ATIF Holdings Ltd
For the period ended Apr 30, 2024. Filed Jun 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2024 · Filed Jun 14, 2024
AUC$6.56+5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-31; filed 2024-03-18.
0001213900-24-023396
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsCurrent report: 10-Q
Period ended 2024-04-30; filed 2024-06-14.
0001213900-24-052878
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 78 current paragraphs.
42 unchanged; 32 reworded; 4 added; 0 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Other income, net. Other income, net was primarily comprised of rental income from a sublease arrangement and realized gains from sales of trading securities. Compared with the other income, net for the three months ended April 30, 2023, the other income, net decreased by $168,783 for the three months ended April 30, 2024. The decrease was primarily because of a decrease of rental income of $40,468 because we terminated the sublease agreement in February 2024, and a decrease of realized gains of $128,299 from sales of trading securities.
Current report
***Other income, net.***Other income, net was primarily comprised of rental income from a sublease arrangement, realized gains from sales of trading securities, Employee Retention Credit (“ERC”) created by the CARES Act and waive of customer deposits payable, net off against loss from early termination of a lease arrangement. Compared with the other income, net for the nine months ended April 30, 2023, the other income, net decreased by $91,281 for the nine months ended April 30, 2024. The decrease was primarily attributable to a decrease of $27,577 in rental income as we terminated the sublease agreement in February 2024, a loss of $62,282 from early termination of a lease arrangement with a landlord, and a decrease of $128,299 in realized gains from sales of trading securities, partially net off by an increase of $70,000 due to waive of customer deposits and an increase of $51,896 in ERC.
Current report
Net cash provided by investing activities was $78,557 in the nine months ended April 30, 2023, primarily provided by release of investment in equity investees of $0.3 million, partially offset by loans of $0.1 million to a related party, and investment in trading securities of $0.1 million.
Current report
For the nine months ended April 30, 2024, the Company raised proceeds of approximately $2.3 million in a private placement by issuance of 1,905,522 ordinary shares.
Reworded paragraphs (32)
Previous wording
Currently we provide consulting services to the companies based in North America seeking listing in U.S.. We launched our consulting services in 2015. Our aim was to assist Chinese enterprises by filling the gaps and forming a bridge between PRC companies and overseas stock markets and exchanges. We have a team of qualified and experienced personnel with legal, regulatory, and language expertise in several jurisdictions outside the U.S. Our services were designed to help SMEs in China achieve their goal of becoming public companies. In May 2022, we shifted our geographic focus from China to North America emphasizing on helping mid and small companies in North America become public companies on the U.S. capital markets. We would create a going public strategy for each client based on many factors of such client, including our assessment of the client’s financial and operational situations, market conditions, and the client’s business and financing requirements. Since our inception and up to the date of this report, we have successfully helped three Chinese enterprises to be quoted on the U.S. OTC markets and are currently assisting our other clients in their respective going public efforts. Most of our current and past clients have been Chinese, U.S. and Mexican companies, and we plan to expand our operations to other Asian countries, such as Malaysia, Vietnam, and Singapore with continuing focus on the North American market in the coming years.
Current wording
Currently we provide consulting services to the companies based in North America and Asia seeking listing in U.S.. We launched our consulting services in 2015. Our aim was to assist Chinese enterprises by filling the gaps and forming a bridge between PRC companies and overseas stock markets and exchanges. We have a team of qualified and experienced personnel with legal, regulatory, and language expertise in several jurisdictions outside the U.S. Our services were designed to help SMEs in China achieve their goal of becoming public companies. In May 2022, we shifted our geographic focus from China to North America emphasizing on helping mid and small companies in North America become public companies on the U.S. capital markets. We would create a going public strategy for each client based on many factors of such client, including our assessment of the client’s financial and operational situations, market conditions, and the client’s business and financing requirements. Since our inception and up to the date of this report, we have successfully helped three Chinese enterprises to be quoted on the U.S. OTC markets and are currently assisting our other clients in their respective going public efforts. Most of our current and past clients have been Chinese, U.S. and Mexican companies, and we plan to expand our operations to other Asian countries, such as Malaysia, Vietnam, and Singapore with continuing focus on the North American market in the coming years.
