Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Oct. 31, 2023 | Dec. 15, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | ATIF HOLDINGS LIMITED | |
Trading Symbol | ATIF | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --07-31 | |
Entity Common Stock, Shares Outstanding | 9,627,452 | |
Amendment Flag | false | |
Entity Central Index Key | 0001755058 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Oct. 31, 2023 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38876 | |
Entity Incorporation, State or Country Code | D8 | |
Entity Address, Address Line One | 25391 Commercentre Dr. | |
Entity Address, Address Line Two | Ste 200 | |
Entity Address, City or Town | Lake Forest | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | 92630 | |
City Area Code | 308 | |
Local Phone Number | 888-8888 | |
Title of 12(b) Security | Ordinary Shares | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Entity Tax Identification Number | 00-0000000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 | |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 361,225 | $ 606,022 | |
Accounts receivable | 653,600 | 650,000 | |
Deposits | 86,000 | 86,000 | |
Investment in trading securities | 459,353 | 130,649 | |
Prepaid expenses and other current assets | 372,540 | 429,570 | |
Total current assets | 1,953,257 | 2,542,780 | |
Property and equipment, net | 88,300 | 93,637 | |
Intangible assets, net | 53,331 | 73,331 | |
Right-of- use assets, net | 945,706 | 1,058,822 | |
TOTAL ASSETS | 3,040,594 | 3,768,570 | |
CURRENT LIABILITIES | |||
Accounts payable, accrued expenses and other current liabilities | 376,981 | 293,140 | |
Deferred revenue | 70,000 | ||
Taxes payable | 31,200 | 31,200 | |
Operating lease liabilities, current | 375,278 | 415,411 | |
Total current liabilities | 1,495,717 | 1,539,719 | |
Operating lease liabilities, noncurrent | 630,987 | 689,498 | |
TOTAL LIABILITIES | 2,126,704 | 2,229,217 | |
Commitments | |||
EQUITY | |||
Ordinary shares, $0.001 par value, 100,000,000,000 shares authorized, 9,627,452 shares and 9,627,452 shares issued and outstanding as of October 31, 2023 and July 31, 2023, respectively | 9,627 | 9,627 | |
Additional paid-in capital | 29,196,350 | 29,196,350 | |
Accumulated deficit | (28,292,087) | (27,666,624) | |
Total ATIF Holdings Limited Stockholders’ equity | 913,890 | 1,539,353 | |
TOTAL LIABILITIES AND EQUITY | 3,040,594 | 3,768,570 | |
Related Party | |||
CURRENT ASSETS | |||
Accounts receivable | 600,000 | ||
Due from a related party | [1] | 20,539 | 40,539 |
CURRENT LIABILITIES | |||
Due to related parties | $ 712,258 | $ 729,968 | |
[1] As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Oct. 31, 2023 | Jul. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, authorized | 100,000,000,000 | 100,000,000,000 |
Ordinary shares, issued | 9,627,452 | 9,627,452 |
Ordinary shares, outstanding | 9,627,452 | 9,627,452 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 125,000 | $ 300,000 |
Operating expenses: | ||
Selling expenses | 72,000 | 5,000 |
General and administrative expenses | 709,779 | 562,896 |
Total operating expenses | 781,779 | 567,896 |
Loss from operations | (656,779) | (267,896) |
Other income (expenses): | ||
Interest income, net | 59,847 | |
Other income (expenses), net | 140,720 | 59,500 |
Loss from investment in trading securities | (109,404) | (20,004) |
Gain from disposal of subsidiaries | 56,038 | |
Total other income, net | 31,316 | 155,381 |
Loss before income taxes | (625,463) | (112,515) |
Income tax provision | ||
Net loss and comprehensive loss | $ (625,463) | $ (112,515) |
Loss Per share – basic (in Dollars per share) | $ (0.06) | $ (0.01) |
Weighted Average Shares Outstanding | ||
Basic (in Shares) | 9,627,452 | 9,627,452 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (Parentheticals) - $ / shares | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Loss Per share – diluted | $ (0.06) | $ (0.01) |
Diluted | 9,627,452 | 9,627,452 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) | Ordinary Share | Additional Paid in Capital | Accumulated deficit | Noncontrolling Interest | Total |
Balance at Jul. 31, 2022 | $ 9,627 | $ 29,496,350 | $ (24,784,325) | $ (369,045) | $ 4,352,607 |
Balance (in Shares) at Jul. 31, 2022 | 9,627,452 | ||||
Disposal of a subsidiary | (300,000) | 369,045 | 69,045 | ||
Net loss for the period | (112,515) | (112,515) | |||
Balance at Oct. 31, 2022 | $ 9,627 | 29,196,350 | (24,896,840) | 4,309,137 | |
Balance (in Shares) at Oct. 31, 2022 | 9,627,452 | ||||
Balance at Jul. 31, 2023 | $ 9,627 | 29,196,350 | (27,666,624) | $ 1,539,353 | |
Balance (in Shares) at Jul. 31, 2023 | 9,627,452 | 9,627,452 | |||
Net loss for the period | (625,463) | $ (625,463) | |||
Balance at Oct. 31, 2023 | $ 9,627 | $ 29,196,350 | $ (28,292,087) | $ 913,890 | |
Balance (in Shares) at Oct. 31, 2023 | 9,627,452 | 9,627,452 |
Uunaudited Condensed Consolidat
Uunaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (625,463) | $ (112,515) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 29,669 | 36,656 |
Amortization of right-of-use assets | 113,116 | 103,343 |
Expected credit loss allowance | 26,400 | |
Gain from disposal of a subsidiary | 69,045 | |
Loss from investment in trading securities | 109,403 | 20,004 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (30,000) | (100,000) |
Accounts receivable – related party | 600,000 | |
Due from buyers of Leaping Group Corporation | (57,973) | |
Deposits | 55,000 | |
Prepaid expenses and other current assets | 57,030 | (8,791) |
Deferred revenue | (70,000) | (20,785) |
Accrued expenses and other liabilities | 83,842 | 437,729 |
Lease liabilities | (98,644) | (58,004) |
Net cash provided by operating activities | 195,353 | 363,709 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (4,332) | (8,140) |
Investment in trading securities | (438,108) | (44,903) |
Investment in an equity investee | (91,294) | |
Loans made to a related party | (17,710) | (100,000) |
Collection of borrowings from a related party | 20,000 | 1,500 |
Net cash used in investing activities | (440,150) | (242,837) |
Net (decrease) increase in cash | (244,797) | 120,872 |
Cash, beginning of period | 606,022 | 1,750,137 |
Cash, end of period | 361,225 | 1,871,009 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest expenses | ||
Cash paid for income tax | ||
