Agape ATP Corp

Previous wording

We generated revenue of $1,322,747, which comprised of revenue from the Company’s network marketing business of $137,050 (approximately 10.4%); revenue from the Company’s 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 Company’s 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 Company’s network marketing business of $396,122 (approximately 27.7%); and $1,033,221 (approximately 72.2%) from the Company’s operations in the provision of complementary health therapies for the year ended December 31, 2023.

Current wording

We generated revenue of $1,524,262, which comprised of revenue from the Company’s network marketing business of $71,276 (approximately 4.7% of total revenue); revenue from the Company’s operations in the provision of complementary health therapies of $1,081,538 (approximately 71.0% of total revenue); $231,721 from operation in wellness and wellbeing lifestyle (approximately 15.2% of total revenue) and $139,727 from the operation in green energy (approximately 9.1% of total revenue) for the year ended December 31, 2025 as compared to revenue of $1,322,747, which comprised of revenue from the Company’s network marketing business of $137,050 (approximately 10.4% of total revenue); revenue from the Company’s operations in the provision of complementary health therapies of $1,120,843 (approximately 84.7% of total revenue); $22,091 (approximately 1.7% of total revenue) from skin care and healthcare products, a new revenue stream from the Company’s operations in wellness and wellbeing lifestyle and $42,763 (approximately 3.2% of total revenue) from the operation in green energy for the year ended December 31, 2024.

Previous wording

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 Company’s 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 Company’s operations in wellness and wellbeing lifestyle and $42,763 from the operation in green energy. The decreased revenue from the Company’s 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 company’s 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 Company’s 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.

Current wording

Total revenue for the year ended December 31, 2025 increased by $201,515, or approximately 15.2% from the year ended December 31, 2024. Revenue from the Company’s network marketing business decreased by $65,774, or approximately 48.0%, the revenue from the provision of complementary health therapies decreased by $39,305, or approximately 3.5%, whereas revenue from operation in wellness and wellbeing lifestyle increased by $209,630 or approximately 948.9% and revenue from operation in green energy increased by $96,964 or approximately 226.7%. The decreased revenue from the Company’s 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 2025 as compared to prior years due to the company strategically shifting the business focus from company’s network marketing business to operation in wellness and wellbeing lifestyle and green energy industry that can help restore growth and diversify income streams. The revenue from operation in wellness and wellbeing lifestyle increased was due to the company’s digital advertisement campaign and marketing activities to promote the skin care and healthcare products. The revenue decrease in provision of complementary health therapies business was due to lower revenue generated from overseas customers as compared to previous years.

Previous wording

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 Company’s operations in wellness and wellbeing lifestyle and green energy.

Current wording

Gross profit for the year ended December 31, 2025 amounted to $838,270, represented a gross margin of approximately 55.0%, as compared to $759,148 for the year ended December 31, 2024, which was equivalent to a gross margin of approximately 57.4%. The decrease in gross profit margin in year ended December 31, 2025 was due to low gross profit margin in green energy.

Previous wording

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, Company’s 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.

Current wording

The gross profit margin related to the network marketing business was approximately 58.8% and 69.6%, respectively; the gross profit margin related to our provision of complementary heath therapies business was approximately 55.1% and 59.1%, respectively; the gross profit margin related to operations in wellness and wellbeing lifestyle 84.3% and 2.3%, respectively; and the gross profit margin related to operations in green energy was approximately 3.4% and 2.9%, respectively; for the years ended December 31, 2025 and 2024. In addition to that, there was $11,825 and $7,081 inventory write-downs; and $7,035 and $0 inventory write-off, respectively, during the years ended December 31, 2025 and 2024.

Previous wording

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 Company’s 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.

Current wording

Selling expenses for the year ended December 31, 2025 amounted to $242,074 as compared to $162,712 for the year ended December 31, 2024, an increase of $79,362, or approximately 48.8%. The Company’s selling expenses typically comprise salaries and benefits expenses, credit card processing fees and promotional expenses. The increase in selling expenses was due to the increase in promotional expenses incurred in the operation in wellness and wellbeing lifestyle, the company launched digital advertisement campaign and marketing activities to promote the skin care and healthcare products.

Previous wording

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 Company’s network marketing business.

Current wording

Commission expenses were $73,691 and $34,905 for the years ended December 31, 2025 and 2024, respectively, representing a significant increase of $38,786, or approximately 111.1%. The significant increase in commission expenses was due to the increase in revenue from the operation in wellness and wellbeing lifestyle.

Previous wording

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 Company’s 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.

Current wording

G&A expenses for the year ended December 31, 2025 amounted to $3,779,152, as compared to $3,134,874 for the year ended December 31, 2024, representing an increase of $644,278, or approximately 20.6%. The Company’s G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses, depreciation expenses and allowance for credit loss. The increase in general and administrative expenses was due to the increase in professional fee.

