4. VARIABLE INTEREST ENTITY (VIE)** SEA is a trading company incorporated on March 4, 2004, under the laws of Malaysia. SEA provided majority of ASLs purchases. Its equity at risk was insufficient to finance its activities and 100% of its business is transacted with ASL. Therefore, it was considered to be a VIE and ASL is the primary beneficiary since it has both of the following characteristics: | | a. | The power to direct the activities of the VIE that most significantly impact the VIEs economic performance; and | | | | b. | The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. | | Accordingly, the accounts of SEA is consolidated in the accompanying financial statements. | F-21 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **4. VARIABLE INTEREST ENTITY (VIE) (CONTD)** The carrying amount of the VIEs assets and liabilities were as follows: SCHEDULE OF VARIABLE INTEREST ENTITY | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Current assets: | | | | | | | | | | | Cash | | $ | 1,139 | | | $ | 122 | | | | Prepayment and deposits | | | 7 | | | | 7 | | | | Prepaid taxes | | | - | | | | 1,670 | | | | Total current assets | | $ | 1,146 | | | $ | 1,799 | | | | | | | | | | | | | | | Current liabilities: | | | | | | | | | | | Other payables and accrued liabilities | | | 1,478 | | | | 899 | | | | Total current liabilities | | $ | 1,478 | | | $ | 899 | | | | | | | | | | | | | | | Net (deficit) asset | | $ | (332 | ) | | $ | 900 | | | The summarized operating results of the VIEs are as follows: | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | | | | | | | | | | Operating revenues | | $ | - | | | $ | - | | | | Gross profit | | $ | - | | | $ | - | | | | (Loss) profit from operations | | $ | (1,231 | ) | | $ | 39,687 | | | | Net (loss) profit | | $ | (1,231 | ) | | $ | 39,687 | | | **5. CASH AND CASH EQUIVALENTS** As of December 31, 2024 and 2023 the Company had $2,040,243 and $4,832,460, respectively, of cash and cash equivalents, which consisted of $240,243 and $494,771, respectively, of cash in banks and $1,800,000 and $4,322,441, respectively, of time deposits placed with banks or other financial institutions and are all highly liquid investments with an original maturity of three months or less. The effective interest rate for the time deposits ranges between 1.74% to 2.55% per annum. As of December 31, 2024 and 2023, $1,806,401 and $4,630,476 of these balances were not covered by deposit insurance, respectively. | F-22 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **6. ACCOUNTS RECEIVABLE, NET** SCHEDULE OF ACCOUNTS RECEIVABLES | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Accounts receivable | | $ | 86,508 | | | $ | 56,000 | | | | Less: Allowance for credit losses | | | (32,857 | ) | | | (542 | ) | | | Total | | $ | 53,651 | | | $ | 55,458 | | | Movements of allowance for credit losses are as follows: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | Beginning balance | | $ | 542 | | | $ | - | | | | Addition | | | 31,614 | | | | 546 | | | | Exchange rate effect | | | 701 | | | | (4 | ) | | | Ending balance | | $ | 32,857 | | | $ | 542 | | | **7. INVENTORIES** Inventories consist of the following: SCHEDULE OF INVENTORIES | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Finished goods | | $ | 45,355 | | | $ | 47,907 | | | | Raw material | | | 992 | | | | - | | | | Total inventories | | | 46,347 | | | | 47,907 | | | For the years ended December 31, 2024 and 2023, the Company recognized $7,081 and $0 inventory write-down; and $0 and $10,899 inventory write-off, respectively. **8. PREPAYMENTS AND DEPOSITS** SCHEDULE OF PREPAID EXPENSES AND DEPOSITS | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Prepaid expenses | | $ | 522,460 | | | $ | 123,809 | | | | Deposits to suppliers | | | 131,480 | | | | 91,997 | | | | Subtotal | | | 653,940 | | | | 215,806 | | | | Less: Allowance for credit losses | | | (67,768 | ) | | | - | | | | Total | | $ | 586,172 | | | $ | 215,806 | | | Movements of allowance for credit losses are as follows: SCHEDULE OF CHANGES IN ALLOWANCE FOR DOUBTFUL ACCOUNTS | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | Beginning balance | | $ | - | | | $ | - | | | | Addition | | | 67,091 | | | | - | | | | Exchange rate effect | | | 677 | | | | - | | | | Ending balance | | $ | 67,768 | | | $ | - | | | | F-23 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **9. PROPERTY AND EQUIPMENT, NET** Property and equipment, net consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Computer and office equipment | | $ | 91,480 | | | $ | 91,947 | | | | Furniture & fixtures | | | 115,635 | | | | 111,164 | | | | Motor vehicle | | | 21,043 | | | | 89,729 | | | | Leasehold improvements | | | 189,411 | | | | 184,155 | | | | Subtotal | | | 417,569 | | | | 476,995 | | | | Property plant and