Agape ATP Corp

Previous wording

We generated revenue of $313,039, which comprised revenue from the Company’s network marketing business of $29,246 (approximately 9.3% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $283,793 (approximately 90.7% of revenue) for the three months ended June 30, 2024 as compared to $303,935, which comprised revenue from the Company’s network marketing business of $90,662 (approximately 29.8% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $213,273 (approximately 70.2% of revenue) for the three months ended June 30, 2023. Revenue from the Company’s network marketing business decreased significantly by $61,416, or approximately 67.7%. Revenue from the Company’s operations in the provision of complementary health therapies increased by $70,520, or approximately 33.1%. Total revenue increased by $9,104, or approximately 3.0%. The revenue decreased from the Company’s network marketing business was predominately due to the anticipated poor performance owing to limited product range available as compared to the previous years, which limited the potential development of this revenue stream. The revenue increased in provision of complementary health therapies business was due to after COVID-19 pandemic, more individual turned to complementary health therapies as preventive care and wellness to maintain good health, prevent illness and promote overall well-being.

Current wording

We generated revenue of $331,289, which comprised revenue from the Company’s network marketing business of $29,133 (approximately 8.8% of revenue); revenue from the Company’s operations in the provision of complementary health therapies of $283,752 (approximately 85.7% of revenue) and revenue from Company’s operation in wellness and wellbeing lifestyle of $18,404 (approximately 5.5% of revenue) for the three months ended September 30, 2024 as compared to $355,314, which comprised revenue from the Company’s network marketing business of $89,208 (approximately 25.1% of revenue); revenue from the Company’s operations in the provision of complementary health therapies of $266,106 (approximately 74.9% of revenue) and there were no revenue generated from the Company’s operation in wellness and wellbeing lifestyle for the three months ended September 30, 2023. Revenue from the Company’s network marketing business decreased significantly by $60,075, or approximately 67.3%. Revenue from the Company’s operations in the provision of complementary health therapies increased by $17,646, or approximately 6.6%. The Company generated $18,404 from skin care and healthcare products, a new revenue stream from the Company’s operations in wellness and wellbeing lifestyle. Total revenue decreased by $24,025, or approximately 6.8%. The revenue decreased from the Company’s network marketing business was predominately due to the poor performance owing to limited product range available as compared to the previous years, which limited the potential development of this revenue stream. The revenue increased in provision of complementary health therapies business was due to after COVID-19 pandemic, more individual turned to complementary health therapies as preventive care and wellness to maintain good health, prevent illness and promote overall well-being. To align with Company’s core mission and emphasizing commitment to health and wellness, the Company venture into a new revenue stream by providing skin care and healthcare products in the Company’s operation in wellness and wellbeing lifestyle.

Previous wording

Cost of revenue for the three months ended June 30, 2024 amounted to $119,478 as compared to $107,931 for the three months ended June 30, 2023, an increase of $11,547, or approximately 10.7%. The increase was due to the higher product cost in the Company’s network marketing business; and the varying gross profit margins in the Company’s operations in the provision of complementary health therapies.

Current wording

Cost of revenue for the three months ended September 30, 2024 amounted to $147,104 as compared to $120,586 for the three months ended September 30, 2023, an increase of $26,518 or approximately 22.0%. The increase was due to the higher product cost in the Company’s network marketing business and the varying gross profit margins in the Company’s operations in the provision of complementary health therapies.

Previous wording

Gross profit for the three months ended June 30, 2024 amounted to $193,561, represented a gross margin of approximately 61.8% as compared to $196,004 for the three months ended June 30, 2023, equivalent to a gross margin of approximately 64.5%. The decrease in gross margin was predominantly due to lower gross margin sustained by the Company’s network marketing business and the varying type of health therapies offered, gross margin associated with the provision of complementary health therapies.

Current wording

Gross profit for the three months ended September 30, 2024 amounted to $184,185, represented a gross margin of approximately 55.6% as compared to $234,728 for the three months ended September 30, 2023, equivalent to a gross margin of approximately 66.1%. The decrease in gross margin was predominantly due to lower gross margin sustained by the Company’s network marketing business and the varying type of health therapies offered, gross margin associated with the provision of complementary health therapies.

