What changed in this filing

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Item 9A. Controls and Procedures

2023-11-13 compared with 2022-11-02 · 1471 added, 1796 removed, 442 unchanged (88% of the section changed)

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Controls and Procedures

Under the supervision and with the participation

2 unchanged sentences

Based on that evaluation, our management has concluded that, as of July 31, 2023, our disclosure controls and procedures were not

effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish under the Exchange

Act was recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms, and

that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated

effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish under the Exchange Act

was recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms, and that

the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated

to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding

required disclosure.

Our conclusion is based on the fact that we do not have sufficient full-time accounting and financial reporting

personnel with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions, to address complex

Our conclusion is based on the fact that we do not have sufficient full-time accounting and financial reporting personnel

with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions, to address complex U.S.

GAAP accounting issues and the related disclosures under U.S.

In addition, there was a lack of sufficient documented financial

closing procedure and a lack of risk assessment in accordance with COSCO 2013 framework.

Our management is currently in the process of

evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring more qualified accounting personnel with relevant

GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and

system control framework, and (ii) implementing regular and continuous U.S.

GAAP accounting and financial reporting training programs

for our accounting and financial reporting personnel, and (iii) establishing an internal audit function and standardizing the Company’s

semi-annual and year-end closing and financial reporting processes.

In addition, there was a lack of sufficient documented financial closing

procedure and a lack of risk assessment in accordance with COSCO 2013 framework.

Our management is currently in the process of evaluating

the steps necessary to remediate the ineffectiveness, such as (i) hiring more qualified accounting personnel with relevant U.S.

and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control

framework, and (ii) implementing regular and continuous U.S.

GAAP accounting and financial reporting training programs for our accounting

and financial reporting personnel, and (iii) establishing an internal audit function and standardizing the Company’s semi-annual

and year-end closing and financial reporting processes.

Management’s Annual Report on Internal Control over Financial

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the Exchange Act.

In assessing our internal control over financial reporting, prior to the offering in April 2019, we have been

a private company with limited accounting personnel and other resources to address our internal controls and procedures.

In assessing our internal control over financial reporting, prior to the offering in April 2019, we have been a

private company with limited accounting personnel and other resources to address our internal controls and procedures.

Our independent

3 unchanged sentences

in our internal control over financial reporting.

We did not have sufficient

personnel with appropriate levels of accounting knowledge and experience to address complex U.S.

GAAP accounting issues and to prepare

and review financial statements and related disclosures under U.S.

Specifically, our control did not operate effectively to

ensure the appropriate and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement

We have not established

an internal control department and had a lack of adequate policies and procedures in internal audit function to ensure that our policies

and procedures have been carried out as planned;

We have not established

sufficient risk assessment in accordance with the requirement of COSCO 2013 Framework;

We did not have sufficient

documented financial closing policies and procedures.

We did not have sufficient personnel with appropriate levels of accounting knowledge and experience to address complex U.S.

GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S.

Specifically, our control did not operate effectively to ensure the appropriate and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement accounts;

We have not established an internal control department and had a lack of adequate policies and procedures in internal audit function to ensure that our policies and procedures have been carried out as planned;

We have not established sufficient risk assessment in accordance with the requirement of COSCO 2013 Framework;

We did not have sufficient documented financial closing policies and procedures.

A material weakness is a deficiency, or a combination

8 unchanged sentences

a number of measures to address the first to third material weakness that has been identified, including:

hiring more qualified accounting

personnel with relevant U.S.

GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function

and to set up a financial and system control framework;

implementing regular and

continuous U.S.

hiring more qualified accounting personnel with relevant U.S.

GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework;

implementing regular and continuous U.S.

GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel.

1 unchanged sentence

set up a series of standard and recurring internal audit work procedures before July 2023.

schedule to will perform self-assessment of internal control effectiveness on a continuous basis, which will be led by our accounting

and risk management department within year 2023.

We will also hire more competent personnel and involve professional service companies

to help us implement SOX 404 compliance together with the establishment of our internal audit function.

We schedule to will perform self-assessment

of internal control effectiveness on a continuous basis, which will be led by our accounting and risk management department within year

We will also hire more competent personnel and involve professional service companies to help us implement SOX 404 compliance together

with the establishment of our internal audit function.

However, we cannot assure you that we will remediate

6 unchanged sentences

Changes in Internal Control over Financial

as disclosed above, there have been no changes in our internal controls over financial reporting that occurred during fiscal quarter

ended July 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial

Except as disclosed above, there have been no

changes in our internal controls over financial reporting that occurred during fiscal quarter ended July 31, 2023 that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

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CORPORATE GOVERNANCE

Executive Officers and Significant Employees

Directors, Executive Officers and Significant Employees

The following table and text

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Business Experience

Jun Liu has been

our director since June 2019, our President and Chairman since July 2020 and our Chief Executive Officer since August 2021,

also having previously served as our Chief Executive Officer from June 2019 to July 2020.

Jun Liu has been our director since June 2019,

our President and Chairman since July 2020 and our Chief Executive Officer since August 2021, also having previously served as our

Chief Executive Officer from June 2019 to July 2020.

Since November 2015, Mr.

Liu has served

as the President and Director of Asian Equity Exchange Group Co., Ltd., a subsidiary of a U.S.

public company Asia Equity Exchange

(“AEEX”), a corporation that develops and manufactures software solutions for equity market.

served as the Chairman of the Board of Directors, President, and CEO of AEEX from July 2015 to September 2017.

From December

2000 to December 2001, he served as the head of marketing for the South China Branch of Alibaba.

Liu has served as the President and Director of Asian

Equity Exchange Group Co., Ltd., a subsidiary of a U.S.

public company Asia Equity Exchange Group, Inc.

a corporation that develops and manufactures software solutions for equity market.

Liu served as the Chairman of the Board of

Directors, President, and CEO of AEEX from July 2015 to September 2017.

From December 2000 to December 2001, he served as the

head of marketing for the South China Branch of Alibaba.

Liu received his Ph.D.

in International

Finance from Camden University U.S.A.

in 2015 and his bachelor’s degree in Applied Physics from the Harbin Institute of Technology

Liu has over 20 years of enterprise management experience and served in management positions at Fortune 500 companies.

Liu is well qualified to serve on our board of directors based on his management experience and prior executive experience serving in

public and private companies.

Yue Ming has been

our Chief Financial Officer (“CFO”) and director since August 2021.

in International Finance from Camden University

in 2015 and his bachelor’s degree in Applied Physics from the Harbin Institute of Technology in 1998.

Liu has over 20

years of enterprise management experience and served in management positions at Fortune 500 companies.

Liu is well qualified to serve

on our board of directors based on his management experience and prior executive experience serving in public and private companies.

Yue Ming has been our Chief Financial

Officer (“CFO”) and director since August 2021.

She has served as our accountant since August 1, 2018.

Prior to joining the Company, she was employed by Asia Equity Exchange Group, Inc.

and acted as financial manager from December 1, 2014

to July 31, 2018.

Ming started her accounting career at Shenzhen Huitian Accounting Firm on July 1, 2009 after she graduated from

Central China Normal University where she majored in international trade.

Ming has more than 10 years of corporate finance and accounting

Based on the above and Ms.

Prior to joining the

Company, she was employed by Asia Equity Exchange Group, Inc.

and acted as financial manager from December 1, 2014 to July 31, 2018.

Ming started her accounting career at Shenzhen Huitian Accounting Firm on July 1, 2009 after she graduated from Central China Normal University

where she majored in international trade.

Ming has more than 10 years of corporate finance and accounting experience.

above and Ms.

Ming’s experience in finance and accounting, we believe that Ms.

Ming is well qualified

to serve on our board of directors.

Kwong Sang Liu has

served as our independent director since April 2019.

Ming is well qualified to serve on our board of directors.

Kwong Sang Liu has served as our independent

director since April 2019.

Since May 1997, Mr.

Liu has managed K.S.

Liu & Company,

CPA Limited, a company he founded.

Liu & Company, CPA Limited, a company he founded.

He is currently a non-executive director in a number of Hong Kong Stock Exchange listed companies.

Liu graduated with honors from the Hong Kong Polytechnic University with a bachelor’s degree in Accountancy in 1997 and

obtained a Master of Business Administration degree from the University of Lincoln, England in 2002.

He is a chartered tax advisor of

the Institute of Chartered Accountants in England and Wales, the Association of Chartered Certified Accountants, the Institute of Financial

Accountants of the United Kingdom, the Institute of Public Accountants of Australia, the Institute of Certified Public Accountants of

Hong Kong, the Taxation Institute of Hong Kong, and the Society of Registered Financial Planners.

Liu has been a practicing accountant

in Hong Kong for over 20 years specializing in audit, taxation and corporate financial advisory.

Based on the above qualifications and

Liu’s experience in finance and accountancy, the Company believes Mr.

Liu graduated with honors

from the Hong Kong Polytechnic University with a bachelor’s degree in Accountancy in 1997 and obtained a Master of Business Administration

degree from the University of Lincoln, England in 2002.

He is a chartered tax advisor of the Institute of Chartered Accountants in England

and Wales, the Association of Chartered Certified Accountants, the Institute of Financial Accountants of the United Kingdom, the Institute

of Public Accountants of Australia, the Institute of Certified Public Accountants of Hong Kong, the Taxation Institute of Hong Kong, and

the Society of Registered Financial Planners.

Liu has been a practicing accountant in Hong Kong for over 20 years specializing in

audit, taxation and corporate financial advisory.

Based on the above qualifications and Mr.

Liu’s experience in finance and accountancy,

the Company believes Mr.

Liu is qualified to be on the Board.

Yongyuan Chen has

served as our independent director since April 2019.

Yongyuan Chen has served as our independent

director since April 2019.

He is currently the director of China Commercial Law Co.

Australia Pty Limited

specializing in foreign investment, merger, and acquisition and intellectual property laws.

He received a bachelor’s degree in

international law from Jilin University of China in 1986, a Master’s degree in international economic law from Renmin University

of China in 1988, and a Doctor’s degree in law from the University of Sydney in 2002.

He formerly served as legal counsel of the

Ministry of Foreign Economic Relations and Trade, China National Technology Import and Export Corporation, and chief of the Policy and

Regulation Division of Shenzhen Science and Technology Bureau.

Australia Pty Limited specializing in foreign

investment, merger, and acquisition and intellectual property laws.

He received a bachelor’s degree in international law from Jilin

University of China in 1986, a Master’s degree in international economic law from Renmin University of China in 1988, and a Doctor’s

degree in law from the University of Sydney in 2002.

He formerly served as legal counsel of the Ministry of Foreign Economic Relations

and Trade, China National Technology Import and Export Corporation, and chief of the Policy and Regulation Division of Shenzhen Science

and Technology Bureau.

From April 2011, Mr.

Chen has worked as senior partner at Guangdong

Huashang Law Firm, Sydney Branch.

Chen has worked as senior partner at Guangdong Huashang Law Firm, Sydney Branch.

Chen has been a practicing lawyer in China and Australia for over 20 years.

The Board believes

Chen’s extensive experience and legal background qualifies him to serve on the Board.

Lei Yang has served

as our independent director since August 2021.

She received her first master’s degree in Information Management from Nanjing University

in 2004, and her second master’s degree in Accounting from Bentley University in 2010.

Yang is certified by the American Institute

of Certified Public Accountants.

Yang has 17 years working experience in several Fortune 500 companies, engaged in business analysis,

internal audit, and financial management, etc.

She received her first master’s degree in Information Management from Nanjing University

in 2004, and her second master’s degree in Accounting from Bentley University in 2010.

The Board believes that Mr.

Chen’s extensive experience

and legal background qualifies him to serve on the Board.

Lei Yang has served as our independent

director since August 2021.

She received her first master’s degree in Information Management from Nanjing University in 2004, and

her second master’s degree in Accounting from Bentley University in 2010.

Yang is certified by the American Institute of Certified

Public Accountants.

Yang has 17 years working experience in several Fortune 500 companies, engaged in business analysis, internal

audit, and financial management, etc.

She received her first master’s degree in Information Management from Nanjing University in

2004, and her second master’s degree in Accounting from Bentley University in 2010.

Yang is an American Institute of Certified

4 unchanged sentences

Involvement in Certain Legal Proceedings

To the best of our knowledge,

during the past ten years, none of our directors or executive officers were involved in any of the following:

(1) any bankruptcy petition

filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy

or within two years prior to that time;

(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding

(excluding traffic violations and other minor offenses);

(3) being subject to any order, judgment, or decree, not subsequently reversed,

suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise

limiting his involvement in any type of business, securities or banking activities;

and (4) being found by a court of competent jurisdiction

(in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities

law, and the judgment has not been reversed, suspended or vacated.