equipment, gross | | | 417,569 | | | | 476,995 | | | | Less: accumulated depreciation | | | (386,106 | ) | | | (399,137 | ) | | | Total | | $ | 31,463 | | | $ | 77,858 | | | | Property plant and equipment, net | | $ | 31,463 | | | $ | 77,858 | | | Depreciation expense for the years ended December 31, 2024 and 2023 amounted to $52,570 and $70,337, respectively. **10. INTANGIBLE ASSETS, NET** Intangible assets, net, consist of the following: SCHEDULE OF INTANGIBLE ASSETS, NET | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Computer software | | $ | 54,611 | | | $ | 53,095 | | | | Less: accumulated amortization | | | (41,529 | ) | | | (35,637 | ) | | | Total | | $ | 13,082 | | | $ | 17,458 | | | Amortization expense for the years ended December 31, 2024 and 2023 amounted to $4,770 and $5,645, respectively. **11. INVESTMENT IN MARKETABLE SECURITIES** | | (i) | On May 17, 2018, the Company purchased 83,333 shares of common stock in Greenpro Capital Corp. for $500,000 at a purchase price of $6 per share. | | | | | | | | | (ii) | On July 30, 2018, the Company disposed 20 shares of common stock in Greenpro Capital Corp. for $125 at a purchase price of $6.2613 per share. | | | | | | | | | (iii) | On October 16, 2018, the Company purchased 33,333 shares of common stock in Greenpro Capital Corp. for $1,000 at a purchase price of $0.03 per share. | | | | | | | | | (iv) | On July 19, 2022, Greenpro Capital Corp. filed a certificate of change with the Secretary of State of Nevada to effect a reverse split of the companys common stock at the ratio of 10-for-1 effective July 28, 2022. Under the reverse stock split, each 10 pre-split share of common stock outstanding will automatically combine into 1 new share of common stock of the company. As at July 28, 2022, the Company has an investment of 116,646 common stock of Greenpro Capital Corp. The Companys investment of 116,646 common stock of Greenpro Capital Corp. was reduced to 11,665 subsequent to the reverse stock split. | | | | | | | | | (v) | On November 3, 2020, the Company received dividend of 6,667 shares of common stock in DSwiss, Inc. for $76,671 at fair value of $11.50 per share from Greenpro Capital Corporation as result of its Spin-off of DSwiss, Inc.s shares. | | | | | | | | | (vi) | On December 9, 2020, the Company received dividend of 16,663 shares of common stock in DSwiss, Inc. for $83,315 at fair value of $5 per share from Greenpro Capital Corporation as result of its Spin-off of DSwiss, Inc.s shares. | | | | | | | | | (vii) | On September 27, 2021, the Company received dividend of 11,665 shares of common stock in SEATech Ventures Corp. for $18,874 at fair value of $1.62 per share from Greenpro Capital Corp as a dividend income since Greenpro Capital Corp previously owned these shares. | | | F-24 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **11. INVESTMENT IN MARKETABLE SECURITIES (CONTD)** **** SCHEDULE OF INVESTMENT IN MARKETABLE SECURITIES | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Fair value of investment in marketable securities at the beginning of year | | $ | 20,171 | | | $ | 16,687 | | | | Transfer to non-marketable security | | | (1,500 | ) | | | - | | | | Unrealized holding (loss) gain | | | (5,018 | ) | | | 3,493 | | | | Exchange rate effect | | | 84 | | | | (9 | ) | | | Fair value of investment in marketable securities at the end of year | | $ | 13,737 | | | $ | 20,171 | | | **12. INVESTMENT IN NON-MARKETABLE SECURITIES** | (i) | On April 3, 2019, the Company purchased a 5% of stock or 15,000,000 shares of common stock in Phoenix Plus Corp. (a non-marketable security) for $1,500 at purchase price of $0.0001 per share. Phoenix Plus Corp. obtained approval for Depository Trust Company eligibility on April 26, 2022. Since the commencement of trading of common stock of Phoenix Plus Corp. on May 18, 2022, to July 16, 2024 there were only 12 days traded with number of shares of common stock ranging from 100 to 57,500. The Company deems there is an absence of a readily determinable fair value of the common stock of Phoenix Plus Corp. and has continued to value its investment in Phoenix Plus Corp. at cost. | | | | | | | (ii) | On July 2, 2024, the Company purchased 5% of stock or 15,000,000 shares of common stock with a par value of $0.0001 per share of Radiance Holdings Corp. at the consideration of the 15,000,000 shares of Phoenix Plus Corp held by the Company. | | SCHEDULE OF INVESTMENT IN NON MARKETABLE SECURITIES | | | | | | | | | | | | As of December 31, | | | | Radiance Holdings Corp. | | 2024 | | | 2023 | | | | Cost of investment | | $ | - | | | $ | - | | | | Add: Transfer from investment in marketable securities | | | 1,500 | | | | - | | | | Investment in non-marketable securities | | | 1,500 | | | | - | | | **13. CUSTOMER DEPOSITS** **** SCHEDULE