Previous wording

Our operating expenses consist of selling expenses, commission expenses and general and administrative expenses (as defined below). Total operating expenses were $647,146 for the three months ended June 30, 2024, increased by $91,610 or approximately 16.5% from $555,537 for the three months ended June 30, 2023.

Current wording

Our operating expenses consist of selling expenses, commission expenses and general and administrative expenses (as defined below). Total operating expenses were $732,295 for the three months ended September 30, 2024, increased by $180,489 or approximately 32.7% from $551,806 for the three months ended September 30, 2023.

Previous wording

Selling expenses for the three months ended June 30, 2024 amounted to $38,008 as compared to $64,126 for the three months ended June 30, 2023, a decrease of $26,118, or approximately 40.7%. The Company’s selling expenses typically comprise salaries and benefits expenses which represented approximately 70% to 85% of total selling expenses, credit card processing fees and promotional expenses.

Current wording

Selling expenses for the three months ended September 30, 2024 amounted to $41,582 as compared to $49,285 for the three months ended September 30, 2023, a decrease of $7,703, or approximately 15.6%. The Company’s selling expenses typically comprise salaries and benefits expenses which represented approximately 80% to 85% of total selling expenses, credit card processing fees and promotional expenses.

Previous wording

Commission expenses were $7,335 and $21,942 for the three months ended June 30, 2024 and 2023, respectively. The decrease in commission expenses was in line with the decrease in revenue in Company’s network marketing business.

Current wording

Commission expenses were $6,894 and $14,002 for the three months ended September 30, 2024 and 2023, respectively. The decrease in commission expenses was in line with the decrease in revenue in Company’s network marketing business.

Previous wording

G&A expenses for the three months ended June 30, 2024 amounted to $601,804, as compared to $469,469 for the three months ended June 30, 2023, an increase of $132,335, or approximately 28.2%. The Company’s G&A expenses typically comprise ofsalaries and benefits expenses, rental expenses, professional expenses and depreciation expenses. The increase in G&A expenses was mainly due to the salary incurred for one executive director and three independent directors, professional fees and the Nasdaq annual listing fees.

Current wording

G&A expenses for the three months ended September 30, 2024 amounted to $683,819, as compared to $488,519 for the three months ended September 30, 2023, an increase of $195,300, or approximately 40.0%. The Company’s G&A expenses typically comprise ofsalaries and benefits expenses, rental expenses, professional expenses and depreciation expenses. The increase in G&A expenses was mainly due to the salary incurred for one executive director and three independent directors, professional fees and the Nasdaq annual listing fees.

Previous wording

For the three months ended June 30, 2024, the Company recorded an amount of $31,110 as other income, net, as compared to $22,355 other expenses, net, for the three months ended June 30, 2023, represented a change of $53,465, or approximately 239.2%.

Current wording

For the three months ended September 30, 2024, the Company recorded an amount of $21,196 as other income, net, as compared to $3,714 other expenses, net, for the three months ended September 30, 2023, represented an increase of $24,910 in other income, net, or approximately 670.7%.

Previous wording

The net other income of $58,392 generated during the six months ended June 30, 2024 comprised foreign currency exchange loss of $780, unrealized holding loss on marketable securities of $5,466, other income, net of $22,497 and interest income of $42,141. The net other expenses of $6,762 incurred during the six months ended June 30, 2023 comprised foreign currency exchange loss of $34,576, unrealized holding gain on marketable securities of $8,710, other income, net of $12,500, interest income of $4,817 and gain on disposal of property and equipment of $1,787.

Current wording

The other income, net of $21,196 generated during the three months ended September 30, 2024 comprised of foreign currency exchange gain of $2,525, unrealized holding loss on marketable securities of $1,176, other income, net of $3,445, gain on disposal of property and equipment of $111 and interest income of $16,291. The other expenses, net of $3,714 incurred during the three months ended September 30, 2023 comprised foreign currency exchange loss of $382, unrealized holding loss on marketable securities of $3,872, other expenses, net of $98, interest income of $658 and loss on disposal of property and equipment of $20.