Family Relationships

and Arrangements

None of the directors or

executive officers have a family relationship as defined in Item 401 of Regulation S-K.

To the best of our knowledge, during the past

ten years, none of our directors or executive officers were involved in any of the following:

(1) any bankruptcy petition filed by or

against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two

years prior to that time;

(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic

violations and other minor offenses);

(3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,

of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement

in any type of business, securities or banking activities;

and (4) being found by a court of competent jurisdiction (in a civil action),

the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment

has not been reversed, suspended or vacated.

Family Relationships and Arrangements

None of the directors or executive officers have

a family relationship as defined in Item 401 of Regulation S-K.

Code of Business Conduct and Ethics for

Employees, Executive Officers, and Directors

We adopted a code of business

conduct and ethics (the “Code of Conduct”) on December 11, 2018, which is applicable to all of our employees, executive officers

and directors.

We adopted a code of business conduct and ethics

(the “Code of Conduct”) on December 11, 2018, which is applicable to all of our employees, executive officers and directors.

The Code of Conduct is available at the Investors Relations section of our website at https://ir.atifchina.com/.

contained on or accessible through this website is not a part of this Annual Report, and the inclusion of such website address in this

Annual Report is an inactive textual reference only.

Any amendments to the Code of Conduct, or any waivers of its requirements, are expected

to be disclosed on its website to the extent required by applicable rules and exchange requirements.

Information contained

on or accessible through this website is not a part of this Annual Report, and the inclusion of such website address in this Annual Report

is an inactive textual reference only.

Any amendments to the Code of Conduct, or any waivers of its requirements, are expected to be

disclosed on its website to the extent required by applicable rules and exchange requirements.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and directors and persons who own

more than 10% of a registered class of our equity securities, to file with the SEC initial statements of beneficial ownership, reports

of changes in ownership and Annual Reports concerning their ownership, of Common Stock and other of our equity securities on Forms 3,

4, and 5, respectively.

Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us

with copies of all Section 16(a) reports they file.

For the fiscal year ended July 31, 2022, our executive officers and directors and

persons who own more than 10% of a registered class of our equity securities were not subject to Section 16 of the Exchange Act.

Pursuant to our amended and

restated articles of association, the minimum number of directors shall consist of not less than one person unless otherwise determined

by resolution of directors or resolution or shareholders and by filing an amended version of the articles of association at the BVI Registry

of Corporate affairs approving such change.

Unless removed or re-appointed, each director shall be appointed for a term fixed by the

resolution of members or resolution of directors appointing the director.

16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and directors

and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial statements of beneficial

ownership, reports of changes in ownership and Annual Reports concerning their ownership, of Ordinary shares and other of our equity securities

on Forms 3, 4, and 5, respectively.

To our knowledge, based solely on review of the copies of such reports furnished to us and written

representations that no other reports were required, all Section 16(a) filing requirements applicable to officers, directors and greater

than ten percent shareholders were complied with during the fiscal year ended July 31, 2023.

Board Practices

Pursuant to our amended and restated articles

of association, the minimum number of directors shall consist of not less than one person unless otherwise determined by resolution of

directors or resolution or shareholders and by filing an amended version of the articles of association at the BVI Registry of Corporate

affairs approving such change.

Unless removed or re-appointed, each director shall be appointed for a term fixed by the resolution of

members or resolution of directors appointing the director.

Controlled Company

Jun Liu beneficially

owns approximately 54.7% of the aggregate voting power of our outstanding ordinary shares.

As a result, we are deemed a “controlled

company” for the purpose of the Nasdaq listing rules and are permitted to elect to rely on certain exemptions from the obligations

to comply with certain corporate governance requirements, including:

the requirement that our

director nominees be selected or recommended solely by independent directors;

the requirement that we

have a nominating and corporate governance committee and a compensation committee that are composed entirely of independent directors

with a written charter addressing the purposes and responsibilities of the committees.

Although we do not intend

to rely on the controlled company exemptions under the Nasdaq listing rules even though we are deemed a controlled company, we could

elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies

that are subject to all of the corporate governance requirements of Nasdaq.

Jun Liu beneficially owns approximately 54.7%

of the aggregate voting power of our outstanding ordinary shares.

As a result, we are deemed a “controlled company” for the

purpose of the Nasdaq listing rules and are permitted to elect to rely on certain exemptions from the obligations to comply with

certain corporate governance requirements, including:

the requirement that our director nominees be selected or recommended solely by independent directors;

the requirement that we have a nominating and corporate governance committee and a compensation committee that are composed entirely of independent directors with a written charter addressing the purposes and responsibilities of the committees.

Although we do not intend to rely on the controlled

company exemptions under the Nasdaq listing rules even though we are deemed a controlled company, we could elect to rely on these

exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to

all of the corporate governance requirements of Nasdaq.

Board of Directors

Our board of directors consist

of five directors as of the date of this annual report.

Our board of directors is responsible for establishing broad corporate policies

and for overseeing our overall performance.

Our board of directors reviews significant developments affecting us and acts on other matters

requiring its approval.

Our board of directors consist of five directors

as of the date of this annual report.

Our board of directors is responsible for establishing broad corporate policies and for overseeing

our overall performance.

Our board of directors reviews significant developments affecting us and acts on other matters requiring its

Duties of Directors

Under British Virgin Islands

law, our directors owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith

and with a view to our best interests.

When exercising powers or performing duties as a director, our directors also have a duty to exercise

the care, diligence and skills that a reasonable director would exercise in comparable circumstances, taking into account without limitation

the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken

In exercising the powers of a director, the directors must exercise their powers for a proper purpose and shall not act or agree

to the company acting in a manner that contravenes our amended and restated memorandum and articles of association or the BVI Act.

fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association.

We have the right to seek damages if a duty owed by our directors is breached.

The functions and powers

of our board of directors include, among others:

appointing officers and

determining the term of office of the officers;

authorizing the payment

of donations to religious, charitable, public or other bodies, clubs, funds, or associations as deemed advisable;

exercising the borrowing

powers of the company and mortgaging the property of the company;

executing checks, promissory

notes, and other negotiable instruments on behalf of the company;

maintaining or registering

a register of relevant charges of the company.

Under British Virgin Islands law, our directors

owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith and with a view to

our best interests.

When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence

and skills that a reasonable director would exercise in comparable circumstances, taking into account without limitation the nature of

the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken by him.

exercising the powers of a director, the directors must exercise their powers for a proper purpose and shall not act or agree to the company

acting in a manner that contravenes our amended and restated memorandum and articles of association or the BVI Act.

In fulfilling their

duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association.

the right to seek damages if a duty owed by our directors is breached.

The functions and powers of

our board of directors include, among others:

appointing officers and determining the term of office of the officers;

authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds, or associations as deemed advisable;

exercising the borrowing powers of the company and mortgaging the property of the company;

executing checks, promissory notes, and other negotiable instruments on behalf of the company;

maintaining or registering a register of relevant charges of the company.

Terms of Directors and Executive Officers

Each of our directors holds

office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case

such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection.

All of our executive officers are appointed by and serve at the discretion of our board of directors.

Our current directors were re-elected

by our shareholders at our 2022 Annual General Meeting, which was held on July 25, 2022, until the next shareholders meeting and until

their successors are duly elected and qualified.

Each of our directors holds office until a successor

has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office

until the next following annual meeting of shareholders at which time such director is eligible for reelection.

All of our executive officers

are appointed by and serve at the discretion of our board of directors.

Our current directors were re-elected by our shareholders at our

2023 Annual General Meeting, which was held on July 28, 2023, until the next shareholders meeting and until their successors are duly

elected and qualified.

Qualification

There is currently no shareholding

qualification for directors.

There is currently no shareholding qualification

for directors.

Board Composition, Committees and Independence

Under the rules of NASDAQ,

“independent” directors must make up a majority of a listed company’s Board of Directors.

In addition, applicable NASDAQ

rules require that, subject to specified exceptions, each member of a listed company’s audit and compensation committees be independent

within the meaning of the applicable NASDAQ rules.

Audit committee members must also satisfy the independence criteria set forth in Rule

10A-3 under the Exchange Act.

Our Board has undertaken

a review of the independence of each director and considered whether any director has a material relationship with us that could compromise

the director’s ability to exercise independent judgment in carrying out his or her responsibilities.

As a result of this review,

our Board determined that Messrs.

Under the rules of NASDAQ, “independent”

directors must make up a majority of a listed company’s Board of Directors.

In addition, applicable NASDAQ rules require that, subject

to specified exceptions, each member of a listed company’s audit and compensation committees be independent within the meaning of

the applicable NASDAQ rules.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange

Our Board has undertaken a review of the independence

of each director and considered whether any director has a material relationship with us that could compromise the director’s ability

to exercise independent judgment in carrying out his or her responsibilities.

As a result of this review, our Board determined that Messrs.

Kwong Sang Liu and Yongyuan Chen, and Ms.

Lei Yang are independent directors as defined in the listing

standards of NASDAQ and SEC rules and regulations.

Lei Yang are independent directors as defined in the listing standards of NASDAQ and SEC rules

and regulations.

A majority of our directors are independent, as required under applicable NASDAQ rules.

As required under applicable NASDAQ rules, our independent directors will meet in regularly scheduled executive sessions at which only

independent directors are present.

As required under applicable

NASDAQ rules, our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

Committees of the Board of Directors

We have established three

committees under the board of directors:

We have established three committees under the

board of directors:

an audit committee, a compensation committee, and a nominating and corporate governance committee.

We have adopted a charter for each of the three committees.

We have adopted

a charter for each of the three committees.

Copies of the charters for each committee are available at http://ir.atifchina.com.

Each committee’s members and functions are described below.

Each committee’s

members and functions are described below.

Audit Committee .

audit committee consists of Messrs.

Our audit committee consists

Kwong Sang Liu and Yongyuan Chen, and Ms.

Kwong Sang Liu is the chairman of our audit

We have determined that Messrs.

Kwong Sang Liu is the chairman of our audit committee.

We have determined

Kwong Sang Liu and Yongyuan Chen, and Ms.

Lei Yang satisfy the “independence”

requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act.

Lei Yang satisfy the “independence” requirements of Section 5605(a)(2) of

the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act.

Our board also has determined that Mr.

Kwong Sang Liu qualifies as an audit committee financial expert within the meaning of the SEC

rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules.

The audit committee oversees our accounting

and financial reporting processes and the audits of the financial statements of our company.

The audit committee is responsible for,

among other things:

appointing the independent

auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

reviewing with the independent

auditors any audit problems or difficulties and management’s response;

discussing the annual audited

financial statements with management and the independent auditors;

reviewing the adequacy

and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major

financial risk exposures;

reviewing and approving

all proposed related party transactions;

meeting separately and

periodically with management and the independent auditors;

monitoring compliance with

our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Liu qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within

the meaning of the Nasdaq Listing Rules.

The audit committee oversees our accounting and financial reporting processes and the audits

of the financial statements of our company.

The audit committee is responsible for, among other things:

appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

reviewing with the independent auditors any audit problems or difficulties and management’s response;

discussing the annual audited financial statements with management and the independent auditors;

reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

reviewing and approving all proposed related party transactions;

meeting separately and periodically with management and the independent auditors;

monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Compensation Committee.

Our compensation committee consists of Messrs.

Our compensation

committee consists of Messrs.

Kwong Sang Liu and Yongyuan Chen, and Ms.

Lei Yang is the chairman of

our compensation committee.

Lei Yang is the chairman of our compensation committee.

We have determined that Messrs.

Kwong Sang Liu and Yongyuan Chen, and Ms.

Lei Yang satisfy the “independence”

requirements of Section 5605(a)(2) of the NASDAQ Listing Rules and Rule 10A-3 under the Securities Exchange Act.

The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation,

relating to our directors and executive officers.

Our chief executive officer may not be present at any committee meeting during which

his compensation is deliberated.

Lei Yang satisfy the “independence” requirements

of Section 5605(a)(2) of the NASDAQ Listing Rules and Rule 10A-3 under the Securities Exchange Act.

The compensation

committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our

directors and executive officers.

Our chief executive officer may not be present at any committee meeting during which his compensation

is deliberated.

The compensation committee is responsible for, among other things:

reviewing and approving

to the board with respect to the total compensation package for our most senior executive officers;

approving and overseeing

the total compensation package for our executives other than the most senior executive officers;

reviewing and recommending

to the board with respect to the compensation of our directors;

reviewing periodically

and approving any long-term incentive compensation or equity plans;

selecting compensation

consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence

from management;

programs or similar arrangements,

annual bonuses, employee pension and welfare benefit plans.

Nominating and Corporate

Governance Committee.

reviewing and approving to the board with respect to the total compensation package for our most senior executive officers;

approving and overseeing the total compensation package for our executives other than the most senior executive officers;

reviewing and recommending to the board with respect to the compensation of our directors;

reviewing periodically and approving any long-term incentive compensation or equity plans;

selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management;

programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Nominating and Corporate Governance Committee.

Our nominating and corporate governance committee currently consists of Messrs.

Kwong Sang Liu and Yongyuan

Chen, and Ms.

Kwong Sang Liu and Yongyuan Chen, and Ms.

Yongyuan Chen is the chairman of our nominating and corporate governance committee.

Kwong Sang Liu

and Yongyuan Chen, and Ms.

Lei Yang satisfy the “independence” requirements of Section 5605(a)(2) of the NASDAQ

Listing Rules and Rule 10A-3 under the Securities Exchange Act.

The nominating and corporate governance committee assists the

board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its

The nominating and corporate governance committee is responsible for, among other things:

identifying and recommending

nominees for election or re-election to our board of directors or for appointment to fill any vacancy;

reviewing annually with

our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability

of service to us;

identifying and recommending

to our board the directors to serve as members of committees;

advising the board periodically

with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable

laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective

action to be taken;

monitoring compliance with

our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Kwong Sang Liu and Yongyuan Chen, and

Lei Yang satisfy the “independence” requirements of Section 5605(a)(2) of the NASDAQ Listing Rules and

Rule 10A-3 under the Securities Exchange Act.

The nominating and corporate governance committee assists the board of directors in

selecting individuals qualified to become our directors and in determining the composition of the board and its committees.

The nominating

and corporate governance committee is responsible for, among other things:

identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy;

reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us;

identifying and recommending to our board the directors to serve as members of committees;

advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken;

monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Director Qualifications

In accordance with its charter,

our nominating and corporate governance committee develops and recommends to our board of directors appropriate criteria, including desired

qualifications, expertise, skills and characteristics, for selection of new directors and periodically reviews the criteria adopted by

our board of directors and, if appropriate, recommends changes to such criteria.

In accordance with its charter, our nominating

and corporate governance committee develops and recommends to our board of directors appropriate criteria, including desired qualifications,

expertise, skills and characteristics, for selection of new directors and periodically reviews the criteria adopted by our board of directors

and, if appropriate, recommends changes to such criteria.

Board Diversity

Our board of directors desires

to seek members from diverse professional backgrounds who combine a strong professional reputation and knowledge of our business and

industry with a reputation for integrity.

Our board of directors does not have a formal policy with respect to diversity and inclusion

but is in process of establishing a policy on diversity.

Diversity of experience, expertise and viewpoints is one of many factors the

nominating and corporate governance committee considers when recommending director nominees to our board of directors.

Further, our board

of directors is committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from

which new candidates are selected.

Our board of directors also seeks members that have experience in positions with a high degree of

responsibility or are, or have been, leaders in the companies or institutions with which they are, or were, affiliated, but may seek

other members with different backgrounds, based upon the contributions they can make to our company.

We believe that our current

board composition reflects our commitment to diversity in the areas of gender and professional background.

Board Diversity Matrix (as of October 25,

Our board of directors desires to seek members

from diverse professional backgrounds who combine a strong professional reputation and knowledge of our business and industry with a reputation

for integrity.

Our board of directors does not have a formal policy with respect to diversity and inclusion but is in process of establishing

a policy on diversity.

Diversity of experience, expertise and viewpoints is one of many factors the nominating and corporate governance

committee considers when recommending director nominees to our board of directors.

Further, our board of directors is committed to actively

seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected.

board of directors also seeks members that have experience in positions with a high degree of responsibility or are, or have been, leaders

in the companies or institutions with which they are, or were, affiliated, but may seek other members with different backgrounds, based

upon the contributions they can make to our company.

We believe that our current board composition

reflects our commitment to diversity in the areas of gender and professional background.

Board Diversity Matrix (as of November 9,

Total Number of Directors

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Indemnification Agreements

We executed a standard form

of indemnification agreement (“Indemnification Agreement”) with each of our Board members and executive officers (each, an

“Indemnitee”).

Pursuant to and subject to

the terms, conditions and limitations set forth in the Indemnification Agreement, we agreed to indemnify each Indemnitee, against any

and all expenses incurred in connection with proceedings relating to the Indemnitee’s service as our officer and or director, or

is or was serving at our request as a director or officer of another corporation, partnership, joint venture, or other entity or enterprise

but only if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and

in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful.

In addition, the indemnification

provided in the indemnification agreement is applicable whether or not negligence or gross negligence of the Indemnitee is alleged or

Additionally, the Indemnification Agreement establishes processes and procedures for indemnification claims, advancement of expenses

and costs and contribution obligations.

As of July 31, 2022,

we had approximately 11 full-time employees, including 1 in China and 10 in America.

The table below sets forth the numbers of employees

by functions as of July 31, 2022

We executed a standard form of indemnification

agreement (“Indemnification Agreement”) with each of our Board members and executive officers (each, an “Indemnitee”).

Pursuant to and subject to the terms, conditions

and limitations set forth in the Indemnification Agreement, we agreed to indemnify each Indemnitee, against any and all expenses incurred

in connection with proceedings relating to the Indemnitee’s service as our officer and or director, or is or was serving at our

request as a director or officer of another corporation, partnership, joint venture, or other entity or enterprise but only if the Indemnitee

acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and in the case of a criminal

proceeding, had no reasonable cause to believe that his conduct was unlawful.

In addition, the indemnification provided in the indemnification

agreement is applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.

Additionally, the Indemnification

Agreement establishes processes and procedures for indemnification claims, advancement of expenses and costs and contribution obligations.

As of July 31, 2023, we had approximately 13 full-time employees,

including 1 in China and 12 in America.

The table below sets forth the numbers of employees by functions as of July 31, 2023

Executive Office

Legal Department

Financial Department

IPO Department

Engineering Department

Engineering and IR Department

Marketing Department

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Compensation for our Named Executive Officers

The following table sets

forth certain information with respect to compensation for the fiscal years ended July 31, 2022 and July 31, 2021 earned by or paid

to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated

executive officer.

The following table sets forth certain information

with respect to compensation for the fiscal years ended July 31, 2023 and July 31, 2022 earned by or paid to our chief executive

officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officer.

Name and Principal Position

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President and Chairman of ATIF, CEO of ATIF

Former CEO of ATIF

Fang Cheng ***

Former CFO of ATIF

Yue Ming ****

Liu was appointed as our president and chairman of our Board on July 10, 2020, and appointed

as our CEO on August 4, 2021.

Liu was appointed as our president and chairman of our Board on July 10, 2020, and appointed as our CEO on August 4, 2021.

Chi was appointed as our CEO on July 10, 2020 ceased to be our CEO on August 4, 2021.

Cheng ceased to be our CFO on August 4, 2021.

Yue Ming was appointed as our CFO On

August 4, 2021.

are required by PRC laws and regulations to make contributions equal to certain percentages of each employee’s salary for his

or her retirement benefit, medical insurance benefits, housing funds, unemployment, and other statutory benefits.

We paid retirement

and similar benefits for our executive officers for the fiscal years ended July 31, 2021 and 2022.

Ming was appointed as our CFO On August 4, 2021.

We are required by PRC laws and regulations to

make contributions equal to certain percentages of each employee’s salary for his or her retirement benefit, medical insurance benefits,

housing funds, unemployment, and other statutory benefits.

We paid retirement and similar benefits for our executive officers for the

fiscal years ended July 31, 2023 and 2022.

Benefit Plans

We do not have any profit

sharing plan or similar plans for the benefit of our officers, directors or employees.

We do not have any profit sharing plan or similar

plans for the benefit of our officers, directors or employees.

However, we may establish such plan in the future.

Equity Compensation Plan Information

We do not have any equity

compensation plan or similar plans for the benefit of our officers, directors or employees.

However, we may establish such plan in the

We do not have any equity compensation plan or

similar plans for the benefit of our officers, directors or employees.

However, we may establish such plan in the future.

Outstanding Equity Awards as of July 31, 2023

We had no outstanding equity

awards as of July 31, 2022.

We had no outstanding equity awards as of July

Nonqualified Deferred Compensation

Our named executive officers

did not participate in, nor earn any benefits under, a nonqualified deferred compensation plan during the fiscal year ended July 31,

named executive officers did not participate in, nor earn any benefits under, a nonqualified deferred compensation plan during the fiscal

year ended July 31, 2023.

Hedging or Offsetting Against Compensatory

have adopted a policy that our employees (including officers) and directors shall not purchase securities or other financial instruments,

or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity

securities granted as compensation to, or held directly or indirectly by, those persons.

also have adopted a formal claw-back policy for the recovery of incentive-based executive compensation erroneously awarded to executive

officers based on misstated financial reporting measures once Nasdaq’s listing standards .

Employment Agreements and Arrangements

Pursuant to employment agreements,

the form of which is filed as Exhibit 10.3 to our F-1 registration statement filed with the SEC on December 11, 2018, we agree

to employ each of our executive officers for a specified time period, which will be renewed upon both parties’ agreement thirty

days before the end of the current employment term, and payment of cash compensation and benefits became payable when we became a public

reporting company in the US.

We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts

of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms

and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty,

receipt of bribery, or severe neglect of his or her duties.

An executive officer may terminate his or her employment at any time with

a one-month prior written notice.

Each executive officer has agreed to hold, both during and after the employment agreement expires,

in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential

Our employment agreement

with Fang Cheng, our former CFO, was for a term of three years beginning on October 1, 2018, and provided for an annual salary of

$27,700, the payment of which commenced when we became a public reporting company in the US.

For the year ended July 31, 2021, we paid

salary and welfare expenses of $32,900 with Fang Cheng.

On August 4, 2021, Fang Cheng resigned as our CFO, her employment agreement was

terminated with immediate effect.

Our employment agreement

with Jun Liu, our President and Former CEO, is for a term of three years beginning on June 6, 2019, and provides for an annual salary

On July 10, 2020, we amended our employment agreement with Jun Liu to clarify that he had ceased to be employed as

our CEO and had been appointed as our president.

On August 4, 2021, we amended our employment agreement with Jun Liu to include his appointment

as the chief executive officer.

Our employment agreement

with Pishan Chi, our former CEO, was for a term of three years beginning on July 10, 2020, and provides for an annual salary of

For the year ended July 31, 2021, we paid salary and welfare expenses of $36,400 with Pishan Chi.

On August 4, 2021, Pishan

Chi resigned as our CEO.

Our employment agreement

with Yue Ming, our CFO, is for a term of three years beginning on August 9,2021, and provides for an annual salary of US$25,200.

Pursuant to employment agreements, the form of

which is filed as Exhibit 10.3 to our F-1 registration statement filed with the SEC on December 11, 2018, we agree to employ

each of our executive officers for a specified time period, which will be renewed upon both parties’ agreement thirty days before

the end of the current employment term, and payment of cash compensation and benefits became payable when we became a public reporting

company in the US.

We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive

officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions

of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt

of bribery, or severe neglect of his or her duties.

An executive officer may terminate his or her employment at any time with a one-month

prior written notice.

Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence

and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.

Our employment agreement with Fang Cheng, our

former CFO, was for a term of three years beginning on October 1, 2018, and provided for an annual salary of $27,700, the payment

of which commenced when we became a public reporting company in the US.

For the year ended July 31, 2021, we paid salary and welfare expenses

of $32,900 with Fang Cheng.

On August 4, 2021, Fang Cheng resigned as our CFO, her employment agreement was terminated with immediate

Our employment agreement with Jun Liu, our President

and Former CEO, is for a term of three years beginning on June 6, 2019, and provides for an annual salary of $240,000.

2020, we amended our employment agreement with Jun Liu to clarify that he had ceased to be employed as our CEO and had been appointed

as our president.

On August 4, 2021, we amended our employment agreement with Jun Liu to include his appointment as the chief executive

Our employment agreement with Pishan Chi, our

former CEO, was for a term of three years beginning on July 10, 2020, and provides for an annual salary of US$30,700.

ended July 31, 2021, we paid salary and welfare expenses of $36,400 with Pishan Chi.

On August 4, 2021, Pishan Chi resigned as our CEO.

Our employment agreement with Yue Ming, our CFO,

is for a term of three years beginning on August 9,2021, and provides for an annual salary of US$30,240.

Other Benefits

employees are eligible to participate in various employee benefit plans, including medical, dental, and vision care plans, flexible spending

accounts for health and dependent care, life, accidental death and dismemberment, disability, and paid time off.

Non-Employee Director

The following table sets

forth information concerning the compensation of non-employee directors for services rendered for the year ended July 31, 2022.

and Yue Ming are our executive officers and employees and are not included in the table.

Our employees are eligible to participate in various

employee benefit plans, including medical, dental, and vision care plans, flexible spending accounts for health and dependent care, life,

accidental death and dismemberment, disability, and paid time off.

Director Compensation

The following table sets forth information concerning

the compensation of non-employee directors for services rendered for the year ended July 31, 2023.

Jun Liu and Yue Ming are our executive

officers and employees and are not included in the table.

All compensation earned by Mr.

for services rendered in their capacity as our executive officers and employees, is included under the heading in this section titled

“Compensation for our Named Executive Officers.” Mr.

Ming for services rendered in their

capacity as our executive officers and employees, is included under the heading in this section titled “Compensation for our Named

Executive Officers.” Mr.

Ming received no compensation for their service as a director.

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as defined in the JOBS Act.

As an emerging growth company we are exempt from certain requirements related to executive compensation,

including the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio

of total compensation of our President and Chief Executive Officer to the median of the annual total compensation of all of our employees,

each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Act.

As an emerging growth company we are exempt from certain requirements related to executive compensation, including

the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total

compensation of our President and Chief Executive Officer to the median of the annual total compensation of all of our employees, each

as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Act.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

3 unchanged sentences

of this annual report.

each of our directors and

executive officers who beneficially own our Ordinary Shares;

each person known to us

to own beneficially more than 5.0% of our Ordinary Shares.

each of our directors and executive officers who beneficially own our Ordinary Shares;

each person known to us to own beneficially more than 5.0% of our Ordinary Shares.

Beneficial ownership includes

1 unchanged sentence

Except as indicated below, and subject to applicable community property laws,

the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned

Percentage of beneficial ownership of each listed person is based on 9,627,452 Ordinary Shares outstanding as of October 25,

Information with respect

to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary Shares.

ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment

power with respect to securities.

In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage

ownership of such person, Ordinary Shares underlying options, warrants, or convertible securities held by each such person that are exercisable

or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing

the percentage ownership of any other person.

Except as otherwise indicated in the footnotes to this table, or as required by applicable

community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned

the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by

Percentage of beneficial ownership of each listed person is based on 9,627,452 Ordinary Shares outstanding as of November 13, 2023.

Information with respect to beneficial ownership

has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary Shares.

Beneficial ownership is determined

in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities.

In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary

Shares underlying options, warrants, or convertible securities held by each such person that are exercisable or convertible within 60

days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of

any other person.

Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws,

all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned by them.

Ordinary Shares

Beneficially Owned

Directors and Executive

Officers (1) :

Directors and Executive Officers (1) :

Kwong Sang Liu

4 unchanged sentences

Eno Group Limited

Unless otherwise indicated,

the business address of each of the individuals is 25391 Commercentre Dr., Ste 200, Lake Forest, CA.

Jun Liu, our President, Chief Executive Officer and Chairman, may be deemed to beneficially own 5,268,330 ordinary shares (as adjusted to reflect the Reverse Split), which consists of (i) 3,440,860 ordinary shares, or approximately 35.7%, through his 100% ownership of Tianzhen Investments Limited, (ii) 1,820,000 ordinary shares, or approximately 18.9%, which are held indirectly through a voting rights proxy agreement with Eno Group Limited, which was assigned to Tianzhen Investments Limited.

And (iii) 7,470 ordinary shares directly held by Mr.

otherwise indicated, the business address of each of the individuals is 25391 Commercentre Dr., Ste 200, Lake Forest, CA.

Liu, our President, Chief Executive Officer and Chairman, may be deemed to beneficially own 5,268,330 ordinary shares (as adjusted to

reflect the Reverse Split), which consists of (i) 3,440,860 ordinary shares, or approximately 35.7%, through his 100% ownership

of Tianzhen Investments Limited, (ii) 1,820,000 ordinary shares, or approximately 18.9%, which are held indirectly through a voting rights

proxy agreement with Eno Group Limited, which was assigned to Tianzhen Investments Limited.

And (iii) 7,470 ordinary shares directly

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS AND DIRECTOR INDEPENDENCE

Transaction with related parties

The following includes a

summary of certain relationships and transactions, including transactions since August 1, 2020 to July 31, 2022 and any currently proposed

transactions, to which we were or are to be a participant, in which (1) the amount involved exceeded or will exceed the lesser of (i)

$120,000 or (ii) one percent (1%) of the average of our total assets for the last two completed fiscal years, and (2) any of our directors,

executive officers or holders of more than five percent (5%) of our capital stock, or any affiliate or member of the immediate family

of the foregoing persons, had or will have a direct or indirect material interest other than compensation and other arrangements that

are described under the section titled “Executive Compensation.”

In May 2022, we were engaged

by Huaya, which is owned by Mr Pishan Chi, our employee and former CEO, to provide consulting services, which amounted to revenues of

$762,000 from Huaya.

During the year ended July 31, 2021, we had no transactions with related parties.

As of July 31, 2022

and 2021, we had account receivable of $762,000 and $nil due from related parties.

with related parties

The following includes a summary of certain relationships

and transactions, including transactions since August 1, 2020 to July 31, 2022 and any currently proposed transactions, to which we were

or are to be a participant, in which (1) the amount involved exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent (1%)

of the average of our total assets for the last two completed fiscal years, and (2) any of our directors, executive officers or holders

of more than five percent (5%) of our capital stock, or any affiliate or member of the immediate family of the foregoing persons, had

or will have a direct or indirect material interest other than compensation and other arrangements that are described under the section

titled “Executive Compensation.”

We had no transactions with Huaya, which is owned

Pishan Chi, our employee and former CEO during the fiscal year 2023.

In May 2022, we were engaged by Huaya to provide consulting

services, which amounted to revenues of $762,000 from Huaya.

As of July 31, 2023 and 2022, we had account receivable of $nil and $762,000

due from Huaya.

From September 16, 2022 to March 15, 2024, we

lended a total of $100,000 loans to Huaya with interest-free and unsecured.

As of July 31, 2023 and 2022, we had a loan receivable of

$40,539 and $nil from Huaya.

In November 2022, we were engaged by Asia International

Securities Exchange Co., Ltd.(“AISE”), which is wholly owned by Mr.

Jun Liu, our Chief Executive Officer, which amounted to

revenues of $1,300,000 from AISE.

During the fiscal year ended July 31, 2022, we had no transactions with AISE.

As of July 31, 2023 and

2022, we had account receivable of $600,000 and $nil due from AISE.

During fiscal year 2023, we borrowed a total of

$1,950,285 loans from AISE with interest-free and unsecured.

As of July 31, 2023 and 2022, we had a loan payable of $729,968 and $nil

Related Person Transactions Policy

We plan to adopt a new written

related person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration, and

oversight of “related person transactions.” For purposes of policy only, a “related person transaction” is a

transaction, arrangement, or relationship (or any series of similar transactions, arrangements or relationships) in which we or any of

our subsidiaries are participants involving an amount, as long as we are a SEC smaller reporting company, that exceeds the lesser of

(a) $120,000 or (b) 1% of the average of our total assets for the last two completed fiscal years, in which any “related person”

has a material interest.

We plan to adopt a new written related person

transactions policy that sets forth our policies and procedures regarding the identification, review, consideration, and oversight of

“related person transactions.” For purposes of policy only, a “related person transaction” is a transaction, arrangement,

or relationship (or any series of similar transactions, arrangements or relationships) in which we or any of our subsidiaries are participants

involving an amount, as long as we are a SEC smaller reporting company, that exceeds the lesser of (a) $120,000 or (b) 1% of the average

of our total assets for the last two completed fiscal years, in which any “related person” has a material interest.

Transactions involving compensation

1 unchanged sentence

A related person is any executive officer, director, nominee to become a director or a holder of more than 5% of any class of our voting

securities (including our common stock), including any of their immediate family members and affiliates, including entities owned or

securities (including our ordinary shares), including any of their immediate family members and affiliates, including entities owned or

controlled by such persons.

Under the policy, the related

person in question or, in the case of transactions with a holder of more than 5% of any class of our voting securities, an officer with

knowledge of a proposed transaction, must present information regarding the proposed related person transaction to our audit committee

(or, where review by our audit committee would be inappropriate, to another independent body of our board of directors) for review.

identify related person transactions in advance, we will rely on information supplied by our executive officers, directors and certain

significant shareholders.

In considering related person transactions, our audit committee will take into account the relevant available

facts and circumstances, which may include, but are not limited to:

risks, costs, and benefits to us;

impact on a director’s independence in the event the related person is a director,

immediate family member of a director or an entity with which a director is affiliated;

terms of the transaction;

availability of other sources for comparable services or products;

terms available to or from, as the case may be, unrelated third parties;

audit committee will approve only those transactions that it determines are fair and in our

best interests.

Under the policy, the related person in question

or, in the case of transactions with a holder of more than 5% of any class of our voting securities, an officer with knowledge of a proposed

transaction, must present information regarding the proposed related person transaction to our audit committee (or, where review by our

audit committee would be inappropriate, to another independent body of our board of directors) for review.

To identify related person

transactions in advance, we will rely on information supplied by our executive officers, directors and certain significant shareholders.

In considering related person transactions, our audit committee will take into account the relevant available facts and circumstances,

which may include, but are not limited to:

the risks, costs, and benefits to us;

impact on a director’s independence in the event the related person is a director, immediate family member of a director or an

entity with which a director is affiliated;

the terms of the transaction;

the availability of other sources for comparable services or products;

the terms available to or from, as the case may be, unrelated third parties;

our audit committee will approve only those transactions that it determines are fair and in our best interests.

Director Independence

A majority of our Board of

Directors are independent directors, see the discussion above under the section “Item 10.

Directors, Executive Officers and Corporate

Governance–Board Composition, Committees and Independence.”

A majority of our Board of Directors are independent

directors, see the discussion above under the section “Item 10.

Directors, Executive Officers and Corporate Governance–Board

Composition, Committees and Independence.”

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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Public Accounting Firm

The aggregate fees billed

by our Independent Registered Public Accounting Firm, for the years ended July 31, 2022 and 2021 are as follows:

For the Fiscal Years Ended

Audit Fees(1)

Audit-Related Fees(2)

All Other Fees(4)

(1) Audit fees represent fees for professional

services provided in connection with the audit of our annual financial statements and the

review of our quarterly financial statements and those services normally provided in connection

with statutory or regulatory filings or engagements including comfort letters, consents and

other services related to SEC matters.

This information is presented as of the latest practicable

date for this annual report.

(2) Audit-related fees represent fees for assurance

and related services that are reasonably related to the performance of the audit or review

of our financial statements and not reported above under “Audit Fees.”

(3) ZH CPA did not provide us with tax compliance,

tax advice or tax planning services.

(4) All other fees include fees billed by our

independent auditors for products or services other than as described in the immediately

preceding three categories.

No such fees were incurred during the fiscal years ended July

31, 2022 and 2021.

The aggregate fees billed

by Friedman LLP (“Friedman”), our former Independent Registered Public Accounting Firm, for the years ended July 31, 2022

and 2021 are as follows:

The aggregate fees billed by our Independent Registered

Public Accounting Firm, for the years ended July 31, 2023 and 2022 are as follows:

For the Fiscal Years Ended

2 unchanged sentences

All Other Fees(4)

(1) Audit fees represent fees for professional

services provided in connection with the audit of our annual financial statements and the

review of our quarterly financial statements and those services normally provided in connection

with statutory or regulatory filings or engagements including comfort letters, consents and

other services related to SEC matters.

fees represent fees for professional services provided in connection with the audit of our annual financial statements and the review

of our quarterly financial statements and those services normally provided in connection with statutory or regulatory filings or engagements

including comfort letters, consents and other services related to SEC matters.

This information is presented as of the latest practicable

date for this annual report.

(2) Audit-related fees represent fees for assurance

and related services that are reasonably related to the performance of the audit or review

of our financial statements and not reported above under “Audit Fees.”

(3) Friedman did not provide us with tax compliance,

tax advice or tax planning services.

(4) All other fees include fees billed by our

independent auditors for products or services other than as described in the immediately

preceding three categories.

No such fees were incurred during the fiscal years ended July

31, 2022 and 2021.

Policy on Audit Committee Pre-Approval of

Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The policy of our audit committee

is to pre-approve all audit and non-audit services provided by ZH CPA, LLC, our independent registered public accounting firm, including

audit services, audit-related services, tax services and other services as described above.

Our independent registered

public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided

by our independent registered public accounting firm in accordance with this preapproval, and the fees for the services performed to

All of the services relating

to the fees described in the table above were approved by our audit committee.

EXHIBITS AND FINANCIAL STATEMENT

Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees.”

ZH CPA did not provide us with tax compliance, tax advice or tax planning services.

All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories.

No such fees were incurred during the fiscal years ended July 31, 2023 and 2022.

Policy on Audit Committee Pre-Approval of Audit

and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The policy of our audit committee is to pre-approve

all audit and non-audit services provided by ZH CPA, LLC, our independent registered public accounting firm, including audit services,

audit-related services, tax services and other services as described above.

Our independent registered public accounting firm

and management are required to periodically report to the audit committee regarding the extent of services provided by our independent

registered public accounting firm in accordance with this preapproval, and the fees for the services performed to date.

All of the services relating to the fees described

in the table above were approved by our audit committee.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) Financial Statements

The following financial statements of the Company,

and report of ZH CPA, LLC, independent registered public accounting firm, are included in this report:

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB #6413, Denver, CO)

Balance Sheets as of July 31, 2022 and 2021

Statements of Operations and Comprehensive Income (loss) for the years ended July 31, 2022 and 2021

Statements of Changes in Stockholders’ Equity for the years ended July 31, 2022 and 2021

Statements of Cash Flows for the years ended July 31, 2022 and 2021

to Consolidated Financial Statements

Financial Statements and Report of Independent

Registered Public Accounting Firms are set forth on pages F-1 through F-28 of this report.

(2) Financial Statement Schedules

2 unchanged sentences

(3) Exhibits:

The exhibits required by Item 601 of Regulation S-K are listed in

subparagraph (b) below.

The exhibits required by Item 601 of Regulation S-K are listed in subparagraph

(b) The following exhibits are filed as part of this Annual Report.

Form of Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 3.1 to the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission on December 11, 2018)

Amendment No.

1 to Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 1.2 to Form 6-K filed with the Securities and Exchange Commission on September 8, 2021)

Amendment No.

2 to Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 1.3 to Form 6-K filed with the Securities and Exchange Commission on September 8, 2021)

Description of registrant’s securities

Registrant’s Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission on December 11, 2018)

Form of Warrant (incorporated herein by reference to Exhibit 4.1 to Form 6-K filed with the Securities and Exchange Commission on November 4, 2020)

Form of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.2 to Form 6-K filed with the Securities and Exchange Commission on November 4, 2020)

Form of Warrant (incorporated herein by reference to Exhibit 4.18 to Form F-1 filed with the Securities and Exchange Commission on April 27, 2021)

Form of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.19 to Form F-1 filed with the Securities and Exchange Commission on April 27, 2021)

Agreement of Website (CNNM) Transfer dated September 20, 2018, between ATIF HK and Shenzhen Shangyuan Electronic Commerce Ltd.

(incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission on December 11, 2018)

Form of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No.

of Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 3.1

to the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission

on December 11, 2018)

1 to Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 1.2 to Form 6-K filed

with the Securities and Exchange Commission on September 8, 2021)

2 to Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 1.3 to Form 6-K filed

with the Securities and Exchange Commission on September 8, 2021)

of registrant’s securities (incorporated herein by reference to Exhibit 4(vi) to the annual report for the year ended July

31, 2022 filed with the Securities and Exchange Commission on November 2, 2022)

Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1

333-228750), as amended, initially filed with the Securities and Exchange Commission on December 11, 2018)

Form of Indemnification Agreement between directors and the Registrant (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No.

of Warrant (incorporated herein by reference to Exhibit 4.1 to Form 6-K filed with the Securities and Exchange Commission on November

of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.2 to Form 6-K filed with the Securities and Exchange Commission

on November 4, 2020)

of Warrant (incorporated herein by reference to Exhibit 4.18 to Form F-1 filed with the Securities and Exchange Commission on April

of Placement Agent Warrant (incorporated herein by reference to Exhibit 4.19 to Form F-1 filed with the Securities and Exchange Commission

on April 27, 2021)

of Website (CNNM) Transfer dated September 20, 2018, between ATIF HK and Shenzhen Shangyuan Electronic Commerce Ltd.

(incorporated

herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed

with the Securities and Exchange Commission on December 11, 2018)

of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.3 to

the registration statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission

on December 11, 2018)

of Indemnification Agreement between directors and the Registrant (incorporated herein by reference to Exhibit 10.4 to the registration

statement on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission on December

Form of Securities Purchase Agreement (incorporated herein by reference to Exhibit 10.1 to Form 6-K filed with the Securities and Exchange Commission on November 4, 2020)

Sale and Purchase Agreement regarding issued shares of Leaping Group Co., Ltd.

(incorporated herein by reference to Exhibit 99.1 to Form 6-K filed with the Securities and Exchange Commission on January 19, 2021)

Form of Securities Purchase Agreement (incorporated herein by reference to Exhibit 4.17 to Form F-1 filed with the Securities and Exchange Commission on April 27, 2021)

Consulting Agreement entered into between ATIF Holdings Limited and Massimo Motor Sports, LLC dated August 10, 2022 (incorporated herein by reference to Exhibit 10.1 to Form 8-K filed with the Securities and Exchange Commission on August 18, 2022)

Share Transfer Agreement dated May 20, 2022 between ATIF Holdings Inc.

and Pishan Chi

Sale and Purchase Agreement dated August 1, 2022 between ATIF Inc.

and Asia Time (HK) International Finance Service Limited

Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the registration statement on Form F-1 (File No.

of Securities Purchase Agreement (incorporated herein by reference to Exhibit 10.1 to Form 6-K filed with the Securities and Exchange

Commission on November 4, 2020)

and Purchase Agreement regarding issued shares of Leaping Group Co., Ltd.

(incorporated herein by reference to Exhibit 99.1 to Form

6-K filed with the Securities and Exchange Commission on January 19, 2021)

of Securities Purchase Agreement (incorporated herein by reference to Exhibit 4.17 to Form F-1 filed with the Securities and Exchange

Commission on April 27, 2021)

Agreement entered into between ATIF Holdings Limited and Massimo Motor Sports, LLC dated August 10, 2022 (incorporated herein by

reference to Exhibit 10.1 to Form 8-K filed with the Securities and Exchange Commission on August 18, 2022)

Transfer Agreement dated May 20, 2022 between ATIF Holdings Inc.

and Pishan Chi (incorporated herein by reference to Exhibit 10.8

to the annual report for the year ended July 31, 2022 filed with the Securities and Exchange Commission on November 2, 2022)

and Purchase Agreement dated August 1, 2022 between ATIF Inc.

and Asia Time (HK) International Finance Service Limited (incorporated

herein by reference to Exhibit 10.9 to the annual report for the year ended July 31, 2022 filed with the Securities and Exchange

Commission on November 2, 2022)

of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the registration statement

on Form F-1 (File No.

333-228750), as amended, initially filed with the Securities and Exchange Commission on December 11,

List of subsidiaries of the Registrant

Consent of Dentons (Guangzhou) LLP

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Inline XBRL Instance

Inline XBRL Taxonomy

Extension Schema Document

Inline XBRL Taxonomy

Calculation Linkbase Document

Inline XBRL Taxonomy

Extension Definition Linkbase Document

Inline XBRL Taxonomy

Extension Label Linkbase Document

Inline XBRL Taxonomy

Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

of subsidiaries of the Registrant

Consent of ZH CPA, LLC

Certification

of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification

of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification

of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

Certification

of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

of Claw Back Policy

Code of Business Conduct and Ethics

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith

Indicates management contract

or compensatory plan or arrangement.

Indicates management contract or compensatory plan or arrangement.

Form 10-K Summary

Pursuant to the requirements

of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or

15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

November 13, 2023

ATIF Holdings

ATIF Holdings Limited

Chief Executive Officer

2 unchanged sentences

( Principal Financial Officer )

Pursuant to the requirements

of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in

the capacities and on the dates indicated.

Chief Executive Officer and Chairman

( Principal Executive

Chief Financial Officer

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

Chief Executive Officer and Chairman of the Board

November 13, 2023

( Principal Financial

and Accounting Officer )

( Principal Executive Officer )

Chief Financial Officer and Director

November 13, 2023

( Principal Financial and Accounting Officer )

/s/ Kwong Sang Liu

4 unchanged sentences

Yongyuan Chen

FINANCIAL STATEMENTS

November 13, 2023

FINANCIAL STATEMENTS

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB # 6413 , Denver, CO) F-2

5 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of ATIF Holdings Limited

on the Financial Statements

have audited the accompanying balance sheets of ATIF Holdings Limited and its subsidiaries (“the Company”) as of July 31,

2022 and 2021, and the related statements of income(loss), comprehensive income(loss), stockholders’ equity, and cash flows for

each of the years in the two-year period ended July 31, 2022, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31,

2022 and 2021, and the results of its operations and its cash flows for each of the years in the two- year period ended July 31, 2022,

in conformity with accounting principles generally accepted in the United States of America.

Company’s ability to Continue as a Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operating

These conditions raise substantial doubt about its ability to continue as a going concern.

Management’s evaluation

of the events and conditions and plans regarding these matters are also described in Note 2.

The consolidated financial statements do

not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

To the Board of Directors and Stockholders

ATIF Holdings Limited

Opinion on the Financial Statements

We have audited the accompanying

consolidated balance sheets of ATIF Holdings Limited and its subsidiaries (the “Company”) as of July 31, 2023 and 2022, and

the related consolidated statements of income(loss), comprehensive income(loss), stockholders’ equity, and cash flows for each

of the years in the two-year period ended July 31, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of July 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended

July 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

The Company’s ability to Continue

as a Going Concern

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated

financial statements, the Company has incurred significant losses and negative cash flows from operating activities.

These conditions

raise substantial doubt about its ability to continue as a going concern.

Management’s evaluation of the events and conditions

and plans regarding these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits

in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is

not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

2 unchanged sentences

Accordingly, we express no such opinion.

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Our audits included performing

procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and

performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

have served as the Company’s auditor since 2021.

and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that

our audits provide a reasonable basis for our opinion.

/s/ ZH CPA, LLC

We have served as the Company’s auditor since 2021.

Denver, Colorado

November 13, 2023

1600 Broadway,

Suite 1600, Denver, CO, 80202, USA.

1600 Broadway, Suite 1600, Denver, CO, 80202,

1.303.386.7224 Fax:

1 unchanged sentence

admin@zhcpa.us

HOLDINGS LIMITED

BALANCE SHEETS

ATIF HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

As of July 31,

1 unchanged sentence

Cash and cash equivalents

Accounts receivable

Accounts receivable – a related party

Investment in trading securities

Due from a related party

Due from buyers of Leaping Group Corporation (“LGC”) (Note 6)

7 unchanged sentences

CURRENT LIABILITIES

Accounts payable

Accounts payable, accrued expenses and other current liabilities

Deferred revenue

Taxes payable

Accrued expenses and other current liabilities

Due to related parties

Operating lease liabilities, current

4 unchanged sentences

Additional paid-in capital

Statutory reserve

Accumulated deficit

1 unchanged sentence

( 24,784,325 )

Accumulated other comprehensive loss

Total ATIF Holdings Limited Stockholders’ equity

2 unchanged sentences

* Retrospectively restated due to five for one reverse stock split, see Note 17.

accompanying notes are an integral part of these consolidated financial statements.

HOLDINGS LIMITED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

The accompanying notes are an integral part

of these consolidated financial statements.

ATIF HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

For the Years Ended

5 unchanged sentences

General and administrative expenses

Provision for doubtful accounts

Impairment of long-lived assets

Provision against accounts receivable due from a related party

Total operating expenses

1 unchanged sentence

( 2,213,580 )

( 2,421,914 )

Other income (expenses):

Interest income, net

Other (expenses) income, net

(Loss) gain from investment in trading securities

Other income (expenses), net

Provision against due from buyers of LGC

( 2,654,767 )

Gain (loss) from investment in trading securities

( 2,432,107 )

Gain from disposal of subsidiaries and VIE

Total other (expense) income, net

Total other expense, net

( 2,090,235 )

( 1,157,519 )

Loss before income taxes

2 unchanged sentences

Income tax provision

Net loss from continuing operations

( 2,882,299 )

( 3,371,099 )

Net loss from discontinued operations

( 6,625,898 )

( 3,371,099 )

( 9,000,248 )

Net loss attributable to non-controlling interests

12 unchanged sentences

Loss Per share – basic and diluted

Loss Per share from continuing operations – basic and diluted

Loss Per share from discontinued operations – basic and diluted

Weighted Average Shares Outstanding*

1 unchanged sentence

Retrospectively restated due to five for one reverse stock split, see Note 17.

accompanying notes are an integral part of these consolidated financial statements.

HOLDINGS LIMITED

STATEMENTS OF CHANGES IN EQUITY

THE YEARS ENDED JULY 31, 2022 AND 2021

The accompanying notes are an integral part

of these consolidated financial statements.

ATIF HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED JULY 31, 2023 AND 2022

Ordinary Share

Comprehensive

Noncontrolling

at July 31, 2020

$ ( 13,491,659 )

of ordinary shares in connection with disposal of LGC

( 1,111,110 )

( 5,998,881 )

( 5,999,992 )

of ordinary shares pursuant to registered direct offering

of warrants pursuant to registered direct offering

from shareholders

( 16,516,711 )

( 16,621,968 )

loss for the year

Balance at July 31, 2021

$ ( 22,055,433 )

$ ( 175,220 )

currency translation adjustment

at July 31, 2021

Issuance of ordinary shares pursuant to exercise of warrants

Issuance of ordinary shares as fractional shares of reverse stock split*

Withdrawal of investment by a limited partner of ATIF LP (Note 1)

( 3,000,000 )

of ordinary shares pursuant to exercise of warrants

of ordinary shares as fractional shares of reverse stock split*

of investment by a limited partner of ATIF LP (Note 1)

Appropriation of investment gain to the limited partner of ATIF LP (Note 1)

Net loss for the year

( 2,910,394 )

( 3,371,099 )

Appropriation

of investment gain to the limited partner of ATIF LP (Note 1)

loss for the year

Foreign currency translation adjustment

Reclassification of statutory reserve and accumulated other comprehensive loss

Balance at July 31, 2022

$ ( 24,784,325 )

$ ( 369,045 )

currency translation adjustment

at July 31, 2022

Net loss for the year

( 2,882,299 )

Disposal of ATIF GP

Balance at July 31, 2023

$ ( 27,666,624 )

* Retrospectively restated due to five for one reverse stock split, see Note 17.

accompanying notes are an integral part of these consolidated financial statements.

HOLDINGS LIMITED

STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part

of these consolidated financial statements.

ATIF HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended

2 unchanged sentences

( 3,371,099 )

net loss from discontinued operations

Net loss from continuing operations

( 3,371,099 )

( 2,374,350 )

Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Amortization of right-of-use assets

Provision against due from buyers of LGC

Provision against accounts receivable due from a related party

Loss from disposal of property and equipment

Loss (Gain) from investment in trading securities

(Gain) loss from investment in trading securities

Loss from disposal of a subsidiary

Changes in operating assets and liabilities:

Accounts receivable

Accounts receivable – a related party

3 unchanged sentences

Taxes payable

Accrued expenses and other liabilities

Lease liabilities

Net cash used in operating activities from continuing operations

Accounts payable, accrued expenses and other current liabilities

( 1,982,117 )

Net cash used in operating activities from discontinued operations

Lease liabilities

Net cash used in operating activities

5 unchanged sentences

( 1,437,944 )

Proceeds from redemption of trading securities

Investment in an equity investee

Collection of investment deposit for life insurance contract

Net cash (used in) provided by investing activities from continuing operations

( 1,591,535 )

Net cash provided by investing activities from discontinued operations

Net cash (used in) provided by investing activities

Proceeds from disposal of investment in an equity investee

Loans to a related party

Collection of loans from a related party

Net cash provided by (used in) investing activities

( 1,591,535 )

Cash flows from financing activities:

Capital contribution

Borrowings from a related party

Withdrawal of capital contribution limited partners of ATIF LP

1 unchanged sentence

Payment of investment gains to the limited partner of ATIF LP

Proceeds from issuance of ordinary shares pursuant to a registered direct offering, net of issuance cost

Proceeds from exercise of warrants

Proceeds from related party borrowings

Repayment of related party borrowings

Net cash (used in) provided by financing activities from continuing operations

( 1,960,946 )

Net cash used in financing activities from discontinued operations

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

( 1,960,946 )

Effect of exchange rate changes on cash

Net (decrease) increase in cash from continuing operations

Net decrease in cash

( 1,144,115 )

Net increase (decrease) in cash from discontinued operations

Cash from continuing operations, beginning of year

Cash from discontinued operations, beginning of year

( 3,846,603 )

Cash, beginning of year

Cash, end of year

Cash from discontinued operations, end of year

Cash from continuing operations, end of year

Supplemental disclosure of cash flow information:

1 unchanged sentence

Cash paid for income tax

Supplemental disclosure of Non-cash investing and financing activities of continuing operations

Collection of ordinary shares in connection with disposal of LGC

Receivable in connection with disposal of LGC

Right-of-use assets obtained in exchange for operating lease obligations

Supplemental disclosure of Non-cash investing and financing activities of discontinued operations

Common shares issued for acquisition of LGC

Debt conversion for acquisition of LGC

Net assets acquired from LGC

Net liabilities derecognized for termination of VIE

$ ( 405,823 )

Supplemental disclosure of Non-cash investing and financing activities

Right-of-use assets obtained in exchange for operating lease obligations

accompanying notes are an integral part of these consolidated financial statements.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

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”).

Company adopted its current name on March 7, 2019.

owns 100 % equity interest of ATIF Limited (“ATIF HK”), formerly known as China Elite International Holdings Limited and Asia

Times International Finance Limited, a limited liability company established in Hong Kong on January 6, 2015, and adopted its current

name on March 7, 2019.

ATIF HK acquired a financial and news media platform www.chinacnnm.com in September 2018.

May 20, 2015, ATIF HK incorporated Huaya Consultant (Shenzhen) Co., Ltd.

(“Huaya”) as a Wholly Foreign Owned Enterprise

(“WFOE”) in China.

On September 5, 2018, Huaya entered into a series of contractual arrangements with the owners of

Qianhai Asia Era (Shenzhen) International Financial Service Co., Ltd.

(“Qianhai”), a company incorporated on November 3,

2015, under the laws of China with a registered capital of RMB 5 million (approximately $ 0.75 million), which had been fully funded in

December 2017.

Qianhai is primarily engaged in providing business advisory and financial consulting services to small and medium-sized

enterprise customers in the PRC.

originally owned a 100 % controlled subsidiary Qianhai Asia Era (Shenzhen) International Fund Management Co., Ltd.

Fund”), which had limited operation since its inception on December 11, 2015.

In connection with the reorganization of the

legal structure for the initial public offering (“IPO”) of the Company, Asia Era Fund was spun off in two steps in August

2018 through September 2018.

January 21, 2021, the Company incorporated ATIF-1 GP, LLC (“ATIF GP”) under the laws of Delaware of the United States.

GP is a wholly owned subsidiary of the Company, and focuses on fund management business.

February 16, 2021, ATIF-1, LP (“ATIF LP”) was established as a private equity fund through our indirectly-wholly owned subsidiary,

The accompanying notes are an integral part

of these consolidated financial statements.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION

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,

The Company is primarily engaged in providing business advisory and financial consulting services to small and medium-sized enterprise

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.

Enter into a sales agreement of ATIF GP

21, 2021, the Company incorporated ATIF-1 GP, LLC (“ATIF GP”) under the laws of Delaware of the United States.

a wholly owned subsidiary of the Company, and focuses on fund management business.

16, 2021, ATIF-1, LP (“ATIF LP”) was established as a private equity fund through our indirectly-wholly owned subsidiary,

ATIF-1 GP, LLC (“ATIF GP”), a Delaware limited liability company, as the general partner.

2 unchanged sentences

The investment manager for the fund is ATIF Inc.

ATIF LP manages approximately

$ 1.3 million and $ 4.8 million assets under management (“AUM”) as of July 31, 2022 and 2021, respectively.

ended July 31, 2022, three limited partners of ATIF LP withdrew the investment of $ 3.0 million.

In addition, the Company also paid investment

gain of $ 29,149 to the limited partner, which was recorded as a reduction of non-controlling interest.

December 22, 2021, ATIF Inc.

incorporated ATIF BD LLC (“ATIF BD”) under the laws of California of the United States.

25, 2022, the Company incorporated ATIF Investment Limited (“ATIF Investment”) under the laws of BVI.

of ATIF HK and Huaya

May 20, 2022, the Company entered into a share transfer agreement with Mr.

Pishan Chi, pursuant to which the Company transferred all

of its equity interest in ATIF HK and its wholly owned subsidiary, Huaya to Mr.

Chi at $ nil consideration.

Chi was the Company’s

former Chief Executive Officer for the period from July 10, 2020 through August 4, 2021.

The transfer of equity interest was closed on

May 31, 2022.

transfer of equity interest in ATIF HK and Huaya was for the purpose of mitigation of restrictions on China-based companies raising capital

offshore by the PRC government.

Upon the transfer of ATIF HK and Huaya, the Company would continue its effort to provide financial consulting

services to clients from North America and other areas.

The management believed the disposition does not represent a strategic shift

because it is not changing the way it is running its business.

The Company has not shifted the nature of its operations, not is it exiting

the North America market, which is the Company’s major geographic market area.

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 (see Note 6).

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

1 – ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

of VIE agreements with Qianai

February 3, 2021, the Company closed termination of its variable interest entity (“VIE”) agreements with Qianhai Asia Times

(Shenzhen) International Financial Services Co., Ltd.

Upon the termination, Qianhai transferred all of its business

and employees to Huaya, a wholly owned subsidiary of the Company.

The termination of the Qianhai VIE agreements did not contain any penalties

or non-compete agreements.

transferred all of its China-based business and employees to Huaya before termination of the VIE agreements.

The termination of the VIE

agreements did not discontinue our consulting service business because such services has been transferred to Huaya and ATIF Inc.

the clients located in China and the United States, respectively.

The termination also did not cause material impairment of our long-lived

assets (primarily including fixed assets such as office furniture and equipment and automobile) because all of the fixed assets have

been transferred to our PRC subsidiary Huaya upon termination of the VIE agreements.

The management believed the termination of Qianhai

VIE agreements does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial

The termination is not accounted as discontinued operations in accordance with ASC 205-20 (see Note 5).

of Leaping Group Co., Ltd.

On April 22, 2020, the Company completed

an acquisition of 51.2 % of the equity interest of Leaping Group Co., Ltd.

(“LGC”) from its original shareholders for

a total consideration of approximately $ 22.92 million, including cash consideration of $ 1.85 million and issuance of 9,940,002 shares

( 1,988,000 ordinary shares retrospectively restated for accounting purposes for effect of reverse stock split on August 30, 2021) of ATIF’s

common stock with fair value of approximately $ 21.07 million (see Note 4).

LGC, through its subsidiaries and similar VIE contractual agreements,

controls Leaping Media Group Co., Ltd.

(“LMG”), an operating entity located in Shenyang, China.

LMG, along with its operating

subsidiaries, is engaged in the multi-channel advertising business, event planning and execution business, film production business and

movie theater operating business (collectively “media business”) in China.

LMG used to be one of the Company’s clients

that sought business advisory services.

Upon closing of the acquisition, ATIF owns 51.2 % equity interest of LGC and hereby consolidates

operations of LGC.

On January 29, 2021, the Company completed a disposition

of 51.2 % of the equity interest of LGC.

The Company sold all of its shares of LGC to Jiang Bo, Jiang Tao and Wang Di (collectively, the

“Buyers”) in exchange for (i) 5,555,548 ordinary shares ( 1,111,110 ordinary shares retrospectively restated for accounting

purposes for effect of reverse stock split on August 30, 2021) of the Company owned by the Buyers and (ii) payment by the Buyers in the

amount of $ 2,300,000 plus interest at an interest rate of 10 % per annum on the unpaid amount if the principal amount of US$ 2,300,000 is

not paid by January 14, 2022.

All principal and accrued and unpaid interest shall be due on January 14, 2023.

As of July 31, 2022, the

principal and accrued and unpaid interest amounted to $ 2,654,767 .

accordance with ASC 205-20, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of

a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal

represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components

of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale.