OF CUSTOMER DEPOSITS | | | | | | | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Customer deposits Non Refundable | | $ | 94,015 | | | $ | 100,540 | | | | Unexpired product coupons | | | 2,961 | | | | 1,035 | | | | Total | | $ | 96,976 | | | $ | 101,575 | | | Customer deposits represent amounts advanced by customers on product orders and unexpired product coupons issued to the Companys members and distributors of its network marketing business. **14. OTHER PAYABLES AND ACCRUED LIABILITIES** **** SCHEDULE OF OTHER PAYABLES AND ACCRUED LIABILITIES | | | | | | | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Professional fees | | $ | 363,762 | | | $ | 348,664 | | | | Promotion expenses | | | 32,171 | | | | 47,995 | | | | Payroll | | | 4,685 | | | | 26,104 | | | | Amounts held in eWallets | | | 173,995 | | | | 185,137 | | | | Tax penalty | | | 75,000 | | | | 75,000 | | | | Others | | | 62,823 | | | | 43,161 | | | | Total | | $ | 712,436 | | | $ | 726,061 | | | The Company requires all members and distributors of its network marketing business to maintain an electronic wallet (eWallet) account with the Company. The eWallet is primarily for the crediting of any commission payment that falls below RM100 (or $22.20) and for members or distributors without bank account. Commission payment exceeding the RM100 threshold shall only be credited into the members or distributors bank upon request. The eWallet functionality allows the members to place new product orders utilizing eWallet available balance and/or request commission payout via multiple payment methods provided that each of the withdrawal amount exceeds RM100. Amounts held in eWallets are reflected on the balance sheet as a current liability. | F-25 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **15. RELATED PARTY BALANCES AND TRANSACTIONS** Related party balances **Amount due from related parties** SCHEDULE OF RELATED PARTIES | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | Prepayment of IT expenses | | $ | 1,582 | | | $ | 2,922 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Deposits for products purchases | | | - | | | | 8,171 | | | | ATPC Lega Global Sdn Bhd (Lega) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of Lega | | General expenses payment on behalf | | | 730 | | | | - | | | | Total | | | | | | $ | 2,312 | | | $ | 11,093 | | | **Accounts payable related parties** | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for the provision of complementary health therapies | | $ | 30,554 | | | $ | 30,439 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of beauty products | | | 71 | | | | 54 | | | | Chew Yi Zheng | | Mr. Chew Yi Zheng is the member of the immediate family of Mr. Yap Foo Ching (Steve Yap), the director of DSY Wellness International Sdn Bhd | | Render therapy and health consultation to customer | | | - | | | | 4,355 | | | | Total | | | | | | $ | 30,625 | | | $ | 34,848 | | | | F-26 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **15. RELATED PARTY BALANCES AND TRANSACTIONS (CONTD)** Related party balances **Other payable - related parties** | | | | | | | As of December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchase of products for general use | | $ | 494 | | | $ | 570 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchase of products for general use | | | - | | | | 535 | | | | Mr. Yap Foo Ching (Steve Yap) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Payment on behalf of company expenses | | | - | | | | 6,534 | | | | Mr. How Kok Choong | | Mr. How Kok Choong, the CEO and director of the Company | | Commission expense | | | 356 | | | | 207 | | | | Total | | | | | | $ | 850 | | | $ | 7,846 | | | Related party transactions **Purchases** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for the provision of complementary health therapies | | $ | 335,493 | | | $ | 272,993 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of beauty products | | | 17,600 | | | | 18,516 | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Purchases of products for the provision of complementary health therapies | | | 6,576 | | | | - | | | | Chew Yi Zheng | | Mr. Chew Yi Zheng is the member of the immediate family of Mr. Yap Foo Ching (Steve Yap), the director of DSY Wellness International Sdn Bhd | | Render therapy and health consultation to customer | | | - | | | | 4,355 | | | | Total | | | | | | $ | 359,669 | | | $ | 295,864 | | | | F-27 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **15. RELATED PARTY BALANCES AND TRANSACTIONS (CONTD)** Related party transactions **Other income** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | Ando Design Sdn Bhd (Ando) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Ando. | | Rental income | | $ | 2,630 | | | $ | 2,630 | | | | Redboy Pictures Sdn Bhd (Redboy) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Redboy. | | Rental income | | | - | | | | 5,260 | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | Rental income | | | 789 | | | | 460 | | | | Total | | | | | | $ | 3,419 | | | $ | 8,350 | | | **Other purchases** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | CTA Nutriceuticals (Asia) Sdn Bhd (CTA) | | The directors and shareholders of CTA are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY International Wellness Sdn Bhd | | Purchases of products for general use | | $ | 4,243 | | | $ | 6,213 | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of products for general use | | | 4,337 | | | | 7,282 | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Purchases of products for general use | | | - | | | | 368 | | | | Total | | | | | | $ | 8,580 | | | $ | 13,863 | | | | F-28 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **15. RELATED PARTY BALANCES AND TRANSACTIONS (CONTD)** Related party transactions **Commission expense** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | Mr. How Kok Choong | | Mr. How Kok Choong, the CEO and director of the Company | | Commission expense | | $ | 3,012 | | | $ | 5,947 | | | | Total | | | | | | $ | 3,012 | | | $ | 5,947 | | | **Other expenses** | | | | | | | For the years ended December 31, | | | | Name of Related Party | | Relationship | | Nature | | 2024 | | | 2023 | | | | | | | | | | | | | | | | | TH3 Holdings Sdn Bhd (TH3) | | Mr. How Kok Choong, the CEO and director of the Company is also a director of TH3 | | IT support services fee | | $ | 59,371 | | | $ | 54,956 | | | | Ando Design Sdn Bhd (Ando) | | Mr. How Kok Choong, the CEO and director of the Company is also the director of Ando. | | Office furniture & fixture and improvements | | | 1,772 | | | | - | | | | SY Welltech Sdn Bhd (Welltech) (formerly known as DSY Beauty Sdn Bhd) | | The directors and shareholders of Welltech are related parties to Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd | | Purchases of products for general use | | | 5 | | | | - | | | | DSY Wellness & Longevity Center Sdn Bhd (DSYWLC) | | Mr. Yap Foo Ching (Steve Yap), a director of DSY Wellness International Sdn Bhd is also a director of DSYWLC. | | Office rental expenses | | | 55,239 | | | | 31,563 | | | | Total | | | | | | $ | 116,388 | | | $ | 86,519 | | | | F-29 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **16. STOCKHOLDERS EQUITY** *Preferred stock* As of December 31, 2024 and 2023, there were 200,000,000 preferred stocks authorized but none were issued and outstanding. *Common stock* Pursuant to a resolution passed at the Board Meeting on August 15, 2024, the number of authorized shares of the Company decreased from 1,000,000,000 shares of Common Stock at $0.0001 par value to 50,000,000 shares of Common Stock at $0.0001 par value. As of December 31, 2024 and 2023, there were 50,000,000 common stocks authorized, 3,989,056 and 3,855,101 shares issued and outstanding, respectively. Pursuant to a resolution passed at the Board Meeting on August 15, 2024, the Company declared a 1-for-20 reverse stock split of the Companys issued and outstanding common stock, par value $0.0001 per share. Effective as of August 30, 2024, every 20 issued and outstanding shares of the Companys Common Stock were automatically converted into one outstanding share of Common Stock. As a result of the Reverse Stock Split, the number of the outstanding shares of Common Stock decreased from 77,069,575 (pre-split) shares to 3,853,504 (post-split) shares. ** *Share-based compensation* The Company has share-based compensation to the executive director. The share-based compensation expense is recorded in general and administrative expenses. The value of the share is $5,000 a month and the number of shares to issue is based on the average market price of the month. The Company will issue the share on half yearly basis. As of December 31, 2024 and 2023, there were 5,143 and 0 shares issued respectively. *Treasury Stock* On November 22, 2023, the Company announced that the Board of Directors has authorized a share repurchase plan under which the Company may repurchase up to $1 million of its common shares over the next 6 months depending on the market conditions. On December 20, 2023 and December 21, 2023, the Company repurchased 2,015 and 4,750 of common stock for $25,690 and $68,429 in the open market. The Company will review the shares repurchase plan periodically and may authorize adjustment of its terms and size whenever it is required. On January 26, 2024, the Company redeemed 6,765 treasury stock at par value $0.0001. As of December 31, 2024 and 2023, there were 0 and 6,765 treasury stock respectively. Warrants On October 10, 2023, the Company entered into an underwriting agreement with Network 1 Financial