Supplemental disclosure of non-cash investing and financing activities of discontinued operations | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 109,492 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Oct. 31, 2023 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS ATIF Holdings Limited (“ATIF” or the “Company”), formerly known as Eternal Fairy International Limited and Asia Times Holdings Limited, was incorporated under the laws of the British Virgin Islands (“BVI”) on January 5, 2015, as a holding company to develop business opportunities in the People’s Republic of China (the “PRC” or “China”). The Company adopted its current name on March 7, 2019. The Company is primarily engaged in providing business advisory and financial consulting services to small and medium-sized enterprise customers. On October 6 and October 7, 2022, ATIF Inc., a wholly owned subsidiary of ATIF, established ATIF Business Consulting LLC (“ATIF BC”) and ATIF Business Management LLC (“ATIF BM”) under the laws of the State of California of the United States, respectively. On April 25, 2022, the Company established ATIF Investment Limited (“ATIF Investment”) under the laws of BVI. On December 22, 2021, ATIF Inc. established ATIF BD LLC (“ATIF BD”) under the laws of California of the United States. On August 1, 2022, the Company entered into a sales agreement with a third party, pursuant to which the Company sold all of its equity interest in ATIF GP at the cost of $50,000. The management believed the disposition does not represent a strategic shift because it is not changing the way it is running its consulting business. The Company has not shifted the nature of its operations. The termination is not accounted as discontinued operations in accordance with ASC 205-20. Upon the closing of the Agreement, ATIF GP is no longer our subsidiary and ATIF USA ceased to be the investment manager of ATIF LP. As of October 31, 2023, the Company’s unaudited condensed consolidated financial statements reflect the operating results of the following entities: Name of Entity Date of Place of % of Principal Activities Parent company: ATIF Holdings Limited (“ATIF”) January 5, 2015 British Virgin Islands Parent Investment holding Wholly owned subsidiaries of ATIF ATIF Inc. (“ATIF USA”) October 26, 2020 USA 100% Consultancy and information technology support ATIF Investment Limited (“ATIF Investment”) April 25, 2022 BVI 100% Consultancy and information technology support ATIF BD December 22, 2021 USA 100% owned by ATIF USA Consultancy and information technology support ATIF BC October 6, 2022 USA 100% owned by ATIF USA Consultancy and information technology support ATIF BM October 6, 2022 USA 100% owned by ATIF USA Consultancy and information technology support |
Liquidity and Going Concern
Liquidity and Going Concern | 3 Months Ended |
Oct. 31, 2023 | |
Liquidity and Going Concern [Abstract] | |
LIQUIDITY AND GOING CONCERN | NOTE 2 – LIQUIDITY AND GOING CONCERN For the three months ended October 31, 2023 and 2022, the Company reported a net loss of approximately $0.6 million and $0.1 million, respectively, and operating cash inflows approximately $0.2 million and $0.4 million. In assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. As of October 31, 2023, the Company had cash of $0.4 million and accounts receivables of $0.7 million due from third parties, which were highly liquid. On the other hand, the Company had current liabilities of $1.5 million, among which $0.7 million was due to related parties. The balance due to related parties are payable on demand and may be extended. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources. Because of losses from operations, working capital deficit, and the requirement of additional capital to fund our current operating plan at October 31, 2023, these factors indicate the existence of an uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern. The Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Oct. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited condensed consolidated balance sheets as of October 31, 2023 and for the unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended October 31, 2023 and 2022 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended July 31, 2023, which was filed with the SEC on November 13, 2023. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended July 31, 2023. The results of operations for the three months ended October 31, 2023 and 2022 are not necessarily indicative of the results for the full years. The unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for credit losses, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, revenue recognition, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates. Accounts Receivable, net On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of the guidance had no impact on the allowance for credit losses for accounts receivable. Prior to the Company’s adoption of ASU 2016-13, accounts receivable are presented net of allowance for doubtful accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the unaudited condensed consolidated statements of operations and comprehensive loss. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. After the adoption of ASU 2016-13, The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company uses loss-rate methods to estimate allowance for credit loss. The Company assesses collectability by reviewing accounts receivable on an individual basis because the Company had limited customers and each of them has difference characteristics, primarily based on business line and geographical area. In determining the amount of the allowance for credit losses, the Company multiplied the loss rate with the amortized cost of accounts receivable. The loss rate refers to the corporate default rate published by credit rating companies, which considers current economic conditions, reasonable and supportable forecasts of future economic conditions. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 – inputs to the valuation methodology are unobservable. Fair value of investment in trading securities are based on quoted prices in active markets. The carrying amounts of the Company’s other financial instruments including cash and cash equivalents, accounts receivable, deposits, due from related parties, and other current assets, accounts payable, due to related parties and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of these assets and liabilities. For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates used to discount the host contracts approximate market rates. For the three months ended October 31, 2023 and 2022, there are no transfers between different levels of inputs used to measure fair value. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”). To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. For the three months ended October 31, 2023 and 2022, the Company primarily generated revenues from consulting services to customers who would like to go public. The Company provides various consulting services to its members, especially to those who have the intention to be publicly listed in the stock exchanges in the United States and other countries. The Company categorizes its consulting services into three Phases: Phase I consulting services primarily include due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and recommendations. Management estimates that Phase I normally takes about three months to complete based on its past experience. Phase II consulting services primarily include reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s recommendation. Management estimates that Phase II normally takes about eight months to complete based on its past experience. Phase III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction; assistance in preparation of customers’ public filings for IPO or reverse merger transactions; and assistance in answering comments and questions received from regulatory agencies. Management believes it is very difficult to estimate the timing of this phase of service as the completion of Phase III services is not within the Company’s control. Each phase of consulting services is stand-alone and fees associated with each phase are clearly identified in service agreements. Revenue from providing Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase as the Company’s performance obligations related to these services are carried out over the whole duration of each Phase. Revenue from providing Phase III consulting services to customers is recognized upon completion of the reverse merger transaction or IPO transaction when the Company’s promised services are rendered and the Company’s performance obligations are satisfied. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the balance sheet. Depending on the complexity of the underlying service arrangement and related terms and conditions, significant judgments, assumptions, and estimates may be required to determine when substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions, and estimates regarding contracts executed in any specific period. Income Taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of October 31, 2023. As of October 31, 2023, all of the Company’s income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination by relevant tax authorities. Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is Mr. Liu, the Chairman of the Board of Directors and CEO. The Company’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the management has determined that the Company now operates in one operating segment with one reporting segment as of October 31, 2023 and July 31, 2023, which is the consulting service business. Risks and Uncertainty (a) Credit risk As of October 31, 2023, the Company held cash and cash equivalents of approximately $0.4 million deposited in the banks located in the U.S., which were insured by FDIC up to $250,000, and held cash and cash equivalents of $21,011 deposited in the investment bank accounts located in the U.S. which are not insured by FDIC. (b) Concentration risk Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its revenues and receivables with specific customers. For the three months ended October 31, 2023, three customers accounted for 48%, 40% and 12% of the Company’s consolidated revenue, respectively. For the three months ended October 31, 2022, one customer accounted for 100% of the Company’s consolidated revenue. As of October 31, 2023, two customers accounted for 56% and 44% of the Company’s consolidated accounts receivable, respectively. As of July 31, 2023, two customers accounted for 54% and 46% of the Company’s consolidated accounts receivable, respectively. For the three months ended October 31, 2023 and 2022, substantially all of the Company’s revenues was generated from providing going public related consulting services to customers. The concentration risk is mitigated by the Company’s plan to transition its consulting services from the PRC based customers to more international customers. (c) Other risks and uncertainties The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Oct. 31, 2023 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: October 31, July 31, (unaudited) Prepayment for advertising service fee (a) $ 336,000 $ 408,000 Advance to vendors - 10,000 Others 36,540 11,570 Total $ 372,540 $ 429,570 (a) Prepayment for advertising services represent the advance payments made by the Company to a third party advertising company for producing advertising contents. These prepayments are typically expensed over the period when the services are performed. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET Property and equipment, net consisted of the following: October 31, July 31, (unaudited) Furniture, fixtures and equipment $ 208,536 $ 204,204 Less: accumulated depreciation (120,236 ) (110,567 ) Property and equipment, net $ 88,300 $ 93,637 Depreciation expense was $9,669 and $16,656 for the three months ended October 31, 2023 and 2022, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Oct. 31, 2023 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS Net intangible assets consisted of the following: October 31, July 31, (unaudited) Software $ 320,000 $ 320,000 Less: accumulated amortization (266,669 ) (246,669 ) Intangible assets $ 53,331 $ 73,331 Amortization expense was $20,000 and $20,000 for the three months ended October 31, 2023 and 2022, respectively. |
Investments in Trading Securiti
Investments in Trading Securities | 3 Months Ended |
Oct. 31, 2023 | |
Investments in Trading Securities [Abstract] | |
INVESTMENTS IN TRADING SECURITIES | NOTE 7 – INVESTMENTS IN TRADING SECURITIES As of October 31, 2023 and July 31, 2023, the balance of investments in trading securities represented certain equity securities of listed companies purchased through various open market transactions by the Company during the relevant periods. All trading securities were invested by ATIF. The investments are initially recorded at cost, and subsequently measured at fair value with the changes in fair value recorded in other income (expenses), net in the consolidated statement of operations and comprehensive loss. For the three months ended October 31, 2023 and 2022, the Company recorded a decrease in fair value of $109,403 and $20,004, respectively. |
Operating Leases
Operating Leases | 3 Months Ended |
Oct. 31, 2023 | |
Operating Leases [Abstract] | |
OPERATING LEASES | NOTE 8 – OPERATING LEASES The Company leases offices space and a car under non-cancelable operating leases, with lease terms ranging between 14 months to 60 months. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Rent expense for the three months ended October 31, 2023 and 2022 was $125,679 and $120,692, respectively. Effective August 1, 2019, the Company adopted the new lease accounting standard using a modified retrospective transition method, which allows the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the package of practical expedients, which allows the Company to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities as disclosed below. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term. The following table presents the operating lease related assets and liabilities recorded on the balance sheets as of October 31, 2023 and July 31, 2023. October 31, July 31, (unaudited) Right-of- use assets, net $ 945,706 $ 1,058,822 Operating lease liabilities, current $ 375,278 $ 415,411 Operating lease liabilities, noncurrent 630,987 689,498 Total operating lease liabilities $ 1,006,265 $ 1,104,909 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of July 31, 2023 and 2022: October 31, July 31, (unaudited) Remaining lease term and discount rate Weighted average remaining lease term (years) 3.26 3.35 Weighted average discount rate 4.90 % 4.90 % The following is a schedule of maturities of lease liabilities as of October 31, 2023 and July 31, 2023: October 31, July 31, (unaudited) For the nine months/twelve months ended July 31, 2024 $ 346,412 $ 457,708 For the twelve months ended July 31, 2025 267,239 267,239 For the twelve months ended July 31, 2026 267,239 267,239 For the twelve months ended July 31, 2027 and thereafter 204,540 204,540 Total lease payments $ 1,085,430 $ 1,196,726 Less: imputed interest (79,165 ) (91,817 ) Present value of lease liabilities $ 1,006,265 $ 1,104,909 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Oct. 31, 2023 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 9 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: October 31, July 31, (unaudited) Accrued payroll expenses $ 308,620 $ 212,953 Rental deposit payable 66,000 66,000 Others 2,361 14,187 $ 376,981 $ 293,140 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Oct. 31, 2023 | |
Deferred Revenue [Abstract] | |
DEFERRED REVENUE | NOTE 10 – DEFERRED REVENUE As of October 31, 2023 and July 31, 2023, the balance of deferred revenue represented the Company’s contract liabilities, including payments received in advance of providing consulting services which will be recognized as revenue as the Company completed the performances. As of October 31, 2023 and July 31 2023, the Company had deferred revenues of $ nil For the three months ended October 31, 2023 and 2022, $nil and $20,785 of advance from customer balance as of July 31, 2023 and 2022 were recognized as revenues, respectively. For the three months ended October 31, 2023, $70,000 of advance from customer balance as of July 31, 2023 was recognized as other income. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Oct. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS 1) Nature of relationships with related parties The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions during the three months ended October 31, 2023 and 2022, or recorded balances as of October 31, 2023 and July 31, 2023: Name Relationship with the Company Huaya* Wholly owned by Mr. Pishan Chi, the former Chief Executive Officer of the Company Asia International Securities Exchange Co., Ltd. Wholly owned by Mr. Jun Liu, the Chief Executive Officer of the Company 2) Transactions with related parties For the three months ended October 31, 2023, the Company repaid loans of $17,710 to Asia International Securities Exchange Co., Ltd. The loans were interest free and was repayable on demand. For the three months ended October 31, 2022, the Company make a loan of $100,000 to Huaya to support its operations. The loan was interest free and was repayable on demand. For the three months ended October 31, 2023, the Company collected loans of $20,000 to Huaya. 3) Balances with related parties As of October 1, 2023 and July 31, 2023, the balances due from related parties were as follows: October 31, July 31, (unaudited) Accounts receivable*: Asia International Securities Exchange Co., Ltd. $ - $ 600,000 $ - $ 600,000 Other receivable*: Huaya $ 20,539 $ 40,539 $ 20,539 $ 40,539 * As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. (a) During the year ended July 31, 2023, the Company provided full provision of $762,000 against accounts receivable due from Huaya because the management assessed the collection was remote. As of October 1, 2023 and July 31, 2023, the balances due to related parties were as follows: October 31, July 31, (unaudited) Other payables: Asia International Securities Exchange Co., Ltd. $ 712,258 $ 729,968 $ 712,258 $ 729,968 |
Taxes
Taxes | 3 Months Ended |
Oct. 31, 2023 | |
Taxes [Abstract] | |
TAXES | NOTE 12 – TAXES The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled. British Virgin Islands Under the current laws of the British Virgin Islands, the Company and ATIF Investment are not subject to tax on income or capital gains in the British Virgin Islands. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed. USA For the US jurisdiction, ATIF Inc., ATIF BC, ATIF BM, and ATIF BD are subject to federal and state income taxes on its business operations. The federal tax rate is 21% and state tax rate is 8.84%. The Company also evaluated the impact from the recent tax reforms in the United States, including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Health and Economic Recovery Omnibus Emergency Solutions Act (“HERO Act”), which both were passed in 2020, no material impact on the Company is expected based on the analysis. The Company will continue to monitor the potential impact going forward. For the three months ended October 31, 2023 and 2022, the Company did not incur income tax expenses. The Company follows ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s deferred tax assets primarily derived from the net operating loss (“NOL”). For the three months ended October 31, 2023 and 2022, the Company suffered net operating losses due to limited number of customers for ATIF’s consulting service. The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion or all of the deferred tax assets will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes, and other relevant factors. As of October 31, 2023 and July 31, 2023, management believes that the realization of the deferred tax assets appears to be uncertain and may not be realizable in the near future. Therefore, a 100% valuation allowance has been provided against the deferred tax assets. Uncertain tax positions The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of October 31, 2023 and July 31, 2023 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. |