The disposition of LGC met the criteria

in paragraph 205-20-45-1E and was reported as a discontinued operation (Note 4).

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

2 – LIQUIDITY and GOING CONCERN

the years ended July 31, 2022 and 2021, the Company reported a net loss from continuing operations of approximately $ 3.4 million and

$ 2.4 million, respectively, and operating cash outflows from continuing operations of approximately $ 0.1 million and $ 2.5 million.

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.

of July 31, 2022, the Company had cash of $ 1.8 million.

On the other hand, the Company had current liabilities of $ 2.8 million.

the Company had three service-in-progress agreements, and expected to collect consulting service fees of $ 2.5 million for the next 12

The Company also had $2.7 million receivable from buyers of LGC in connection with the disposal of LGC which will be due in early

In addition, due to the recent intense relationship between the U.S.

and China, which has become more fragile as a result of the

outbreak and spread of COVID-19, plus the tightening of U.S.

legislation and public listing rules to curb some small Chinese companies

to access the U.S.

capital markets, an increasing number of Chinese companies are putting off or slowing down their plans for U.S.

due to these uncertainties.

Furthermore, due to the impact of COVID-19, some of our existing customers may experience financial distress

or business disruptions, which could lead to potential delay or default on their payments.

Any increased difficulty in collecting accounts

receivable, or early termination of our existing consulting service agreements due to deterioration in economic conditions could further

negatively impact our cash flows.

Given these factors, our potential customers’ perception and confidence to go public in the United

States has been negatively impacted and our operating revenue and cash flows may continue to underperform in the near terms.

we had cash of $ 1.8 million as of July 31, 2022, given the above mentioned uncertainties, the management believes that the Company will

continue as a going concern in the following 12 months from the date the Company’s 2022 consolidated financial statements

We believe that our existing cash, together with $3.2 million that

currently remains available under our $8.0 million revolving line of credit with Silicon Valley Bank (“SVB Credit Facility”),

and $4.0 million available under the subordinated line of credit (“Subordinated LOC”) as of September 12, 2022, will be sufficient

to meet our anticipated capital resources to fund planned operations for the next twelve (12) months.

the Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities

and funds raised from equity financings.

In October 2021, the Company raised proceeds of $ 1.1 million from exercise of warrants to purchase

389,855 of its ordinary shares by warrant holders who subscribed for ordinary shares in the registered direct offering closed in November

accompanying 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.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Principles of Consolidation

accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“U.S.

GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission

The consolidated financial statements of the Company include the accounts of the Company and its subsidiaries.

consolidated financial statements of the Company also include the accounts of ATIF LP, for which the Company is an investment manager

and has primary beneficiary over the ATIF LP.

All intercompany balances and transactions have been eliminated upon consolidation.

of July 31, 2022, the Company’s consolidated financial statements reflect the operating results of the following entities:

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.

Disposal of ATIF HK and Huaya

On May 20, 2022, the Company entered into a share

transfer agreement with Mr.

Pishan Chi, pursuant to which the Company transferred all of its equity interest in ATIF HK and its wholly

owned subsidiary, Huaya to Mr.

Chi at $ nil consideration.

Chi was the Company’s former Chief Executive Officer for the period

from July 10, 2020 through August 4, 2021.

The transfer of equity interest was closed on May 31, 2022.

The transfer of equity interest in ATIF HK and

Huaya was for the purpose of mitigation of restrictions on China-based companies raising capital offshore by the PRC government.

the transfer of ATIF HK and Huaya, the Company would continue its effort to provide financial consulting services to clients from North

America and other areas.

The management believed the disposition does not represent a strategic shift because it is not changing the way

it is running its business.

The Company has not shifted the nature of its operations, not is it exiting the North America market, which

is the Company’s major geographic market area.

The termination is not accounted as discontinued operations in accordance with ASC

205-20 (see Note 5).

As of July 31, 2023, the Company’s consolidated

financial statements reflect the operating results of the following entities:

Name of Entity

Incorporation

ATIF Holdings

Limited (“ATIF”)

Principal Activities

Parent company:

ATIF Holdings Limited (“ATIF”)

January 5, 2015

1 unchanged sentence

Investment holding

owned subsidiaries of ATIF

Wholly owned subsidiaries of ATIF

October 26, 2020

Consultancy and information technology support

ATIF Investment

LLC (“ATIF Investment”)

ATIF Investment LLC (“ATIF Investment”)

April 25, 2022

Consultancy and information technology support

LLC (“ATIF BD”)

December 22, 2021

100% owned by ATIF USA

Consultancy and information technology support

GP, LLC (“ATIF GP”)

January 21, 2021

Fund management

LP, LLC (“ATIF LP”)

February 16, 2021

VIE contractual arrangements

investments in domestic Chinese companies that engage in private equity investment business and media business are both restricted in

China under current PRC laws and regulations.

Before the termination of the Qianhai VIE agreements on February 3, 2021 (see Note 5) and

disposition of LGC on January 31, 2021 (see Note 4), the Company was still operating under the VIE structure and the Company’s

main operating entities Qianhai and LMG are controlled through contractual arrangements in lieu of direct equity ownership by the Company

or any of its subsidiaries.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

of Presentation and Principles of Consolidation (continued)

associated with the VIE structure

Company believes that the contractual arrangements with its VIEs and respective shareholders are in compliance with PRC laws and regulations

and are legally enforceable.

However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual

arrangements.

If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC

government could:

revoke the business and

operating licenses of the Company’s PRC subsidiary and VIEs;

discontinue or restrict

the operations of any related-party transactions between the Company’s PRC subsidiary and VIEs;

limit the Company’s business expansion in China

by way of entering into contractual arrangements;

impose fines or other requirements with which the Company’s

PRC subsidiary and VIEs may not be able to comply;

require the Company or the Company’s PRC subsidiary

and VIEs to restructure the relevant ownership structure or operations;

restrict or prohibit the

Company’s use of the proceeds from the IPO to finance the Company’s business and operations in China.

Company’s ability to conduct its consulting services business may be negatively affected if the PRC government were to carry out

of any of the aforementioned actions.

As a result, the Company may not be able to consolidate its VIEs in its consolidated financial

statements as it may lose the ability to exert effective control over the VIEs and its respective shareholders and it may lose the ability

to receive economic benefits from its VIEs.

The Company, however, does not believe such actions would result in the liquidation or dissolution

of the Company, its PRC subsidiary, or its VIEs.

Company has not provided any financial support to the VIEs for the years ended July 31, 2021.

the Company terminated Qianhai VIE agreements on February 3, 2021 (see Note 5) and disposed of LGC on January 31, 2021 (Note

4), the Company had no balances of VIEs included in the accompanying consolidated financial statements as of July 31, 2022 and 2021.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

of Presentation and Principles of Consolidation (continued)

follow table summarized operating results of the VIEs for the period from August 1, 2021 through VIE termination date.

February 3, 2021

January 31, 2021

Operating revenue

Income (loss) from operations

$ ( 1,154,067 )

$ ( 1,214,309 )

Income (loss) before income taxes

$ ( 1,166,287 )

$ ( 1,230,052 )

Net income (loss)

$ ( 1,142,160 )

$ ( 1,205,925 )

follow table summarized cash flow information of the VIEs for the period from August 1, 2021 through VIE termination date.

February 3, 2021

January 31, 2021

Net cash provided by (used in) operating activities

$ ( 286,657 )

$ ( 119,612 )

$ ( 406,269 )

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Noncontrolling

As of July 31, 2022 and 2021, the non-controlling interest represent

minority shareholders’ 76.6 % and 68.8 % ownership interest in ATIF LP, over which the Company had 23.4 % and 31.2 % ownership

interest and acted as an investment manager through ATIF GP, its wholly owned subsidiary.

The Company had non-controlling interest of

$( 369,045 ) and $ 120,809 as of July 31, 2022 and 2021.

preparing the 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 consolidated financial statements.

Significant estimates required to be made by management include, but are not limited to, the

valuation of accounts receivable, 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.

and Cash Equivalents

includes cash on hand and demand deposits in accounts maintained with commercial banks.

The Company considers all highly liquid investment

instruments with an original maturity of three months or less from the date of purchase to be cash equivalents.

The Company maintains

most of its bank accounts in the PRC.

Receivable, net

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 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.

As of July 31, 2022 and 2021, the Company had no allowance against doubtful

accounts receivable.

in Trading Securities

securities not accounted for using the equity method are carried at fair value with changes in fair value recorded in the consolidated

statements of operations and comprehensive loss, according to ASC 321 “Investments — Equity Securities”.

years ended July 31, 2022 and 2021, the Company purchased certain publicly-listed equity securities through various open market transactions

and accounted for such investments as “investment in trading securities” and subsequently measure the investments at fair

The Company made a loss of $ 2,432,107 and $ 258,738 from investment in trading securities for the years ended July 31, 2022 and

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and Equipment, net

and equipment are stated at cost.

The straight-line depreciation method is used to compute depreciation over the estimated useful lives

of the assets, as follows:

October 6, 2022

100% owned by ATIF USA

Consultancy and information technology support

October 6, 2022

100% owned by ATIF USA

Consultancy and information technology support

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – LIQUIDITY and GOING CONCERN

For the years ended July 31, 2023 and 2022, the

Company reported a net loss of approximately $ 2.9 million and $ 3.4 million, respectively, and operating cash outflows approximately $ 2.3

million and $ 0.1 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 July 31, 2023, the Company had cash of $ 0.6

million and accounts receivables of $ 0.6 million due from a related party, 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 July 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 accompanying 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

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.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).

The 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.

Noncontrolling Interests

As of July 31, 2022, the non-controlling interest

represent minority shareholders’ 76.6 % ownership interest in ATIF LP, over which the Company had 23.4 % and acted as an investment

manager through ATIF GP, its wholly owned subsidiary.

The Company had non-controlling interest of $( 369,045 ) as of July 31, 2022.

On August 1, 2022, the Company sold all of its

equity interest in ATIF GP.

As of July 31, 2023, the Company had no noncontrolling interests.

Use of Estimates

In preparing the 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 consolidated financial statements.

estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, 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.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Cash and Cash Equivalents

Cash includes cash on hand and demand deposits

in accounts maintained with commercial banks.

The Company considers all highly liquid investment instruments with an original maturity

of three months or less from the date of purchase to be cash equivalents.

The Company maintains all of its bank accounts in the United

Accounts Receivable, net

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 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.

As of July 31, 2023 and 2022, the Company had no allowance against doubtful accounts receivable.

Investment in Trading Securities

Equity securities not accounted for using the

equity method are carried at fair value with changes in fair value recorded in the consolidated statements of operations and comprehensive

loss, according to ASC 321 “Investments — Equity Securities”.

During the years ended July 31, 2023 and 2022, the Company

purchased certain publicly-listed equity securities through various open market transactions and accounted for such investments as “investment

in trading securities” and subsequently measure the investments at fair value.

The Company made a gain of $ 192,102 and a loss of

$ 2,432,107 from investment in trading securities for the years ended July 31, 2023 and 2022.

Property and Equipment, net

Property and equipment are stated at cost.

straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:

Furniture, fixtures and equipment

Transportation vehicles

for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.

for major renewals and betterments which substantially extend the useful life of assets are capitalized.

The cost and related accumulated

depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated

statements of operations and comprehensive loss as other income or expenses.

accordance with ASC 321-10 “Investments – Equity Securities”, the Company elects to record equity investments in a

privately held company, over which the Company did not have control or exercise significant influence, using the measurement alternative

at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical

or similar investments of the same issuer.

investment in a privately held company accounted for using the measurement alternative is subject to periodic impairment reviews.

Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair

value of these equity securities, including consideration of the impact of the COVID-19 pandemic.

of July 31, 2022 and 2021, the Company did not record impairment loss against the long-term investments.

of Long-lived Assets

assets, including plant and equipment and intangible with finite lives are reviewed for impairment whenever events or changes in circumstances

(such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying

value of an asset may not be recoverable.

The Company assesses the recoverability of the assets based on the undiscounted future cash

flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to

result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of

If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based

on a discounted cash flows approach or, when available and appropriate, to comparable market values.

the years ended July 31, 2022 and 2021, the Company did not record impairment against long-lived assets from its continuing operations,

respectively.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Value of Financial Instruments

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

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

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.

Expenditures for maintenance and repairs, which

do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for major renewals and betterments

which substantially extend the useful life of assets are capitalized.

The cost and related accumulated depreciation of assets retired

or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and

comprehensive loss as other income or expenses.

Intangible assets, net

The Company capitalizes certain platform and software

development costs related to the consulting services during the application development stage.