Securities, Inc., as underwriter named thereof, in connection with its initial public offering (IPO) of 82,500 shares of common stock, par value $0.0001 per share (the Shares) at a price of $80.00 per share. The Company issued Representatives Warrants to purchase up to 5,775 shares of common stock at $88.00 per share, dated October 13, 2023, to Network 1 Financial Securities, Inc. The warrants shall be exercisable at any time, and from time to time, in whole or in part, 180 days after October 13, 2023 (i.e. the date of issuance) and expiring on October 10, 2028. The warrants are classified as equity instruments, the contracts are initially measured at fair value and no subsequent measurement is needed for equity instruments. The Company uses Black-Scholes Model to calculate the fair value of the warrant. As of October 13, 2023 (the Grant Date) the warrant was valued at $38,580 with the following assumptions. SCHEDULE OF SHARE-BASED COMPENSATION ARRANGEMENTS BY SHARE-BASED PAYMENT AWARD | | | As of October 13, | | | | | | 2023 | | | | Risk-free interest rate | | | 4.65 | % | | | Expected volatility | | | 49 | % | | | Expected life (in years) | | | 5 years | | | | Expected dividend yield | | | 0.00 | % | | | Fair value of warrants | | $ | 38,580 | | | **17. NON-CONTROLLING INTEREST** The Companys non-controlling interest consists of the following: SCHEDULE OF NON CONTROLLING INTEREST | | | | | | | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | DSY Wellness: | | | | | | | | | | | Paid-in capital | | $ | 97 | | | $ | 97 | | | | Retained (loss) earnings | | | (3,136 | ) | | | 12,434 | | | | Accumulated other comprehensive (expense) | | | (754 | ) | | | (752 | ) | | | Noncontrolling interest gross | | | (3,793 | ) | | | 11,779 | | | | ASL | | | - | | | | - | | | | Total | | $ | (3,793 | ) | | $ | 11,779 | | | | F-30 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **18. INCOME TAXES** The United States and foreign components of loss before income taxes were comprised of the following: SCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | Tax jurisdictions from: | | | | | | | | | | | Local United States | | $ | (1,706,035 | ) | | $ | (735,503 | ) | | | Foreign Malaysia | | | (762,788 | ) | | | (1,315,491 | ) | | | Foreign China | | | (3,144 | ) | | | - | | | | Foreign Hong Kong | | | (9,143 | ) | | | (55,366 | ) | | | Foreign Tax Jurisdictions | | | (9,143 | ) | | | (55,366 | ) | | | Loss before income tax | | $ | (2,481,110 | ) | | $ | (2,106,360 | ) | | Income tax expense consisted of the following: SCHEDULE OF INCOME TAX EXPENSE | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | Current: | | | | | | | | | | | - Local | | $ | - | | | $ | - | | | | - Foreign | | | (4,934 | ) | | | (3,795 | ) | | | | | | | | | | | | | | Deferred: | | | | | | | | | | | - Local | | | - | | | | - | | | | - Foreign | | | - | | | | 220 | | | | | | | | | | | | | | | Income tax credit (expense) | | $ | (4,934 | ) | | $ | (3,575 | ) | | The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company and its subsidiary that operate in various countries: United States, Malaysia (including Labuan), China and Hong Kong that are subject to taxes in the jurisdictions in which they operate, are as follows: *United States of America* Agape ATP Corporation was incorporated in the State of Nevada and is subject to the tax laws of the United States of America with a corporate tax rate of 21% on its taxable income. Agape ATP Corporation also subject to controlled foreign corporations Subpart F income (Subpart F) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 21%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (GILTI) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended December 31, 2024 and 2023, the Companys foreign subsidiaries did not generate any income that were subject to Subpart F tax and GILTI tax. | F-31 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **18. INCOME TAXES (CONTD)** As of December 31, 2024 and 2023, the operations in the United States of America incurred approximately $3,799,000 and $2,093,000, respectively, of cumulative net operating losses (NOL) which can be carried forward to offset future taxable income or Subpart F and GILTI taxes. These balances can be carried forward indefinitely. The deferred tax valuation allowance related to U.S. net operating losses as of December 31, 2024 and 2023 were approximately $798,000 and $440,000, respectively. As of December 31, 2024, the tax year from 2021 to 2024 remain open for examination in the United States of America. *Malaysia* Changes to the Labuan Business Activity Tax Act (LBATA) 1990 which was gazetted and came into operation on January 1, 2019 mandate companies incorporated in Labuan to satisfy the substantial activity requirements to qualify for the preferential tax rate of 3% on net audited profit. Subsequently, on April 29, 2020, a circular setting out revisions to the substantial activity requirements was issued. As Agape ATP Corporation did not maintain a permanent establishment in Labuan, and therefore did not satisfy the said requirements, the company was subjected to tax at 24% on its net audited profit. On June 11, 2021, Agape ATP Corporation made an irrevocable election to be taxed under the Malaysian Income Tax Act 1967 as the elected tax regime is more tax efficient to the entity compare to LBATA. Agape Superior Living Sdn Bhd, Agape S.E.A Sdn Bhd, Cedar ATPC Sdn Bhd, DSY Wellness International Sdn Bhd, ATPC Green Energy Sdn Bhd, OIE ATPC Exim (M) Sdn Bhd are governed by the income taxes laws of Malaysia and the income taxes provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, the tax rate of companies with more than 20% of its paid-up share capital being owned directly or indirectly by a foreign company is 24% for the years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the operations in the Malaysia incurred approximately $3,369,000 and $2,796,000, respectively, of cumulative net operating losses (NOL) which can be carried forward to offset future taxable income. Approximately $753,000, $842,000, $1,225,000 and $549,000 of the net operating loss carry forwards will expire in 2031, 2032, 2033 and 2034, respectively, if unutilized. The deferred tax valuation allowance related to Malaysia deferred tax assets as of December 31, 2024 and 2023 were approximately $827,000 and $670,000, respectively. As of December 31, 2024, the tax year from 2019 to 2024 remain open for examination in Malaysia. In cases of fraud, wilful default or negligence, there is no limitation to the examination period. *Hong Kong* Agape ATP International Holding (HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income derived from Hong Kong. Business income derived or business expenses incurred outside the Special Administrative Region is not subject to Hong Kong Profits Tax or deduction. *China* ATPC Technology Private Limited is subject to the Corporate Income Tax governed by the Income Tax Law of the Peoples Republic of China with a unified statutory income tax rate of 25%. | F-32 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **18. INCOME TAXES (CONTD)** The following table reconciles the Malaysia statutory rates to the Companys effective tax rate for the periods indicated below: SCHEDULE OF EFFECTIVE INCOME TAX RATE | | | 2024 | | | 2023 | | | | | | For the years ended December 31, | | | | | | 2024 | | | 2023 | | | | Malaysia statutory tax rate* | | | 24.00 | % | | | 24.00 | % | | | Valuation allowance | | | (19.12 | )% | | | (20.23 | )% | | | Differential of local statutory tax rate | | | (2.08 | )% | | | (1.55 | )% | | | Permanent difference | | | (3.00 | )%(1) | | | (2.39 | )%(1) | | | Effective tax rate | | | (0.20 | )% | | | (0.17 | )% | | | * | As the Company business operation mainly concentrated in Malaysia, the Company determined to apply Malaysia statutory tax rate in reconciliation of the statutory tax rate to the effective tax rate. | | | (1) | The amount comprised: | | | | | | | Expenses incurred in AATP LB, ASL, SEA, CEDAR, AGE, EXIM that are not deductible in the Malaysia tax return. | | | (1) | The amount comprised: Expenses incurred in AATP LB, ASL, SEA, CEDAR, AGE, EXIM that are not deductible in the Malaysia tax return. | | The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of: SCHEDULE OF DEFERRED TAX ASSETS | | | 2024 | | | 2023 | | | | | | As of December 31, | | | | | | 2024 | | | 2023 | | | | Deferred tax assets: | | | | | | | | | | | Net operating loss carry forwards in U.S. | | $ | 797,759 | | | $ | 439,492 | | | | Net operating loss carry forwards in Malaysia | | | 824,143 | | | | 664,105 | | | | Unabsorbed capital allowance carry forward in Malaysia | | | 3,245 | | | | 5,577 | | | | Less: valuation allowance | | | (1,625,147 | ) | | | (1,108,955 | ) | | | Deferred tax assets, net | | $ | - | | | $ | 219 | | | Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and 2023, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the years ended December 31, 2024 and 2023. | F-33 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **19. CONCENTRATIONS OF RISKS** (a) Major customers For the years ended December 31, 2024 and 2023, no customer accounted for 10.0% or more of the Companys total revenues. As of December 31, 2024, one company accounted for approximately 79.7% of the Companys balance of accounts receivable and six individual customers and one company accounted for approximately 40.2% as of December 31, 2023. (b) Major vendors For the year ended December 31, 2024, two vendors accounted for approximately 59.8% and 17.5% of the Companys total purchases. For