Contigencies
Contigencies | 3 Months Ended |
Oct. 31, 2023 | |
Contigencies [Abstract] | |
CONTIGENCIES | NOTE 13 – CONTIGENCIES From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Pending Legal Proceeding with Boustead Securities, LLC (“Boustead”) On May 14, 2020, Boustead filed a lawsuit against the Company and LGC for breaching the underwriting agreement Boustead had with each of the Company and LGC, in which Boustead was separately engaged as the exclusive financial advisor to provide financial advisory services to the Company and LGC. In April 2020, the Company acquired 51.2% equity interest in LGC after LGC terminated its efforts to launch an IPO on its own. Boustead alleged that the acquisition transaction between the Company and LGC was entered into during the tail period of the exclusive agreement between Boustead and the Company, and therefore deprived Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with the Company and LGC. Therefore, Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction it conducted with LGC. Boustead’s Complaint alleges four causes of action against the Company, including breach of contract; breach of the implied covenant of good faith and fair dealing; tortious interference with business relationships and quantum meruit. On October 6, 2020, ATIF filed a motion to dismiss Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On October 9, 2020, the United States District Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10, 2020. Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020. Boustead’s amended complaint asserts the same four causes of action against ATIF and LGC as its original complaint. The Company filed another motion to dismiss Boustead’s amended complaint on December 8, 2020. On August 25, 2021, the United States District Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first amended complaint. In its order and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes of action against ATIF as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion seeking leave to file a second amended complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s motion for leave and Boustead filed the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all other causes of action alleged in the original complaint. On January 18, 2022, the Company filed a motion to dismiss Boustead’s second amended complaint. Boustead filed its opposition on February 1, 2022 and the Company replied on February 8, 2022. On July 6, 2022, the Court denied our motion to dismiss the second amended complaint. Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s claims in California. Briefing on the Company’s motion to compel concluded on August 23, 2022. Since the agreement between ATIF and Boustead contains a valid arbitration clause that applies to Boustead’s breach of contract claim, and the parties have not engaged in discovery, on February 14, 2023, the Court ordered that ATIF’s motion to compel arbitration is granted and this case is stayed pending arbitration. On March 10, 2023, Boustead, filed Demand for Arbitration against ATIF (the Respondent) before JAMS in California and the assigned JAMS case Ref. No. is 5220002783. On May 25, 2023, ATIF filed its answer to deny Boustead’s Demand for Arbitration, which was unsuccessful and the arbitration process was initiated. The arbitrator ordered a motion to be filed by Boustead for a determination of contact interpretation, prior to extensive discovery into issues such as the alleged merits and damages, and to determine whether the contract interpretation should allow the matter to further proceed. Boustead had filed the Motion for Contract Interpretation Determination. ATIF filed its opposition to that Motion on October 16, 2023. The hearing on the motion was held on November 8, 2023, during which the arbitrator extended the hearing to February 29, 2024. The arbitrator also established December 15, 2023, as the deadline for Boustead to submit its reply regarding the contract interpretation issues raised by the Company. Simultaneously, the Company was granted until February 12, 2024, to present its response brief. Our management believes it is premature to assess and predict the outcome of this pending arbitration . |
Subsequent Event
Subsequent Event | 3 Months Ended |
Oct. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 14 – SUBSEQUENT EVENT On December 4, 2023, the Company, together with ATIF Inc., ATIF-1 GP, LLC, Jun Liu and Zhiliang, received a correspondence from Morgan, Lewis & Bockius LLP on behalf of its client J.P Morgan Securities LLC (“JPMS”). The correspondence concerns a potential lawsuit against each of the aforementioned entities and individuals with respect to JPMS’s assertion that it is entitled to recover $5,064,160 in damages plus interest and attorneys’ fees relating to a stock transaction by ATIF-1 GP, LLC. The management assessed the Company would not be liable for the claim because it sold ATIF-1 GP, LLC in August 2022. As of the date of this report, JPMS has not commenced an action against the parties. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Oct. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited condensed consolidated balance sheets as of October 31, 2023 and for the unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended October 31, 2023 and 2022 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended July 31, 2023, which was filed with the SEC on November 13, 2023. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended July 31, 2023. The results of operations for the three months ended October 31, 2023 and 2022 are not necessarily indicative of the results for the full years. The unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for credit losses, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, revenue recognition, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could differ from those estimates. |
