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CONCENTRATIONS OF RISKS
9 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
CONCENTRATIONS OF RISKS

19. CONCENTRATIONS OF RISKS

 

(a) Major customers

 

For the three months ended September 30, 2024 and 2023, no customer accounted for 10% or more of the Company’s total revenues. For the nine months ended September 30, 2024 and 2023, no customer accounted for 10% or more of the Company’s total revenues.

 

As of September 30, 2024, six individual customers accounted for approximately 22.8% of the Company’s balance of accounts receivable, respectively. As of December 31, 2023, six individual customers and one company accounted for approximately 40.2% of the Company’s balance of accounts receivable.

 

(b) Major vendors

 

For the three months ended September 30, 2024, two vendors accounted for approximately 57.3% and 19.0% of the Company’s total purchases. For the three months ended September 30, 2023, two vendors accounted for approximately 67.5% and 31.2% of the Company’s total purchases, respectively.

 

For the nine months ended September 30, 2024, the same two vendors accounted for approximately 63.4% and 19.9% of the Company’s total purchases. For the nine months ended September 30, 2023, two vendors accounted for approximately 53.0% and 27.7% of the Company’s total purchases.

 

CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 57.3% and 63.4% of the Company’s total purchases for the three and nine months ended September 30, 2024, respectively. For the three months ended September 30, 2023, it accounted for approximately 67.5% and 53.0% of the Company’s total purchases, respectively.

 

As of September 30, 2024, two vendors accounted for approximately 54.6% and 24.6% of the Company’s total balance of accounts payable, respectively. As of December 31, 2023, two vendors accounted for approximately 61.8% and 35.4% of the Company’s total balance of accounts payable, respectively.

 

CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 24.6% and 35.4% of the Company’s total balance of accounts payable as of September 30, 2024 and December 31, 2023, respectively.

 

 

AGAPE ATP CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

19. CONCENTRATIONS OF RISKS (Continued)

 

(c) Commission Expenses to Sales Distributors and Stockists

 

No sales distributor accounted for 10% or more of the Company’s commission expense for the three months ended September 30, 2024. Two sales distributors accounted for 10% or more of the Company’s commission expense for the three months ended September 30, 2023.

 

For the nine months ended September 30, 2024, one sales distributor accounted for 20.3% of the Company’s commission expense. For the nine months ended September 30, 2023, one sales distributor accounted for 10% or more of the Company’s commission expense.

 

(d) Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of September 30, 2024 and December 31, 2023, $2,713,020 and $4,817,213 were deposited with financial institutions, respectively, $2,492,285 and $4,630,476 of these balances are not covered by deposit insurance, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

 

Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its account receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for expected credit loss based upon factors surrounding the credit risk of specific customers, historical trends and other information. Historically, the Company did not have any bad debt on its account receivable.

 

(e) Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of RM and HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

 

AGAPE ATP CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Currency expressed in United States Dollars (“US$”), except for number of shares)