Previous wording

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.

Current wording

For the year ended December 31, 2025, we recorded an amount of $951,325 as other income, net as compared to $92,233 other income, net for the year ended December 31, 2024, representing a significant change of $859,092. The net other income of $951,325 incurred during the year ended December 31, 2025 comprised of other income, net of $113,807, interest income of $3,416, unrealized holding gain on marketable securities of $8,953, exchange gain, net of $826,149 and loss on non-marketable securities of $1,000. 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.

Previous wording

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.

Current wording

We incurred income tax expense of $2,285 for the year ended December 31, 2025 as compared to $4,934 for the year ended December 31 2024. During the year ended December 31, 2025 and 2024, our operations in Malaysia incurred income taxes expenses as a result of provision assessment made by local tax authority for prior year tax.

Previous wording

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.

Current wording

We incurred a net loss of 2,307,607 for the year ended December 31, 2025, as compared to $2,486,044 for the year ended December 31, 2024, a decrease of $178,437, or approximately 7.2%, predominately due to reasons as discussed above.

Previous wording

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.

Current wording

As of December 31, 2025, we had working capital of $22,236,994 consisting of cash and cash in bank of $140,072 and no time deposits as compared to working capital of $1,656,571 consisting of cash and cash in bank of $240,243 and time deposits of $1,800,000 as of December 31, 2024. The Company had a net loss of $2,307,607 for the year ended December 31, 2025 and accumulated deficits of $11,797,836 as of December 31, 2025 as compared to 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.

Previous wording

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.

Current wording

Net cash used in operating activities for the year ended December 31, 2025 was $2,413,422 and were mainly comprised of the net loss of $2,307,607, unrealized holding gain on marketable securities of $8,953, unrealized exchange gain of $825,706, the increase in prepayments and deposits of $380,199, the decrease in accounts payables of $21,972, the payment of operating lease liabilities of $159,762, decrease of income tax payable of $3,573. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $24,903, amortization of operating right-of-use assets of $158,924, amortization of finance assets of $44,151, loss on non-marketable securities of $1,000, allowance for credit loss of $519,442, inventory write off of $7,035, inventory write-down of $11,825, the decrease in accounts receivables of $32,132, decrease in amount due from related parties of $162, the decrease in inventories of $3,348, the decrease in prepaid taxes $17,406, the decrease in other receivables of $2,489, the increase in accounts payables (related parties) of $14,010, the increase in customer deposits of $58,581, the increase in other payables and accrued liabilities of $112,551 and the increase in other payables (related parties) of $286,391.

Previous wording

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.

Current wording

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 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.

Previous wording

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.

Current wording

Net cash provided by financing activities for the year ended December 31, 2025 was $23,498,646, consisted of the proceeds from disposal of non-marketable securities of $500, the proceeds from issuance of common stock for $23,000,000, advance from director of $520,831 and reduction of finance lease liability of $22,685.

Previous wording

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 Company’s 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.

Current wording

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 Company’s consolidated financial statements include allowance for inventories obsolescence, impairment of long-lived assets, allowance for deferred tax assets, allowance for credit loss, 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.

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. For the years ended December 31, 2024 and 2023, the Company recognize an inventory write-downs of $7,081 and $0, respectively.

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. For the years ended December 31, 2025 and 2024, the Company recognize an inventory write-downs of $11,825 and $7,081; and inventory write-off of $7,035 and $0, respectively.

Previous wording

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.

Current wording

The Company conducts much of its business activities in Malaysia, Hong Kong and China 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.

Previous 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 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. For the years ended December 31, 2024 and 2023, the Company recognize an allowance for expected credit loss of $32,857 and $542, respectively.

Current wording

The Company estimates and records an allowance for 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 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. For the years ended December 31, 2025 and 2024, the Company recognize an allowance for credit loss of $8,082 and $32,857, respectively.

Previous wording

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.

Current wording

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 behavior 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 behavior 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.

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 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.

Current wording

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.

Previous wording

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.

Current wording

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. Details of the disclosures are set out in Note 18.

Previous wording

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 Company’s consolidated financial statements.

Current wording

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 has no material impact on the Company’s consolidated financial statements.

Previous wording

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.

Current wording

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 has no significant impact on our financial statements.

Previous wording

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.

Current wording

The FASB issued ASU 2024-03 and ASU 2025-01 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and Clarifying the Effective Date” in November 2024 and January 2025, respectively. This new guidance 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 new guidance are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, which early adoption permitted. This new guidance 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 new guidance. The Company is currently evaluating the effect of adopting this guidance.

Previous wording

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.

Current wording

Except for the above-mentioned pronouncements, there are no other new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows.