UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

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 Tower, Jalan Desa Bahagia,

Taman Desa, 58100 Kuala Lumpur, Malaysia.

(Address of principal executive offices, including zip code)

Registrant’s 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 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller reporting company ☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at May 10, 2024
Common Stock, $0.0001 par value		76,966,712

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
	Unaudited Condensed Consolidated Balance Sheets	F-1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	F-2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	F-3
	Unaudited Condensed Consolidated Statements of Cash Flows	F-4
	Notes to Unaudited Condensed Consolidated Financial Statements	F-5 - F-34
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	10
ITEM 4.	CONTROLS AND PROCEDURES	10
PART II	OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	13
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4	MINE SAFETY DISCLOSURES	13
ITEM 5	OTHER INFORMATION	13
ITEM 6	EXHIBITS	13
	SIGNATURES	14

PART I FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

AGAPE ATP CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	March 31, 2024			December 31, 2023
	As of
	March 31, 2024			December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Included $118 and $122 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of March 31, 2024 and December 31, 2023, respectively.)	$	3,580,526		$	4,832,460
Accounts receivable, net		37,660			55,458
Other receivable		424			435
Amount due from related parties		5,094			11,093
Amount due from related parties		5,094			11,093
Inventories		56,881			47,907
Prepaid taxes (Included $1,624 and $1,670 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of March 31, 2024 and December 31, 2023, respectively.)		24,195			21,993
Prepayments and deposits (Included $39 and $7 in the consolidated VIE that can be used only to settle obligations of the consolidated VIE as of March 31, 2024 and December 31, 2023, respectively.)		568,043			215,806
Total Current Assets		4,272,823			5,185,152

NON-CURRENT ASSETS
Property and equipment, net		63,080			77,858
Intangible assets, net		15,799			17,458
Finance lease assets		79,698			86,335
Operating right-of-use assets		314,390			357,301
Investment in marketable securities		21,306			20,171
Deferred tax assets		-			219
Total Non-Current Assets		494,273			559,342

TOTAL ASSETS	$	4,767,096		$	5,744,494

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	43,972		$	55,585
Accounts payable – related parties		14,131			34,848
Accounts payable		14,131			34,848
Customer deposits		98,263			101,575
Operating lease liabilities, current		137,134			138,548
Other payables and accrued liabilities ($1,128 and $899 are included in the consolidated VIE that are without recourse to the credit of Agape ATP Corporation as of March 31, 2024 and December 31, 2023, respectively.)		535,254			726,061
Other payable – related parties ($42 and $0 are included in the consolidated VIE that are without recourse to the credit of Agape ATP Corporation as of March 31, 2024 and December 31, 2023, respectively.)		837			7,846
Finance lease liabilities, current		8,055			7,075
Income tax payable		6,647			-
Total Current Liabilities		844,293			1,071,538

NON-CURRENT LIABILITIES
Operating lease liabilities, non-current	$	178,391		$	219,530
Finance lease liabilities, non-current		68,496			72,563
Total Non-current Liabilities		246,887			292,093

TOTAL LIABILITIES	$	1,091,180		$	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; 1,000,000,000 shares authorized, 76,966,712 and 77,102,012 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.		7,697			7,711
Additional paid in capital		11,378,743			11,378,743
Treasury Stock, par value $0.0001; 0 and 135,300 shares as of March 31, 2024 and December 31, 2023, respectively.		-			(14	)
Accumulated deficit		(7,757,278	)		(7,047,571	)
Accumulated other comprehensive income		28,664			30,215
TOTAL AGAPE ATP CORPORATION STOCKHOLDERS’ EQUITY		3,657,826			4,369,084

NON-CONTROLLING INTERESTS		18,090			11,779

TOTAL EQUITY		3,675,916			4,380,863

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,767,096		$	5,744,494

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-1

AGAPE ATP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	2024			2023
	For the three months ended March 31,
	2024			2023

REVENUE	$	318,643		$	380,767

COST OF REVENUE		(115,223	)		(128,359	)

GROSS PROFIT		203,420			252,408

SELLING		(50,348	)		(76,098	)
COMMISSION		(9,344	)		(33,942	)
GENERAL AND ADMINISTRATIVE		(867,266	)		(596,253	)
TOTAL OPERATING EXPENSES		(926,958	)		(706,293	)

LOSS FROM OPERATIONS		(723,538	)		(453,885	)

OTHER INCOME (EXPENSES)
Other income, net		4,142			8,366
Interest income		22,809			3,183
Unrealized holding gain on marketable securities		1,173			4,920
Exchange loss, net		(842	)		(876	)
TOTAL OTHER INCOME (EXPENSES), NET		27,282			15,593

LOSS BEFORE INCOME TAXES		(696,256	)		(438,292	)

INCOME TAX EXPENSE (CREDIT)		(6,838	)		4,217

NET LOSS		(703,094	)		(434,075	)

LESS: NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		6,613			(8,235	)

NET LOSS ATTRIBUTABLE TO AGAPE ATP CORPORATION	$	(709,707	)	$	(425,840	)

NET LOSS	$	(703,094	)	$	(434,075	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		(1,551	)		2,077

TOTAL COMPREHENSIVE LOSS		(704,645	)		(431,998	)

Less: Comprehensive (loss) income attributable to non-controlling interests		6,311			(8,219	)

COMPREHENSIVE LOSS ATTRIBUTABLE TO AGAPE ATP CORPORATION	$	(710,956	)	$	(423,779	)

LOSS PER SHARE
Basic and diluted	$	(0.01	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		76,966,712			75,452,012

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

AGAPE ATP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	Number of shares		Par value		Number of shares		Par value		PAID IN CAPITAL		ACCUMULATED DEFICIT			COMPREHENSIVE INCOME		CONTROLLING INTERESTS			STOCKHOLDERS’ EQUITY
	COMMON STOCK				TREASURY STOCK				ADDITIONAL					ACCUMULATED OTHER		NON-			TOTAL
	Number of shares		Par value		Number of shares		Par value		PAID IN CAPITAL		ACCUMULATED DEFICIT			COMPREHENSIVE INCOME		CONTROLLING INTERESTS			STOCKHOLDERS’ EQUITY

Balance as of December 31, 2022		75,452,012	$	7,545		-	$	-	$	6,470,716	$	(4,945,586	)	$	9,266	$	20,513		$	1,562,454
Net loss		-		-		-		-		-		(425,840	)		-		(8,235	)		(434,075	)
Foreign currency translation adjustment		-		-		-		-		-		-			2,077		17			2,094
Balance as of March 31, 2023		75,452,012	$	7,545		-		-	$	6,470,716

SEC Form 10-Q filed by Agape ATP Corporation