Previous wording

The Company recorded provision for income taxes of $9,840 and benefit of income taxes of $2,439 for the three months ended June 30, 2024 and 2023, respectively. Both the benefit of income taxes as well as the provision for income taxes were in respect of the Company’s operations in Malaysia.

Current wording

The Company recorded benefit of income taxes of $2,875 and provision for income taxes of $3,943 for the three months ended September 30, 2024 and 2023, respectively. Both the provision for income taxes as well as the benefit of income taxes were in respect of the Company’s operations in Malaysia.

Previous wording

Net loss increased by $52,867 from net loss of $379,449 for the three months ended June 30, 2023 to net loss of $432,315 for the three months ended June 30, 2024, mainly due to reasons as discussed above.

Current wording

Net loss increased by $199,304 from a net loss of $324,735 for the three months ended September 30, 2023 to a net loss of $524,039 for the three months ended September 30, 2024, mainly due to reasons as discussed above.

Previous wording

We generated revenue of $631,682, which comprised revenue from the Company’s network marketing business of $66,325 (approximately 10.5% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $565,357 (approximately 89.5% of revenue) for the six months ended June 30, 2024 as compared to $684,703, which comprised revenue from the Company’s network marketing business of $229,521 (approximately 33.5% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $455,182 (approximately 66.5% of revenue) for the six months ended June 30, 2023. Revenue from the Company’s network marketing business decreased significantly by $163,196, or approximately 71.1%. Revenue from the Company’s operations in the provision of complementary health therapies increased by $110,175, or approximately 24.2%. Total revenue decreased by $53,021, or approximately 7.7%. The decrease was predominately due to the anticipated poor performance from the Company’s network marketing business owing to limited product range available as compared to the previous years, which limited the potential development of this revenue stream.

Current wording

We generated revenue of $962,971, which comprised revenue from the Company’s network marketing business of $95,458 (approximately 9.9% of revenue); revenue from the Company’s operations in the provision of complementary health therapies of $849,109 (approximately 88.2% of revenue) and revenue from Company’s operation in wellness and wellbeing lifestyle of $18,404 (approximately 1.9% of revenue) for the nine months ended September 30, 2024 as compared to $1,040,017, which comprised revenue from the Company’s network marketing business of $318,729 (approximately 30.6% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $721,288 (approximately 69.4% of revenue) for the nine months ended September 30, 2023. Revenue from the Company’s network marketing business decreased significantly by $223,271, or approximately 70.1%. Revenue from the Company’s operations in the provision of complementary health therapies increased by $127,821, or approximately 17.7%. The Company generated $18,404 from skin care and health products, a new revenue stream from the Company’s operations in wellness and wellbeing lifestyle. Total revenue decreased by $77,046, or approximately 7.4%. The decrease was predominately due to the poor performance from the Company’s network marketing business owing to limited product range available as compared to the previous years, which limited the potential development of this revenue stream.

Previous wording

Cost of revenue for the six months ended June 30, 2024 amounted to $234,701 as compared to $236,289 for the six months ended June 30, 2023, a decrease of $1,588, or approximately 0.7%. The decrease was not in line with the decrease in revenue due to higher product cost in the Company’s network marketing business and the varying gross profit margins in the Company’s operations in the provision of complementary health therapies.

Current wording

Cost of revenue for the nine months ended September 30, 2024 amounted to $381,805 as compared to $356,875 for the nine months ended September 30, 2023, an increase of $24,929, or approximately 7.0%. The increase was not in line with the decrease in revenue due to higher product cost in the Company’s network marketing business and the varying gross profit margins in the Company’s operations in the provision of complementary health therapies.

Previous wording

Gross profit for the six months ended June 30, 2024, amounted to $396,981, represented a gross margin of approximately 62.8% as compared to $448,414 for the six months ended June 30, 2023, equivalent to a gross margin of approximately 65.5%. The decrease in gross margin was predominantly due to lower gross margin sustained by the Company’s network marketing business and the varying type of health therapies offered, gross margin associated with the provision of complementary health therapies.