Accounts Receivable, net | Accounts Receivable, net On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of the guidance had no impact on the allowance for credit losses for accounts receivable. Prior to the Company’s adoption of ASU 2016-13, accounts receivable are presented net of allowance for doubtful accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the unaudited condensed consolidated statements of operations and comprehensive loss. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. After the adoption of ASU 2016-13, The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company uses loss-rate methods to estimate allowance for credit loss. The Company assesses collectability by reviewing accounts receivable on an individual basis because the Company had limited customers and each of them has difference characteristics, primarily based on business line and geographical area. In determining the amount of the allowance for credit losses, the Company multiplied the loss rate with the amortized cost of accounts receivable. The loss rate refers to the corporate default rate published by credit rating companies, which considers current economic conditions, reasonable and supportable forecasts of future economic conditions. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 – inputs to the valuation methodology are unobservable. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”). To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. For the three months ended October 31, 2023 and 2022, the Company primarily generated revenues from consulting services to customers who would like to go public. The Company provides various consulting services to its members, especially to those who have the intention to be publicly listed in the stock exchanges in the United States and other countries. The Company categorizes its consulting services into three Phases: Phase I consulting services primarily include due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and recommendations. Management estimates that Phase I normally takes about three months to complete based on its past experience. Phase II consulting services primarily include reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s recommendation. Management estimates that Phase II normally takes about eight months to complete based on its past experience. Phase III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction; assistance in preparation of customers’ public filings for IPO or reverse merger transactions; and assistance in answering comments and questions received from regulatory agencies. Management believes it is very difficult to estimate the timing of this phase of service as the completion of Phase III services is not within the Company’s control. Each phase of consulting services is stand-alone and fees associated with each phase are clearly identified in service agreements. Revenue from providing Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase as the Company’s performance obligations related to these services are carried out over the whole duration of each Phase. Revenue from providing Phase III consulting services to customers is recognized upon completion of the reverse merger transaction or IPO transaction when the Company’s promised services are rendered and the Company’s performance obligations are satisfied. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the balance sheet. Depending on the complexity of the underlying service arrangement and related terms and conditions, significant judgments, assumptions, and estimates may be required to determine when substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions, and estimates regarding contracts executed in any specific period. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of October 31, 2023. As of October 31, 2023, all of the Company’s income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination by relevant tax authorities. |
Segment reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is Mr. Liu, the Chairman of the Board of Directors and CEO. The Company’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the management has determined that the Company now operates in one operating segment with one reporting segment as of October 31, 2023 and July 31, 2023, which is the consulting service business. |
Risks and Uncertainty | Risks and Uncertainty (a) Credit risk As of October 31, 2023, the Company held cash and cash equivalents of approximately $0.4 million deposited in the banks located in the U.S., which were insured by FDIC up to $250,000, and held cash and cash equivalents of $21,011 deposited in the investment bank accounts located in the U.S. which are not insured by FDIC. (b) Concentration risk Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its revenues and receivables with specific customers. For the three months ended October 31, 2023, three customers accounted for 48%, 40% and 12% of the Company’s consolidated revenue, respectively. For the three months ended October 31, 2022, one customer accounted for 100% of the Company’s consolidated revenue. As of October 31, 2023, two customers accounted for 56% and 44% of the Company’s consolidated accounts receivable, respectively. As of July 31, 2023, two customers accounted for 54% and 46% of the Company’s consolidated accounts receivable, respectively. For the three months ended October 31, 2023 and 2022, substantially all of the Company’s revenues was generated from providing going public related consulting services to customers. The concentration risk is mitigated by the Company’s plan to transition its consulting services from the PRC based customers to more international customers. (c) Other risks and uncertainties The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. |
Organization and Description _2
Organization and Description of Business (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Organization and Description of Business [Abstract] | |
Schedule of Consolidated Financial Statements Reflect the Operating Results | As of October 31, 2023, the Company’s unaudited condensed consolidated financial statements reflect the operating results of the following entities: Name of Entity Date of Place of % of Principal Activities Parent company: ATIF Holdings Limited (“ATIF”) January 5, 2015 British Virgin Islands Parent Investment holding Wholly owned subsidiaries of ATIF ATIF Inc. (“ATIF USA”) October 26, 2020 USA 100% Consultancy and information technology support ATIF Investment Limited (“ATIF Investment”) April 25, 2022 BVI 100% Consultancy and information technology support ATIF BD December 22, 2021 USA 100% owned by ATIF USA Consultancy and information technology support ATIF BC October 6, 2022 USA 100% owned by ATIF USA Consultancy and information technology support ATIF BM October 6, 2022 USA 100% owned by ATIF USA Consultancy and information technology support |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: October 31, July 31, (unaudited) Prepayment for advertising service fee (a) $ 336,000 $ 408,000 Advance to vendors - 10,000 Others 36,540 11,570 Total $ 372,540 $ 429,570 (a) Prepayment for advertising services represent the advance payments made by the Company to a third party advertising company for producing advertising contents. These prepayments are typically expensed over the period when the services are performed. |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property and Equipment Net | Property and equipment, net consisted of the following: October 31, July 31, (unaudited) Furniture, fixtures and equipment $ 208,536 $ 204,204 Less: accumulated depreciation (120,236 ) (110,567 ) Property and equipment, net $ 88,300 $ 93,637 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Intangible Assets [Abstract] | |
