Agape ATP Corp (ATPC) - 10-K Filing Summary
Business Context and Reporting Period
Company: Agape ATP Corp (Nevada corporation)
Reporting Period: Fiscal Year Ended December 31, 2025
Primary Operations: The Company operates in the Health and Wellness industry, primarily in Malaysia, through network marketing and direct sales of supplements (ATP Zeta Health Program, E.A.T.S.) and complementary health therapies. It has recently diversified into renewable energy (ATPC Green Energy) and digital wellness platforms (ATPC Tech in China).
Corporate Structure: Operates through multiple subsidiaries in Malaysia, Hong Kong, Labuan, and China. The Company is a "smaller reporting company" and a "non-accelerated filer."
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $1,524,262 | $1,322,747 |
| Gross Profit | $838,270 | $759,148 |
| Gross Margin | 55.0% | 57.4% |
| Net Loss (Attributable to Agape ATP) | $(2,279,791) | $(2,470,474) |
| Loss Per Share (Basic/Diluted) | $(2.85) | $(31.74) |
| Total Assets | $24,591,278 | $3,240,020 |
| Total Liabilities | $2,165,177 | $1,310,899 |
| Cash and Cash Equivalents | $140,072 | $2,040,243 |
| Working Capital | $22,236,994 | $1,656,571 |
Note: The significant increase in Total Assets and Working Capital is primarily driven by a $23.8 million deposit for investment held with a third-party manager, not operational cash.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 15.2% to $1.52 million. This was driven by a 948.9% surge in "wellness and wellbeing lifestyle" revenue ($231,721) and a 226.7% increase in "green energy" revenue ($139,727). Conversely, core network marketing revenue declined 48.0% due to a strategic shift and limited product range.
- Profitability: Net loss narrowed by 7.2% to $2.31 million. This improvement was largely due to a significant non-operating "exchange gain, net" of $826,149 and an unrealized holding gain on marketable securities of $8,953.
- Capital Structure: The Company completed a private placement in early 2025, issuing 46 million shares for $23 million in proceeds. This significantly bolstered equity but resulted in substantial dilution.
- Asset Composition: Current assets jumped from $2.78 million to $24.29 million, almost entirely due to a $23.8 million "Deposit for investment" with Bi Cheng Investment Management Limited. No specific investment has been finalized as of the reporting date.
- Stock Split: A 1-for-50 reverse stock split was effected on February 10, 2026. Historical share data in the filing has been retroactively adjusted.
Guidance, Outlook, Risks, and Contingencies
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. While working capital appears high, it is tied up in an unallocated investment deposit. The Company relies on future financing and the successful execution of the investment strategy to fund operations.
- Internal Control Weaknesses: The Company identified three material weaknesses in internal controls over financial reporting: (1) insufficient accounting personnel, (2) lack of an internal audit function, and (3) insufficient procedures for assessing third-party investment managers. Management plans to hire personnel and engage consultants to remediate these issues.
- Nasdaq Delisting Risk: The Company received notice from Nasdaq regarding non-compliance with the minimum bid price requirement ($1.00) and the "Low Priced Stocks" rule (closing bid of $0.10 or less for 10 consecutive days). The Company has requested a hearing to appeal the delisting determination.
- Supplier Concentration: The Company relies heavily on three major suppliers, which accounted for 87% of total purchases in 2025. One supplier (CTA Nutriceuticals) is a related party.
- Investment Risk: Approximately 97% of current assets ($23.8 million) are held as a deposit with a third-party investment manager in China. There is significant credit and liquidity risk associated with the recoverability of these funds.
Investor Verification Checklist
- Investment Deposit Status: Verify the current status of the $23.8 million deposit with Bi Cheng Investment Management Limited. Confirm if any specific investment has been identified or if the funds remain unallocated.
- Nasdaq Compliance: Monitor the outcome of the hearing regarding the Nasdaq delisting determination and the Company's ability to regain compliance with listing standards.
- Internal Control Remediation: Assess the progress of hiring accounting staff and establishing an internal audit function to address the identified material weaknesses.
- Related Party Transactions: Review the volume and terms of transactions with related parties, particularly CTA Nutriceuticals (55.6% of purchases) and the CEO's borrowing balance ($831,709).
- Cash Flow Sustainability: Evaluate the Company's ability to generate positive operating cash flow given the continued net losses and the reliance on the unallocated investment deposit for working capital.