Previous wording
For the six months ended January 31, 2024 and 2023, we provided consulting services to four and four customers, respectively, which primarily engaged the Company to provide consulting services relating to going public in the US through IPO, reverse merger and acquisition. We plan to focus on providing consulting services to customers based in North America and other areas and intend to continue cooperating with Huaya, which was one of our subsidiaries before May 2022, in connection with the expansion and provision of our business services in China.
Current wording
For the nine months ended April 30, 2024 and 2023, we provided consulting services to four and two customers, respectively, which primarily engaged the Company to provide consulting services relating to going public in the US through IPO, reverse merger and acquisition. We plan to focus on providing consulting services to customers based in North America and other areas and intend to continue cooperating with Huaya, which was one of our subsidiaries before May 2022, in connection with the expansion and provision of our business services in China.
Previous wording
Our total revenue generated from consulting services was $25,000 and approximately $1.9 million for the three months ended January 31, 2024 and 2023, respectively. Our total revenue generated from consulting services was approximately $0.2 million and $2.2 million for the six months ended January 31 2024 and 2022, respectively.
Current wording
Our total revenue generated from consulting services was approximately $0.2 million and $0.1 million for the three months ended April 30, 2024 and 2023, respectively. Our total revenue generated from consulting services was approximately $0.4 million and $2.3 million for the nine months ended April 30, 2024 and 2023, respectively.
Previous wording
Our customer acquisition channels primarily include our sales and marketing campaigns and existing customer referrals. In order to acquire customers, we have made significant efforts in building mutually beneficial long-term relationships with local government, academic institutions, and local business associations. If any of our current customer acquisition channels becomes less effective, we are unable to continue to use any of these channels or we are not successful in using new channels, we may not be able to attract new customers in a cost-effective manner or convert potential customers into active customers or even lose our existing customers to our competitors. To the extent that our current customer acquisition and retention efforts become less effective, our service revenue may be significantly impacted, which would have a significant adverse effect on our revenues, financial condition, and results of operations.
Current wording
Our customer acquisition channels primarily include our sales and marketing campaigns and existing customer referrals. In order to acquire customers, we have made significant efforts in building mutually beneficial long-term relationships with, academic institutions, and local business associations. If any of our current customer acquisition channels becomes less effective, we are unable to continue to use any of these channels or we are not successful in using new channels, we may not be able to attract new customers in a cost-effective manner or convert potential customers into active customers or even lose our existing customers to our competitors. To the extent that our current customer acquisition and retention efforts become less effective, our service revenue may be significantly impacted, which would have a significant adverse effect on our revenues, financial condition, and results of operations.
Previous wording
***Revenues.***Our total revenue decreased by approximately $2.0 million from approximately $2.2 million for the six months ended January 31, 2023, to approximately $0.2 million in six months ended January 31, 2024.
Current wording
***Revenues.***Our total revenue increased by approximately $0.1 million from approximately $0.1 million for the three months ended April 30, 2023, to approximately $0.2 million in three months ended April 30, 2024.
Previous wording
During the three months ended January 31, 2024, the Company provided listing related consulting services for one customer and earned consulting service fees of $25,000. During the three months ended January 31, 2023, we completed both phase I and phase II services for three customers and earned consulting service fees of $1.9 million.
Current wording
During the three months ended April 30, 2024, we completed phase III services for one customer and earned consulting service fees of $0.2 million. During the three months ended April 30, 2023, we provided phase II services for one customer and earned consulting service fees of $0.1 million.
Previous wording
***Selling expenses.***Our selling expenses primarily consisted of advertising and promotion expenses. For the three months ended January 31, 2024, our selling expenses was $93,000, representing an increase of $45,000, or 94%, from $48,000 for the three months ended January 31, 2023. The increase was primarily due to an increase of amortization expenses of $45,000 for TV promotion videos.
Current wording
***Selling expenses.***Our selling expenses primarily consisted of advertising and promotion expenses. For the three months ended April 30, 2024, our selling expenses was $86,000, representing an increase of $14,000, or 19%, from $72,000 for the three months ended April 30, 2023. The increase was primarily due to an increase of amortization expenses of $14,000 for TV promotion videos.
Previous wording
As a percentage of sales, our absolute amount of selling expenses were negative 372% and 3% of our total revenues for the three months ended January 31, 2024 and 2023, respectively.