Schedule of Intangible Assets | Net intangible assets consisted of the following: October 31, July 31, (unaudited) Software $ 320,000 $ 320,000 Less: accumulated amortization (266,669 ) (246,669 ) Intangible assets $ 53,331 $ 73,331 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Operating Leases [Abstract] | |
Schedule of Operating Lease Related Assets and Liabilities Recorded on the Balance Sheets | The following table presents the operating lease related assets and liabilities recorded on the balance sheets as of October 31, 2023 and July 31, 2023. October 31, July 31, (unaudited) Right-of- use assets, net $ 945,706 $ 1,058,822 Operating lease liabilities, current $ 375,278 $ 415,411 Operating lease liabilities, noncurrent 630,987 689,498 Total operating lease liabilities $ 1,006,265 $ 1,104,909 |
Schedule of Weighted Average Remaining Lease Terms and Discount Rates | The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of July 31, 2023 and 2022: October 31, July 31, (unaudited) Remaining lease term and discount rate Weighted average remaining lease term (years) 3.26 3.35 Weighted average discount rate 4.90 % 4.90 % |
Schedule of Maturities of Lease Liabilities | The following is a schedule of maturities of lease liabilities as of October 31, 2023 and July 31, 2023: October 31, July 31, (unaudited) For the nine months/twelve months ended July 31, 2024 $ 346,412 $ 457,708 For the twelve months ended July 31, 2025 267,239 267,239 For the twelve months ended July 31, 2026 267,239 267,239 For the twelve months ended July 31, 2027 and thereafter 204,540 204,540 Total lease payments $ 1,085,430 $ 1,196,726 Less: imputed interest (79,165 ) (91,817 ) Present value of lease liabilities $ 1,006,265 $ 1,104,909 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: October 31, July 31, (unaudited) Accrued payroll expenses $ 308,620 $ 212,953 Rental deposit payable 66,000 66,000 Others 2,361 14,187 $ 376,981 $ 293,140 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Nature of Relationships with Related Parties | The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions during the three months ended October 31, 2023 and 2022, or recorded balances as of October 31, 2023 and July 31, 2023: Name Relationship with the Company Huaya* Wholly owned by Mr. Pishan Chi, the former Chief Executive Officer of the Company Asia International Securities Exchange Co., Ltd. Wholly owned by Mr. Jun Liu, the Chief Executive Officer of the Company * As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. |
Schedule of Transactions with Related Parties | As of October 1, 2023 and July 31, 2023, the balances due from related parties were as follows: October 31, July 31, (unaudited) Accounts receivable*: Asia International Securities Exchange Co., Ltd. $ - $ 600,000 $ - $ 600,000 Other receivable*: Huaya $ 20,539 $ 40,539 $ 20,539 $ 40,539 * As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. October 31, July 31, (unaudited) Other payables: Asia International Securities Exchange Co., Ltd. $ 712,258 $ 729,968 $ 712,258 $ 729,968 |
Organization and Description _3
Organization and Description of Business (Details) | Aug. 01, 2022 USD ($) |
Organization and Description of Business [Line Items] | |
Equity interest cost | $ 50,000 |
Organization and Description _4
Organization and Description of Business (Details) - Schedule of Consolidated Financial Statements Reflect the Operating Results | 3 Months Ended |
Oct. 31, 2023 | |
ATIF Holdings Limited (“ATIF”) [Member] | |
Parent company: | |
Date of Incorporation | Jan. 05, 2015 |
Place of Incorporation | British Virgin Islands |
% of Ownership | Parent |
Principal Activities | Investment holding |
ATIF Inc. (“ATIF USA”) [Member] | |
Parent company: | |
Date of Incorporation | Oct. 26, 2020 |
Place of Incorporation | USA |
% of Ownership | 100% |
Principal Activities | Consultancy and information technology support |
ATIF Investment LLC (“ATIF Investment”) [Member] | |
Parent company: | |
Date of Incorporation | Apr. 25, 2022 |
Place of Incorporation | BVI |
% of Ownership | 100% |
Principal Activities | Consultancy and information technology support |
ATIF BD [Member] | |
Parent company: | |
Date of Incorporation | Dec. 22, 2021 |
Place of Incorporation | USA |
% of Ownership | 100% owned by ATIF USA |
Principal Activities | Consultancy and information technology support |
ATIF BC [Member] | |
Parent company: | |
Date of Incorporation | Oct. 06, 2022 |
Place of Incorporation | USA |
% of Ownership | 100% owned by ATIF USA |
Principal Activities | Consultancy and information technology support |
ATIF BM [Member] | |
Parent company: | |
Date of Incorporation | Oct. 06, 2022 |
Place of Incorporation | USA |
% of Ownership | 100% owned by ATIF USA |
Principal Activities | Consultancy and information technology support |
Liquidity and Going Concern (De
Liquidity and Going Concern (Details) - USD ($) | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Liquidity and Going Concern [Line Items] | |||
Net loss | $ (625,463) | $ (112,515) | |
Operating cash outflows | 195,353 | $ 363,709 | |
Cash | 400,000 | ||
Accounts receivables | 700,000 | ||
Current liabilities | 1,495,717 | $ 1,539,719 | |
Related Party [Member] | |||
Liquidity and Going Concern [Line Items] | |||
Due to related parties | $ 700,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) | 3 Months Ended | ||
Jul. 31, 2023 USD ($) | Oct. 31, 2023 USD ($) | Oct. 31, 2022 | |
Summary of Significant Accounting Policies [Line Items] | |||
Tax benefit percentage | 50% | ||
Cash and cash equivalents deposited in the banks (in Dollars) | $ 606,022 | $ 361,225 | |
FDIC insured amount (in Dollars) | 250,000 | ||
Cash and cash equivalents deposited in the investment bank accounts (in Dollars) | $ 21,011 | ||
Number of customers | 2 | 2 | 1 |
Total revenue percentage | 100% | ||
Customer One [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Number of customers | 3 | ||
Total revenue percentage | 48% | ||