the year ended December 31, 2023, two vendors accounted for approximately 54.8% and 26.0% of the Companys total purchases. As of December 31, 2024, three vendors accounted for approximately 44.3%, 31.8% and 22.9% of the Companys total balance of accounts payable, respectively. CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 22.9% of the Companys total balance of accounts payable. As of December 31, 2023, two vendors accounted for approximately 61.8% and 35.4% of the Companys total balance of accounts payable, respectively. CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 35.4% of the Companys total balance of accounts payable. (c) Commission Expenses to Sales Distributors and Stockists For the year ended December 2024, one sales distributor accounted for approximately 21.2% of the Companys total commission expense. For the year ended December 2023, one sales distributor accounted for approximately 15.1% of the Companys total commission expense. (d) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of December 31, 2024 and 2023, $2,030,048 and $4,817,213 were deposited with financial institutions, respectively, $1,806,401 and $4,630,476 of these balances are not covered by deposit insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its account receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for credit losses based upon factors surrounding the credit risk of specific customers, historical trends and other information. (e) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of RM and HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. | F-34 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **20. LEASE** Lease commitments The Company adopted ASC 842 for ASLs office space lease and sales and training center as the lease commencement date upon the acquisition of ASL. The Companys lease commitments are as follows: On June 1, 2023, upon the expiry of the two-years lease for its office space, the Company entered into a new three-years lease with the same landlord who had earlier leased the same office space to the Company since April 1, 2020. The Company recognized lease liabilities of approximately $283,220, with a corresponding right-of-use (ROU) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Companys estimated incremental borrowing rate. On September 1, 2023, upon the expiry of the two-years lease for its office space and sales training center, the Company entered into a new three-years lease with the same landlord who had earlier leased the same office space and sales training center to the Company since April 1, 2020. The Company recognized lease liabilities of approximately $126,093 with a corresponding right-of-use (ROU) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Companys estimated incremental borrowing rate. On October 1, 2023, upon the expiry of the two-years lease for an apartment to serve as staff accommodation, the Company entered into a new two-years lease with the same landlord who had earlier leased the same apartment to the Company since October 1, 2021. The Company recognized lease liabilities of approximately $8,940 with a corresponding right-of-use (ROU) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Companys estimated incremental borrowing rate. On December 18, 2023, the Company leased non-commercial vehicle as lessee under finance leases with 5 years lease terms. The Company recognized finance lease liabilities of approximately $78,824, using an effective interest rate of 8.63%, which was determined using the incremental borrowing rate. On July 11, 2024, the Company leased non-commercial vehicle as lessee under finance leases with 5 years lease terms. The Company recognized finance lease liabilities of approximately $72,772, using an effective interest rate of 4.42%, which was determined using the incremental borrowing rate. SCHEDULE OF LEASE COST | Components of leases | | As of December 31, 2024 | | | As of December 31, 2023 | | | | | | | | | | | | | Operating lease cost | | | 155,828 | | | | 157,370 | | | | | | | | | | | | | | | Amortization of finance lease asset | | $ | 29,445 | | | | 13,094 | | | | Interest on finance lease liabilities | | | 7,267 | | | | 275 | | | | | | | | | | | | | | | Weighted average remaining lease term (years) | | | | | | | | | | | Operating lease | | | 1.49 | | | | 2.48 | | | | Finance lease | | | 4.34 | | | | 5.00 | | | | | | | | | | | | | | | Weighted average discount rate | | | | | | | | | | | Operating lease | | | 5.5 | % | | | 5.5 | % | | | Finance lease | | | 6.7 | % | | | 8.6 | % | | The five-year maturity of the Companys operating and finance lease liabilities is as follow: SCHEDULE OF LEASE COMMITMENTS | Twelve Months Ending December 31, 2024 | | Operating lease liabilities | | | Finance lease liabilities | | | | | | | | | | | | | 