Current wording
As a percentage of sales, our absolute amount of selling expenses were 43% and 72% of our total revenues for the three months ended April 30, 2024 and 2023, respectively.
Previous wording
General and administrative expenses. Our general and administrative expenses primarily consisted of salary and welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit and legal fees. Our general and administrative expenses kept stable at approximately $0.5 million for the three months ended January 31, 2024 and 2023.
Current wording
General and administrative expenses. Our general and administrative expenses primarily consisted of salary of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit and legal fees. Our general and administrative expenses kept stable at approximately $0.6 million for the three months ended April 30, 2024 and 2023.
Previous wording
As a percentage of sales, our general and administrative expenses were 1,918% and 27% of our total revenues for the three months ended January 31, 2024 and 2023, respectively.
Current wording
As a percentage of sales, our general and administrative expenses were 318% and 630% of our total revenues for the three months ended April 30, 2024 and 2023, respectively.
Previous wording
Gain from investment in trading securities. Gain from investments in trading securities represented unrealized gains from investment in trading securities, which was measured at market price. For the three months ended January 31, 2024 and 2023, the Company recorded a gain from investment in trading securities of $80,670 and $39,120, respectively.
Current wording
(Loss) gain from investment in trading securities. (Loss) gain from investments in trading securities represented unrealized (loss) gain from investment in trading securities, which was measured at market price. For the three months ended April 30, 2024 and 2023, the Company recorded a loss from investment in trading securities of approximately $0.3 million and a gain from investment in trading securities of approximately $82,265, respectively.
Previous wording
Income tax expense was $nil for the three months ended January 31, 2024 due to net operating loss incurred in the quarter. Income tax expense was $566,957 for the three months ended January 31, 2023, which arose from net income earned by ATIF BC.
Current wording
Income tax expense was $nil for the three months ended April 30, 2024 due to net operating loss incurred in the quarter. Income tax expense was $8,099 for the three months ended April 30, 2023, which arose from net income earned by ATIF BC.
Previous wording
Net (loss) income. As a result of foregoing, net loss was approximately $1.0 million for the six months ended January 31, 2024, a change of $1.7 million from net income of approximately $0.7 million for the six months ended January 31, 2023.
Current wording
Net loss. As a result of foregoing, net loss was approximately $0.8 million for the three months ended April 30, 2024, an increase of approximately $0.5 million from net loss of $0.3 million for the same period ended April 30, 2023.
Previous wording
Comparison of Operation Results for the Six Months ended January 31, 2024 and 2023
Current wording
Comparison of Operation Results for the Nine Months Ended April 30, 2024 and 2023
Previous wording
The following table summarizes the results of our operations for the six months ended January 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
Current wording
The following table summarizes the results of our operations for the nine months ended April 30, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
Previous wording
***Revenues.***Our total revenue decreased by approximately $1.9 million from approximately $1.9 million for the three months ended January 31, 2023, to $25,000 in three months ended January 31, 2024.
Current wording
***Revenues.***Our total revenue decreased by approximately $1.9 million from approximately $2.3 million for the nine months ended April 30, 2023, to approximately $0.4 million in nine months ended April 30, 2024.
Previous wording
During the six months ended January 31, 2024, the Company provided listing related consulting services for four customers and earned consulting service fees of approximately $0.2 million. During the six months ended January 31, 2023, we completed phase I and phase II services for four customers and earned consulting service fees of $2.2 million.
Current wording
During the nine months ended April 30, 2024, the Company provided listing related consulting services for four customers and earned consulting service fees of approximately $0.4 million. During the nine months ended April 30, 2023, we completed phase I and phase II services for four customers and earned consulting service fees of $2.3 million.
Previous wording
***Selling expenses.***Our selling expenses primarily consisted of advertising and promotion expenses. For the six months ended January 31, 2024, our selling expenses was $165,000, representing an increase of $112,000, or 211%, from $53,000 for the six months ended January 31, 2023. The increase was primarily due to an increase of amortization expenses of $112,000 for TV promotion videos..
Current wording
***Selling expenses.***Our selling expenses primarily consisted of advertising and promotion expenses. For the nine months ended April 30, 2024, our selling expenses was approximately $0.3 million, representing an increase of approximately $0.1 million, or 101%, from approximately $0.1 million for the nine months ended April 30, 2023. The increase was primarily due to an increase of amortization expenses of approximately $0.1 million for TV promotion videos..