Accounts receivable percentage | 56% | ||
Revenue percentage | 54% | ||
Customer Two [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Total revenue percentage | 40% | ||
Accounts receivable percentage | 44% | ||
Revenue percentage | 46% | ||
Customer Three [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Total revenue percentage | 12% |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - Schedule of Prepaid Expenses and Other Current Assets - USD ($) | Oct. 31, 2023 | Jul. 31, 2022 | |
Schedule of Prepaid Expenses and Other Current Assets [Abstract] | |||
Prepayment for advertising service fee | [1] | $ 336,000 | $ 408,000 |
Advance to vendors | 10,000 | ||
Others | 36,540 | 11,570 | |
Total | $ 372,540 | $ 429,570 | |
[1]Prepayment for advertising services represent the advance payments made by the Company to a third party advertising company for producing advertising contents. These prepayments are typically expensed over the period when the services are performed. |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 9,669 | $ 16,656 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details) - Schedule of Property and Equipment Net - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Property and Equipment Net [Line Items] | ||
Furniture, fixtures and equipment | $ 208,536 | $ 204,204 |
Less: accumulated depreciation | (120,236) | (110,567) |
Property and equipment, net | $ 88,300 | $ 93,637 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Intangible Assets [Abstract] | ||
Amortization expense | $ 20,000 | $ 20,000 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (266,669) | $ (246,669) |
Intangible assets, net | 53,331 | 73,331 |
Software [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 320,000 | $ 320,000 |
Investments in Trading Securi_2
Investments in Trading Securities (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Investments in Trading Securities [Abstract] | ||
Decrease in fair value | $ 109,403 | $ 20,004 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Operating Lease [Line Items] | ||
Rent expense | $ 125,679 | $ 120,692 |
Minimum [Member] | ||
Operating Lease [Line Items] | ||
Operating lease term | 14 months | |
Maximum [Member] | ||
Operating Lease [Line Items] | ||
Operating lease term | 60 months |
Operating Leases (Details) - Sc
Operating Leases (Details) - Schedule of Operating Lease Related Assets and Liabilities Recorded on the Balance Sheets - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Operating Lease Related Assets and Liabilities Recorded on the Balance Sheets [Abstract] | ||
Right-of- use assets, net | $ 945,706 | $ 1,058,822 |
Operating lease liabilities, current | 375,278 | 415,411 |
Operating lease liabilities, noncurrent | 630,987 | 689,498 |
Total operating lease liabilities | $ 1,006,265 | $ 1,104,909 |
Operating Leases (Details) - _2
Operating Leases (Details) - Schedule of Weighted Average Remaining Lease Terms and Discount Rates | Oct. 31, 2023 | Jul. 31, 2023 |
Remaining lease term and discount rate | ||
Weighted average remaining lease term (years) | 3 years 3 months 3 days | 3 years 4 months 6 days |
Weighted average discount rate | 4.90% | 4.90% |
Operating Leases (Details) - _3
Operating Leases (Details) - Schedule of Maturities of Lease Liabilities - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Maturities of Lease Liabilities [Abstract] | ||
2024 | $ 346,412 | $ 457,708 |
2025 | 267,239 | 267,239 |
2026 | 267,239 | 267,239 |
2027 and thereafter | 204,540 | 204,540 |
Total lease payments | 1,085,430 | 1,196,726 |
Less: imputed interest | (79,165) | (91,817) |
Present value of lease liabilities | $ 1,006,265 | $ 1,104,909 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued Expenses and Other Current Liabilities - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Accrued Expenses and Other Current Liabilities [Abstract] | ||
Accrued payroll expenses | $ 308,620 | $ 212,953 |
Rental deposit payable | 66,000 | 66,000 |
Others | 2,361 | 14,187 |
Total | $ 376,981 | $ 293,140 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Deferred Revenue [Abstract] | |||
Deferred revenues | $ 70,000 | ||
Advance from customer | $ (70,000) | $ (20,785) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Related Party [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Provision against accounts receivable | $ 762,000 | ||
Asia International Securities Exchange Co., Ltd. [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Loans | $ 17,710 | ||
Huaya [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Loans | $ 20,000 | $ 100,000 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of Nature of Relationships with Related Parties | 3 Months Ended | |
Oct. 31, 2023 | ||
Huaya [Member] | ||
Schedule of Nature of Relationships with Related Parties [Line Items] | ||
Relationship with the company transaction | Wholly owned by Mr. Pishan Chi, the former Chief Executive Officer of the Company | [1] |
Asia International Securities Exchange Co., Ltd. [Member] | ||
Schedule of Nature of Relationships with Related Parties [Line Items] | ||
Relationship with the company transaction | Wholly owned by Mr. Jun Liu, the Chief Executive Officer of the Company | |
[1] As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of Transactions with Related Parties - Related Party [Member] - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Accounts receivable | [1] | $ 600,000 | |
Other receivable | [1] | 20,539 | 40,539 |
Other payables | 712,258 | 729,968 | |
Asia International Securities Exchange Co., Ltd. [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts receivable | [1] | 600,000 | |
Other payables | 712,258 | 729,968 | |
Huaya [Member] | |||
Related Party Transaction [Line Items] | |||
Other receivable | [1] | $ 20,539 | $ 40,539 |
[1] As of July 31, 2023, the balance due from related parties were repayable on demand. The Company expected to collect the outstanding receivables from related parties before July 31, 2024. |
Taxes (Details)
Taxes (Details) | 3 Months Ended |
Oct. 31, 2023 | |
Taxes [Line Items] | |
Percentage of valuation allowance provided | 100% |
Tax benefit percentage | 50% |
USA [Member] | |
Taxes [Line Items] | |
Statutory income tax rate | 21% |
Maximum [Member] | |
Taxes [Line Items] | |
State tax rate | 8.84% |
Contigencies (Details)
Contigencies (Details) | Apr. 30, 2020 |
Business Combination [Member] | LGC [Member] | |
Contigencies [Line Items] | |
Equity interest acquired | 51.20% |
Subsequent Event (Details)
Subsequent Event (Details) | Dec. 04, 2023 USD ($) |
Subsequent Event [Member] | |
Subsequent Event (Details) [Line Items] | |
Interest | $ 5,064,160 |