Current wording

Gross profit for the nine months ended September 30, 2024, amounted to $581,166, represented a gross margin of approximately 60.4% as compared to $683,142 for the nine months ended September 30, 2023, equivalent to a gross margin of approximately 65.7%. The decrease in gross margin was predominantly due to lower gross margin sustained by the Company’s network marketing business and the varying type of health therapies offered, gross margin associated with the provision of complementary health therapies.

Previous wording

Our operating expenses consist of selling expenses, commission expenses, general and administrative expenses. Total operating expenses were $1,574,105 for the six months ended June 30, 2024, increased by $312,274 or approximately 24.7% from $1,261,831 for the six months ended June 30, 2023.

Current wording

Our operating expenses consist of selling expenses, commission expenses, general and administrative expenses. Total operating expenses were $2,306,400 for the nine months ended September 30, 2024, increased by $492,763 or approximately 27.2% from $1,813,637 for the nine months ended September 30, 2023.

Previous wording

Selling expenses for the six months ended June 30, 2024 amounted to $88,356 as compared to $140,224 for the six months ended June 30, 2023, a decrease of $51,868, or approximately 37.0%, predominantly due to decrease in promotional expenses and reduced in number of headcounts as compared to previous year. The Company’s selling expenses typically comprise ofsalaries and benefits expenses which represented approximately 70% to 85% of total selling expenses, credit card processing fees and promotional expenses.

Current wording

Selling expenses for the nine months ended September 30, 2024 amounted to $129,938 as compared to $189,509 for the nine months ended September 30, 2023, a decrease of $59,571, or approximately 31.4%, predominantly due to decrease in promotional expenses and reduced in number of headcounts as compared to previous year. The Company’s selling expenses typically comprise ofsalaries and benefits expenses which represented approximately 80% to 85% of total selling expenses, credit card processing fees and promotional expenses.

Previous wording

Commission expenses were $16,679 and $55,884 for the six months ended June 30, 2024 and 2023, respectively. The decrease in commission expenses was in line with the decrease in revenue in Company’s network marketing business.

Current wording

Commission expenses were $23,573 and $69,886 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $46,313, or approximately 66.3%. The decrease in commission expenses was in line with the decrease in revenue in Company’s network marketing business.

Previous wording

G&A expenses for the six months ended June 30, 2024 amounted to $1,469,070, as compared to $1,065,723 for the six months ended June 30, 2023, an increase of $403,347, or approximately 37.8%. The increase in G&A expenses was mainly due to the salary incurred for one executive director and three independent directors, professional fees and the Nasdaq annual listing fees. The Company’s G&A expenses typically comprise ofsalaries and benefits expenses, rental expenses, professional expenses and depreciation expenses.

Current wording

G&A expenses for the nine months ended September 30, 2024 amounted to $2,152,889, as compared to $1,554,242 for the nine months ended September 30, 2023, an increase of $598,647, or approximately 38.5%. The increase in G&A expenses was mainly due to the salary incurred for one executive director and three independent directors, professional fees and the Nasdaq annual listing fees. The Company’s G&A expenses typically comprise ofsalaries and benefits expenses, rental expenses, professional expenses and depreciation expenses.

Previous wording

For the six months ended June 30, 2024, the Company recorded an amount of $58,392 as other income, net, as compared to $6,762 other expenses, net, for the six months ended June 30, 2023, represented an increase of $65,154 or approximately 963.5%.

Current wording

For the nine months ended September 30, 2024, the Company recorded an amount of $79,588 as other income, net, as compared to $10,476 other expenses, net, for the nine months ended September 30, 2023, represented an increase of $90,064 in other income, net, or approximately 859.7%.

Previous wording

The net other income of $31,110 generated during the three months ended June 30, 2024 comprised of foreign currency exchange gain of $62, unrealized holding loss on marketable securities of $6,639, other income, net of $18,355 and interest income of $19,332. The net other expenses of $22,355 incurred during the three months ended June 30, 2023 comprised foreign currency exchange loss of $33,700, unrealized holding gain on marketable securities of $3,790, other income, net of $4,134, interest income of $1,634 and gain on disposal of property and equipment of $1,787.