Previous wording
As a percentage of sales, our absolute amount of selling expenses were 110% and 2% of our total revenues for the six months ended January 31, 2024 and 2023, respectively.
Current wording
As a percentage of sales, our absolute amount of selling expenses were 72% and 5% of our total revenues for the nine months ended April 30, 2024 and 2023, respectively.
Previous wording
General and administrative expenses. Our general and administrative expenses primarily consisted of salary and welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit and legal fees. Our general and administrative expenses increased from approximately $1.1 million in the six months ended January 31, 2023 to $1.2 million in the same period of 2024, which was primarily due to an increase of payroll expenses of approximately $0.1 million for other staff as a result of increase in headcount.
Current wording
General and administrative expenses. Our general and administrative expenses primarily consisted of salary and welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit and legal fees. Our general and administrative expenses increased from approximately $1.7 million in the nine months ended April 30, 2023 to approximately $1.8 million in the same period of 2024, which was primarily due to an increase of legal expenses of approximately $0.2 million for legal proceedings with both Boustead Securities, LLC and J.P Morgan Securities LLC.
Previous wording
As a percentage of sales, our general and administrative expenses were 793% and 49% of our total revenues for the six months ended January 31, 2024 and 2023, respectively.
Current wording
As a percentage of sales, our general and administrative expenses were 521% and 74% of our total revenues for the nine months ended April 30, 2024 and 2023, respectively.
Previous wording
(Loss) gain from investment in trading securities. (Loss) gain from investments in trading securities represented unrealized gains or losses from investment in trading securities, which was measured at market price. For the six months ended January 31, 2024 and 2023, the Company recorded a loss from investment in trading securities of $28,734 and a gain from investment int trading securities of $19,116, respectively.
Current wording
(Loss) gain from investment in trading securities. (Loss) gain from investments in trading securities represented unrealized gains or losses from investment in trading securities, which was measured at market price. For the nine months ended April 30, 2024 and 2023, the Company recorded a loss from investment in trading securities of approximately $0.3 million and a gain from investment int trading securities of approximately $0.1 million, respectively.
Previous wording
Gain from disposal of subsidiaries. For the six months ended January 31, 2023, the Company reported a gain of $0.06 million from disposal of ATIF GP. For six months ended January 31, 2024, the Company did not record gain or loss from disposal of subsidiaries.
Current wording
Gain from disposal of subsidiaries. For the nine months ended April 30, 2023, the Company reported a gain of $0.06 million from disposal of ATIF GP. For nine months ended April 30, 2024, the Company did not record gain or loss from disposal of subsidiaries.
Previous wording
Income tax expense was $nil for the six months ended January 31, 2024 due to net operating loss incurred. Income tax expense was $566,957 for the six months ended January 31, 2023, which arose from net income earned by ATIF BC.
Current wording
Income tax expense was $nil for the nine months ended April 30, 2024 due to net operating loss incurred. Income tax expense was approximately $0.6 million for the nine months ended April 30, 2023, which arose from net income earned by ATIF BC.
Previous wording
Net (loss) income. As a result of foregoing, net loss was approximately $0.4 million for the three months ended January 31, 2024, a change of approximately 1.2 million from net income of $0.8 million for the same period ended January 31, 2023.
Current wording
Net (loss) income. As a result of foregoing, net loss was approximately $1.8 million for the nine months ended April 30, 2024, a change of $2.2 million from net income of approximately $0.4 million for the nine months ended April 30, 2023.
Previous wording
For the three and six months ended January 31, 2024, the Company reported a net loss of approximately $0.4 million and approximately $1.0 million, respectively. For the three and six months ended January 31, 2023, the Company reported a net income of approximately $0.8 million and $0.7 million, respectively. For the six months ended January 31, 2024 and 2023, the Company reported operating cash outflows of $17,413 and approximately $0.8 million, respectively.
