Agape ATP Corp (ATPC) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Agape ATP Corp is a Nevada corporation operating primarily in the health and wellness industry through network marketing and complementary health therapies in Malaysia, with a recent strategic pivot into renewable energy. The company is classified as a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Revenue | $370,593 | $331,289 | $1,125,129 | $962,971 |
| Gross Profit | $239,103 | $184,185 | $604,329 | $581,166 |
| Gross Margin | 64.5% | 55.6% | 53.7% | 60.4% |
| Net Loss | $(595,370) | $(524,039) | $(1,931,535) | $(1,659,449) |
| Net Loss Attributable to ATPC | $(586,827) | $(509,628) | $(1,902,854) | $(1,662,035) |
| Cash and Equivalents | $133,714 | $2,040,243 (Dec 31, 2024) | N/A | |
| Total Assets | $24,389,344 | $3,240,020 (Dec 31, 2024) | N/A | |
| Accumulated Deficit | $(11,420,899) | $(9,518,045) (Dec 31, 2024) | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 11.9% QoQ and 16.8% YTD compared to 2024. This was driven by a 392% increase in skin care/healthcare product sales and the introduction of a new Green Energy segment ($138k YTD revenue). Conversely, network marketing revenue declined 41% QoQ due to a strategic shift.
- Expense Increases: Operating expenses rose 14.8% QoQ and 11.1% YTD. General and Administrative (G&A) expenses increased significantly due to costs associated with the new wellness lifestyle operations and rental expenses.
- Balance Sheet Expansion: Total assets surged from $3.2M to $24.4M. This is primarily due to a $23 million deposit paid to Bi Cheng Investment Management Limited for future investment opportunities, classified under "Prepayments and deposits."
- Capital Raise: In March 2025, the company issued 46 million shares of common stock, raising $23 million in net proceeds, which funded the investment deposit.
Outlook, Risks, and Contingencies
- Going Concern: The filing explicitly states that the company's net losses and negative operating cash flows raise substantial doubt about its ability to continue as a going concern for the next twelve months. Liquidity depends on generating positive operating cash flow or obtaining external financing.
- Investment Risk: Approximately 95% of current assets ($23M) are tied up in a deposit with a third-party manager (Bi Cheng) for unidentified investment opportunities. The return on this investment is uncertain, and the funds are not yet allocated to a specific investee.
- Internal Controls: Management identified material weaknesses in internal controls, including insufficient accounting personnel, lack of an internal audit function, and inadequate procedures for assessing third-party investment managers.
- Related Party Transactions: Significant purchases and expenses are incurred with related parties, including CTA Nutriceuticals (67% of purchases in Q3) and the CEO, Mr. How Kok Choong.
Investor Verification Checklist
- Investment Deposit Status: Verify the current status of the $23 million deposit with Bi Cheng Investment Management Limited and the timeline for identifying specific investment targets.
- Cash Burn Rate: Assess the runway provided by the remaining cash ($133k) against the negative operating cash flow of $2.2M for the nine-month period.
- Revenue Sustainability: Confirm if the surge in skin care product revenue is sustainable or a one-time event, given the decline in the core network marketing business.
- Related Party Concentration: Review the dependency on CTA Nutriceuticals for over 60% of product purchases and the terms of these transactions.
- Remediation Plan: Evaluate the company's plan to address the material weaknesses in internal controls and the timeline for hiring qualified accounting personnel.