Current wording

The other income, net of $79,588 generated during the nine months ended September 30, 2024 comprised foreign currency exchange gain of $1,745, unrealized holding loss on marketable securities of $6,642, other income, net of $25,942, gain on disposal of property and equipment of $111 and interest income of $58,432. The other expenses, net of $10,476 incurred during the nine months ended September 30, 2023 comprised foreign currency exchange loss of $34,958, unrealized holding gain on marketable securities of $4,838, other income, net of $12,402, interest income of $5,475 and gain on disposal of property and equipment of $1,767.

Previous wording

The Company recorded provision for income taxes of $16,678 and benefit of income taxes of $6,655 for the six months ended June 30, 2024 and 2023, respectively. Both the benefit of income taxes as well as the provision for income taxes were in respect of the Company’s operations in Malaysia.

Current wording

The Company recorded provision for income taxes of $13,803 and benefit of income taxes of $2,712 for the nine months ended September 30, 2024 and 2023, respectively. Both the provision for income taxes as well as the benefit of income taxes were in respect of the Company’s operations in Malaysia.

Previous wording

Net loss increased by $321,886 from net loss of $813,524 for the six months ended June 30, 2023 to net loss of $1,135,410 for the six months ended June 30, 2024, mainly due to reasons as discussed above.

Current wording

Net loss increased by $521,189 from net loss of $1,138,259 for the nine months ended September 30, 2023 to net loss of $1,659,449 for the nine months ended September 30, 2024, mainly due to reasons as discussed above.

Previous wording

As of June 30, 2024, we had working capital deficit of $3,017,911, consisting of cash and cash in bank of $420,887 and time deposits of $2,740,097 as compared to working capital of $4,113,614 consisted of cash and cash in bank of $510,019 and time deposits of $4,322,441 as of December 31, 2023. The Company had a net loss of $1,135,410 for the six months ended June 30, 2024 and accumulated deficits of $8,199,977 as of June 30, 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.

Current wording

As of September 30, 2024, we had working capital of $2,452,343, consisting of cash and cash in bank of $266,173 and time deposits of $2,452,860 as compared to working capital of $4,113,614 consisted of cash and cash in bank of $510,019 and time deposits of $4,322,441 as of December 31, 2023. The Company had a net loss of $1,659,449 for the nine months ended September 30, 2024 and accumulated deficits of $8,709,605 as of September 30, 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.