2025 | | $ | 158,800 | | | $ | 29,950 | | | | 2026 | | | 76,652 | | | | 29,950 | | | | 2027 | | | - | | | | 29,950 | | | | 2028 | | | - | | | | 29,950 | | | | Thereafter | | | - | | | | 42,623 | | | | Total lease payments | | | 235,452 | | | | 162,422 | | | | Less: interest | | | (9,657 | ) | | | (25,436 | ) | | | Present value of lease liabilities | | $ | 225,795 | | | $ | 136,985 | | | The Company also leased one office and operation center, and one shophouses with an expiring term of twelve months or less, which were classified as operation leases. Since the lease terms for these leases were twelve months or less, a lessee is permitted to elect not to recognize lease assets and liabilities. The Company has elected not to recognize lease assets and liabilities on these leases. As of December 31, 2024, the Companys commitment for minimum lease payment under these operating leases within the next twelve months were $45,979. Short term lease cost for the years ended December 31, 2024 and 2023 were $65,608 and $39,825 respectively. | F-35 | | | | | **AGAPE ATP CORPORATION** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **(Currency expressed in United States Dollars (US$), except for number of shares)** **21. COMMITMENTS AND CONTINGENCIES** The Company has no material commitments or contingencies that are required to be disclosed. The Company has evaluated its obligations and contingencies and determined that no material commitments or contingencies exist at this time. The Company will continue to monitor and evaluate any potential future commitments or contingencies and will disclose any material items as required. **Legal** The Company is not involved in any material legal proceedings and there are no legal matters that are required to be disclosed. **22. SEGMENT REPORTING** ASC 280 Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Groups internal organizational management structure as well as information about geographical areas, business segments, and major customers in the financial statements. Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance. Skin care, health and wellness segment includes the provision of health and wellness products and health solution advisory services. Green energy segment includes providing renewable energy products, technical solutions, installations and maintenance services. Operating results by segment include costs or expenses that are directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between the two segments. The table below presents details of our reporting segments: SCHEDULE OF REPORTING SEGMENTS | | | Skin care, Health and Wellness | | | Green Energy | | | Others | | | Total | | | | Year ended December 31, 2024 | | | | | | | | | | | | | | | Revenue | | | 1,279,984 | | | | 42,763 | | | | - | | | | 1,322,747 | | | | Operating loss | | | (757,064 | ) | | | (4,435 | ) | | | (1,724,545 | ) | | | (2,486,044 | ) | | | Total assets | | | 807,394 | | | | 95,487 | | | | 2,337,138 | | | | 3,240,020 | | | | | | Skin care, Health and Wellness | | | Green Energy | | | Others | | | Total | | | | Year ended December 31, 2023 | | | | | | | | | | | | | | | Revenue | | | 1,431,088 | | | | - | | | | - | | | | 1,431,088 | | | | Operating loss | | | (1,368,047 | ) | | | - | | | | (741,888 | ) | | | (2,109,935 | ) | | | Total assets | | | 937,167 | | | | - | | | | 4,807,327 | | | | 5,744,494 | | | The others category comprises corporate headquarter operations and one minor business components. None of these components individually meet any of the quantitative thresholds for determining reportable segments. **23. SUBSEQUENT EVENTS** On February 5, 2025, the Company issued 16,325 shares of common stock to executive director, Wilfrendo Fernando Cortizo for shares compensation for the period of July to December 2024. On February 5, 2025, the Company obtained approval from stockholders in a special meeting to increase number of authorized common stock from 50,000,000 to 500,000,000 and to issue 46,000,000 shares of common stock at $0.0001 per share. On February 28, 2025, the Company signed shares subscription agreement with 18 subscribers to issue 46,000,000 shares of common stock at the price of $0.50 per share. On March 3, 2025, the Company engaged an adviser for business management consultation, tax planning and compliance, financial planning and risk management, investment and financing consultation with fee CNY 3,780,000. On March 11, 2025, the Company made an investment of CNY 166,752,302 in (Bicheng Investment Management (Beijing) Co., Ltd.) to enhance its capital allocation efficiency and gain exposure to new investment opportunities in high-growth sectors. On March 24, 2025, the Company issued 46,000,000 shares of common stock to the 18 subscribers and $23,000,000 was raised. | F-36 | |