Current wording
For the three and nine months ended April 30, 2024, the Company reported a net loss of approximately $0.8 million and approximately $1.8 million, respectively. For the three and nine months ended April 30, 2023, the Company reported a net loss of approximately $0.3 million and a net income of approximately $0.4 million, respectively. For the nine months ended April 30, 2024 and 2023, the Company reported operating cash outflows of $84,188 and approximately $1.4 million, respectively.
Previous wording
As of January 31, 2024, the Company had cash of approximately $0.1 million, accounts receivable of approximately of $0.5 million, and short-term investments of approximately $0.5 million, which were highly liquid. On the other hand, the Company had current liabilities of approximately $1.5 million, among which approximately $0.7 million were due to related parties. The balance due to related parties are payable on demand and may be extended. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources.
Current wording
As of April 30, 2024, the Company had cash of approximately $2.1 million, accounts receivable of approximately of $0.2 million and short-term investments of approximately $0.2 million, which were highly liquid. On the other hand, the Company had current liabilities of approximately $0.2 million The Company’s current assets could well cover its current liabilities. For the nine months ended April 30, 2024, the Company raised net proceeds of approximately $2.3 million from issuance of ordinary shares in a private placement. In addition, one of the related parties waived liabilities payable of approximately $0.7 million due to the related party. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources.
Previous wording
Because of losses from operations, working capital deficit, and the requirement of additional capital to fund our current operating plan at January 31, 2024, these factors indicate the existence of an uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern.
Current wording
Because of losses from operations and the requirement of additional capital to fund our current operating plan at April 30, 2024, these factors indicate the existence of an uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
Net cash used in operating activities was $17,413 in the six months ended January 31, 2024. Net cash used in operating activities was primarily comprised of net loss of approximately $1.0 million, adjusted for amortization of right of use assets of approximately $0.2 million, and net changes in our operating assets and liabilities, principally comprising of (i) a decrease of accounts receivable of approximately $0.2 million and $0.6 million, respectively, due from third party customers and related party customers as a result of collection of consulting fees from customers..
Current wording
Net cash used in operating activities was $84,188 in the nine months ended April 30, 2024. Net cash used in operating activities was primarily comprised of net loss of approximately $1.8 million, adjusted for loss from investment of trading securities of approximately $0.3 million, and net changes in our operating assets and liabilities, principally comprising of (i) a decrease of accounts receivable of approximately $0.5 million and $0.6 million, respectively, due from third party customers and related party customers as a result of collection of consulting fees from customers, (ii) a decrease of prepaid expenses and other current assets of approximately $0.2 million due to amortization of prepaid advertising service fees, and (iii) an increase of accrued expenses and other current liabilities of approximately of $0.2 million as a result of accrual of payroll expenses and legal service fees.
Previous wording
Net cash used in operating activities was approximately $0.8 million in the six months ended January 31, 2023. Net cash used in operating activities was primarily comprised of net income of approximately $0.7 million, adjusted for amortization of right of use assets of approximately $0.2 million, and net changes in our operating assets and liabilities, principally comprising of an increase of accounts receivable of approximately $1.7 million as we provided financial consulting services to more customers during the six months ended January 31, 2023.
Current wording
Net cash used in operating activities was $1.4 million in the nine months ended April 30, 2023. Net cash used in operating activities was primarily comprised of net income of $0.4 million, adjusted for amortization of right of use assets of $0.3 million, and net changes in our operating assets and liabilities, principally comprising of i) an increase of accounts receivable of $1.8 million as we provided financial consulting services to more customers during the nine months ended April 30, 2023, and ii) an increase of income tax payable of $0.6 million arising from net profit generated by one of our subsidiaries.
Previous wording
Net cash used in investing activities was approximately $0.2 million in the six months ended January 31, 2023, primarily used in loans of approximately $0.1 million to a related party, and investment in trading securities of approximately $0.1 million.
Current wording
Net cash used in investing activities was approximately $0.7 million in the nine months ended April 30, 2024, primarily used in investment in trading securities of approximately $0.4 million and loans made to related parties of approximately $0.3 million.
Previous wording
For the six months ended January 31, 2024 and 2023, the Company did not report cash inflows or outflows from financing activities.
Current wording
For the nine months ended April 30, 2023, the Company did not generate cash flows from financing activities.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net cash used in investing activities was approximately $0.4 million in the six months ended January 31, 2024, primarily used in investment in trading securities of approximately $0.4 million.