Previous wording

The following summarizes the key components of our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following summarizes the key components of our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024 was $1,656,000, comprised of net loss of $1,135,410, the increase in inventories of $6,747, the increase in prepaid taxes of $3,979, the increase in prepayments and deposits of $344,434, the increase in other receivables $1,470, the decrease in account payable (including related parties) $35,488, the decrease in customer deposits of $12,683, the payment of operating lease liabilities of $65,880, the decrease in other payables (including related parties) and accrued liabilities of $210,524. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $27,683, amortization of finance assets of $8,519, amortization of operating right-of-use assets of $66,509, unrealized holding loss on marketable securities of $5,466, deferred tax benefit of $212, provision for credit losses $16,960, the decrease in accounts receivables of $12,312, the decrease in other receivables (including related parties) of $6,723 and the increase of income tax payable of $16,231.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $2,080,879, comprised of net loss of $1,659,449, gain on disposal of office equipment of $111, the increase in inventories of $6,473, the increase in prepaid taxes of $8,592, the increase in prepayments and deposits of $329,898, the increase in other receivables $949, the decrease in customer deposits of $16,349, the payment of operating lease liabilities of $102,605, the decrease in other payables (including related parties) and accrued liabilities of $186,986. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $36,022, amortization of finance assets of $18,956, amortization of operating right-of-use assets of $103,187, unrealized holding loss on marketable securities of $6,642, deferred tax benefit of $218, allowance for expected credit loss $28,359, the decrease in accounts receivables of $6,353, the decrease in other receivables (including related parties) of $8,858, the increase in account payable (including related parties) $8,724, and the increase of income tax payable of $13,213.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2023 was $742,175, comprised of net loss of $813,524, increase in accounts receivables of $2,751, increase in amount due from related parties of $209, increase in inventories of $23,013, decrease in accounts payable –related parties of $4,758, decrease in customer deposits of $31,655, decrease in other payables and accrued liabilities of $228,812, payment of operating lease liabilities of $79,551, decrease in other payable –related parties of $3,457, the non-cash expenses on unrealized holding gain on marketable securities of $8,710, deferred tax benefit of $6,655, offset by the non-cash depreciation and amortization expense of $39,264, amortization of operating right-of-use assets of $78,333, decrease in prepaid taxes of $238,064, decrease in prepayments and deposits of $80,651 and increase in accounts payable of $24,608.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023 was $995,706, comprised of net loss of $1,138,259, increase in accounts receivables of $20,800, increase in amount due from related parties of $782, increase in inventories of $13,484, decrease in customer deposits of $45,083, payment of operating lease liabilities of $114,943, decrease in other payables and accrued liabilities of $219,676, decrease in other payable – related parties of $1,959, decrease in income tax payable of $10,674, the non-cash items on unrealized holding gain on marketable securities of $4,838, deferred tax benefit of $6,537, offset by the non-cash depreciation and amortization expense of $59,424, amortization of operating right-of-use assets of $113,804, refund in prepaid taxes of $307,967, decrease in prepayments and deposits of $84,978, increase in accounts payables (including related parties) of $15,156.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2023 was $6,499, which was due to purchase of equipment.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $48,611, which was due to purchase of property and equipment of $48,722 and proceeds from disposal of office equipment $111.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 was $3,567, which was due to purchase of equipment.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2023 was $7,200, which was in respect of purchase of equipment.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2024 was $2,847, which was the reduction of finance lease liability.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2024 was $6,691, which was the reduction of finance lease liability.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2023 was $22,861, which was due to the payment of deferred offering cost.

Current wording

Deferred offering cost made up the entire net cash used in financing activities for the nine months ended September 30, 2023 of $113,911.

Previous wording

The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include allowance for inventories obsolescence, impairment of long-lived assets and allowance for deferred tax assets. Following are the methods and assumptions used in determining our estimates.

Current wording

The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include allowance for inventories obsolescence, allowance for expected credit loss, impairment of long-lived assets and allowance for deferred tax assets. Following are the methods and assumptions used in determining our estimates.

Previous wording

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. The Company did not recognize any inventory write-downs nor inventory write-off for the six months ended June 30, 2024 and 2023.

Current wording

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. The Company did not recognize any inventory write-downs nor inventory write-off for the nine months ended September 30, 2024 and 2023.

Previous wording

As of June 30, 2024, the carrying amounts of operating right-of-use assets and property and equipment amounted to $281,256 and $53,990 as compared to December 31, 2023, the carrying amounts of operating right-of-use assets and property and equipment amounted to $357,301 and $77,858, respectively. No impairment losses on operating right-of-use assets and property and equipment were recognized as of June 30, 2024 and 2023.

Current wording

As of September 30, 2024, the carrying amounts of operating right-of-use assets and property and equipment amounted to $282,734 and $47,508 as compared to December 31, 2023, the carrying amounts of operating right-of-use assets and property and equipment amounted to $357,301 and $77,858, respectively. No impairment losses on operating right-of-use assets and property and equipment were recognized as of September 30, 2024 and 2023.

Previous wording

The Company estimates and records a provision for its expected credit losses 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 historical collectivity based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers.

Current wording

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 historical collectivity based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers.

Previous wording

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 Company’s revenue streams are recognized at a point in time for the Company’s sale of health and wellness products.

Current wording

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 Company’s revenue streams are recognized at a point in time for the Company’s sale of health and wellness products.

Previous wording

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 unaudited condensed consolidated financial statements for the six months ended and as at June 30, 2024.

Current wording

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 unaudited condensed consolidated financial statements for the nine months ended and as at September 30, 2024.

Previous wording

The adoption of these ASUs did not have a material impact on the unaudited condensed consolidated financial statements for the six months end and as at June 30, 2024.

Current wording

The adoption of these ASUs did not have a material impact on the unaudited condensed consolidated financial statements for the nine months end and as at September 30, 2024.