The costs related to preliminary project

activities and post-implementation activities are expensed as incurred.

Capitalized software development costs are depreciated on a straight-line

basis over the estimated useful life of 4 years.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Long-term investments

In accordance with ASC 321-10 “Investments

– Equity Securities”, the Company elects to record equity investments in a privately held company, over which the Company

did not have control or exercise significant influence, using the measurement alternative at cost, less impairment, with subsequent adjustments

for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

Equity investment in a privately held company

accounted for using the measurement alternative is subject to periodic impairment reviews.

The Company’s impairment analysis considers

both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities, including consideration

of the impact of the COVID-19 pandemic.

As of July 31, 2022, the Company did not record

impairment loss against the long-term investments.

For the year ended July 31, 2023, the Company sold its long-term investments and had

no long-term investments as of July 31, 2023.

Impairment of Long-lived Assets

Long-lived assets, including plant and equipment

and intangible with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse

change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable.

The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate

and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds

expected from disposition of the asset, if any, are less than the carrying value of the asset.

If an impairment is identified, the Company

would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available

and appropriate, to comparable market values.

For the years ended July 31, 2023 and 2022,

the Company did not record impairment against long-lived assets, respectively.

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.

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, deposits, due from buyers of LGC and other current assets, accounts payable,

and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of these assets and

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.

Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”).

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.

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.

Company currently generates its revenue from the following main sources:

Revenue from customer’s

initial registration fee

order to engage with the Company for various consulting services, a new customer is required to pay an initial non-refundable registration

fee to the Company and the Company will then post the customer’s information and profiles on its website, at which point, the Company’s

performance obligations are satisfied and such registration fee is recognized as revenue.

The Company does not charge additional customer

profile maintenance fee after the initial posting is completed as limited effort is required for the Company to maintain such information

on an on-going basis.

No revenues were generated from customer’s initial registration for the years ended July 31, 2022 and 2021.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recognition (continued)

Revenue from consulting

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.

financial instruments including cash and cash equivalents, accounts receivable, deposits, due from buyers of LGC and other current assets,

accounts payable, 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 year end July 31, 2023, there are no transfers between different

levels of inputs used to measure fair value

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

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 years ended July 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

The Company categorizes its consulting services into three Phases:

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.

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.

III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly

listed through reverse merger transaction;

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.

estimates that Phase II normally takes about eight months to complete based on its past experience.

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;

2 unchanged sentences

the timing of this phase of service as the completion of Phase III services is not within the Company’s control.

phase of consulting services is stand-alone and fees associated with each phase are clearly identified in service agreements.

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.

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.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recognition (continued)

the disposal of 51.2 % equity interest in LGC, the Company generated revenue from Multi-Channel advertising, Event planning and execution,

Movie Theater Operating and others.

The revenues from these revenue streams were classified as a component of “net loss from discontinued

operations” upon the close of the disposition.

Multi-Channel advertising

Company’s multi-channel advertising services include pre-movie advertisements display, elevator and supermarket advertising, and

brand promotion.

Most of the Company’s client contracts are individually negotiated and, accordingly, the service period and prices

vary significantly.

Service periods typically range from one day to one year.

Company provides advertising services over the contract period.

Revenues from advertising services are recognized on straight-line basis

over the contract period, which approximates the pattern of when the underlying services are performed.

Prepayments for advertising services

are deferred and recognized as revenue when the advertising services are rendered and the Company’s performance obligations are

Company also provides advertising services through its regional distributors.

Pursuant to advertising services distribution agreements,

the Company grants the regional distributors the exclusive rights to provide local pre-movie advertising.

The advertising services distribution

agreements with these regional distributors typically have terms ranging from 11 to 24 months without automatic renewal provisions.

Under the advertising services distribution agreements, the Company has the right to set the minimum local pre-movie advertisement prices

in the movie theaters, regulate the content and quality of local pre-movie advertisements according to related laws and movie theater

rules, and examine the source of local pre-movie advertisements and refuse to display advertisements from any competitors.

of distribution fee is initially recorded as deferred revenue and is recognized as revenue ratably as services are rendered and the Company’s

performance obligations are satisfied.

Event planning and execution

Company’s event planning and execution business includes planning and arrangement of events, and production of related advertising

From the preparation of the events to executing it typically takes no more than one week.

Revenue is realized when the service

is performed in accordance with the client arrangement and upon the completion of the earnings process.

Movie Theater Operating

Company’s movie theater operating revenues are generated primarily from box office admissions and theater food and beverage sales.

Revenues of this business line are recognized when admissions and food and beverage sales are rendered at the theaters and are reported

net of sales tax.

The Company defers 100 % of the revenue associated with the sales of gift cards and packaged tickets until such time

as the items are redeemed.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recognition (continued)

the years ended July 31, 2022 and 2021, the disaggregation of revenues from continuing operations and discontinued operations was as

For the Years Ended

Consulting service revenue from continuing operations*

Other service revenues

Revenues from continuing operations

Revenue from discontinued operations (multi-channel advertising, event planning and execution and movie theater operation business under LGC)

The revenues generated

by Qianhai, ATIF HK and Huaya were included in consulting service revenue from continuing operations, because the termination of

Qianhai VIE agreement and share transfer of ATIF HK and Huaya were not accounted as discontinued operations in accordance with ASC

205-20 (see Note 5 and Note 6).

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

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.

uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax

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 July 31,

As of July 31, 2022, all of the Company’s income tax returns for the tax years ended December 31, 2017 through December 31,

2021 remain open for statutory examination by relevant tax authorities.

Added Tax (“VAT”)

revenue derived from advertising service revenues is subject to VAT.

The applicable VAT rate for the Company is 3 % for Huaya.

the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of

Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”).

ASC 260 requires companies with complex capital structures to present basic and diluted EPS.

Basic EPS is measured as net loss divided

by the weighted average common shares outstanding for the period.

Diluted presents the dilutive effect on a per share basis of potential

common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented,

or issuance date, if later.

Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or

decrease loss per share) are excluded from the calculation of diluted EPS.

For the years ended July 31, 2022 and 2021, there were

no dilutive shares.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Currency Translation

functional currency for ATIF is the U.S Dollar (“US$").

ATIF HK uses Hong Kong dollar as its functional currency, and Huaya

uses RMB as its functional currency.

For the year ended July 31, 2022, the Company primarily operates its business through ATIF Inc,

ATIF HK and Huaya, and the latter two entities were disposed of on May 31, 2022.

For the year ended July 31, 2021, the Company operates

its business through ATIF HK and Huaya.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Revenue Recognition (continued)

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

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.

The Company accounts for income taxes under ASC

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 July 31, 2023.

As of July 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.

Loss per Share

The Company computes loss per share (“EPS”)

in accordance with ASC 260, “Earnings per Share” (“ASC 260”).

ASC 260 requires companies with complex capital

structures to present basic and diluted EPS.

Basic EPS is measured as net loss divided by the weighted average common shares outstanding

for the period.

Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options

and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later.

Potential common shares

that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation

of diluted EPS.

For the years ended July 31, 2023 and 2022, there were no dilutive shares.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Foreign Currency Translation

The functional currency for ATIF is the U.S Dollar

For the year ended July 31, 2023, the Company operates its business through ATIF Inc, and no foreign currency translation

was recorded for the year ended July 31, 2023.

For the year ended July 31, 2022, the Company

primarily operates its business through ATIF Inc, ATIF HK and Huaya, and the latter two entities were disposed of on May 31, 2022.

Company’s consolidated financial statements have been translated into US$.

and liabilities accounts are translated using the exchange rate at each reporting period end date.

Equity accounts are translated at

historical rates.

Income and expense accounts are translated at the average rate of exchange during the reporting period.

The resulting

translation adjustments are reported under other comprehensive income (loss).

Gains and losses resulting from the translations of foreign

currency transactions and balances are reflected in the results of operations.

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.

No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

July 31, 2021

Assets and liabilities accounts are translated

using the exchange rate at each reporting period end date.

Equity accounts are translated at historical rates.

Income and expense accounts

are translated at the average rate of exchange during the reporting period.

The resulting translation adjustments are reported under other

comprehensive income (loss).

Gains and losses resulting from the translations of foreign currency transactions and balances are reflected

in the results of operations.

The RMB is not freely convertible into foreign

currency and all foreign exchange transactions must take place through authorized institutions.

No representation is made that the RMB

amounts could have been, or could be, converted into US$ at the rates used in translation.

The following table outlines the currency exchange

rates that were used in creating the consolidated financial statements in this report:

Foreign currency

Comprehensive

loss consists of two components, net loss and other comprehensive income (loss).

foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported

in other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company adopted ASU No.

2016-02—Leases (Topic 842) since August 1, 2019, using a modified retrospective transition method

permitted under ASU No.

This transition approach provides a method for recording existing leases only at the date of adoption

and does not require previously reported balances to be adjusted.

In addition, the Company elected the package of practical expedients

permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical

lease classification.

The standard did not materially impact the consolidated net earnings and cash flows.

adoption of ASC 842, the lease liabilities are recognized upon lease commencement for operating leases based on the present value of

lease payments over the lease term.

The right-of-use assets are initially measured at cost, which comprises the initial amount of the

lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less

any lease incentives received.

As the rates implicit in the lease cannot be readily determined, the incremental borrowing rates at the

lease commencement date are used in determining the imputed interest and present value of lease payments.

The incremental borrowing rates

were determined using a portfolio approach based on the rates of interest that the Company would have to borrow an amount equal to the

lease payments on a collateralized basis over a similar term.

The Company recognizes the single lease cost on a straight-line basis over

the remaining lease term for operating leases.

Company has elected not to recognize right-of-use assets or lease liabilities for leases with an initial term of 12 months or less;

for these leases are recognized on a straight-line basis over the lease term.

of Cash Flows

accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon

the local currencies.

As a result, amounts related to assets and liabilities reported on the consolidated statements of cash

flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

accordance with ASC 205-20, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of

a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal

represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components

of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale.

When all of the criteria to be classified

as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the

major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and

liabilities separate from those balances of the continuing operations.

At the same time, the results of all discontinued operations,

less applicable income taxes (benefit), shall be reported as components of net loss separate from the net loss of continuing operations

in accordance with ASC 205-20-45.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company had four operating business lines, including Business Advisory and Consulting Services, Multi-channel Advertising Services, Event

Planning and Execution Services and Movie Theater Operation Services.

However, due to changes in our organizational structure associated

with the LGC, which engaged in Multi-channel Advertising Services, Event Planning and Execution Services and Movie Theater Operation

Services, as a discontinued operation (Note 4 – Discontinued operation), management has determined that the Company now operates

in one operating segment with one reporting segment as of July 31, 2022 and 2021, which is the consulting service business.

Comprehensive loss

Comprehensive loss consists of two components,

net loss and other comprehensive income.

The foreign currency translation gain or loss

resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income in the consolidated

statements of operations and comprehensive loss.

Operating Leases

Upon adoption of ASC 842, the lease liabilities

are recognized upon lease commencement for operating leases based on the present value of lease payments over the lease term.

The right-of-use

assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or

before the lease commencement date, plus any initial direct costs incurred less any lease incentives received.

As the rates implicit in

the lease cannot be readily determined, the incremental borrowing rates at the lease commencement date are used in determining the imputed

interest and present value of lease payments.

The incremental borrowing rates were determined using a portfolio approach based on the

rates of interest that the Company would have to borrow an amount equal to the lease payments on a collateralized basis over a similar

The Company recognizes the single lease cost on a straight-line basis over the remaining lease term for operating leases.

The Company has elected not to recognize right-of-use

assets or lease liabilities for leases with an initial term of 12 months or less;

expenses for these leases are recognized on a straight-line

basis over the lease term.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Statement of Cash Flows

In accordance with ASC 230, “Statement of

Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies.

As a result, amounts

related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes

in the corresponding balances on the balance sheets.

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

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 July 31, 2023 and 2022, which is the consulting

service business.

Reclassification

items in the financial statements of comparative period have been reclassified to conform to the financial statements for the current

period, primarily for the effects of discontinued operations of LGC (see Note 4 for detail) and reverse split of the Company’s

ordinary shares (see Note 16 for detail).

and Contingencies

the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,

which cover a wide range of matters.

Liabilities for contingencies are recorded when it is probable that a liability has been incurred

and the amount of the assessment can be reasonably estimated.

the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be

estimated, then the estimated liability is accrued in the Company’s financial statements.

If the assessment indicates that a potentially

material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the

contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee

would be disclosed.

and Uncertainty

Substantially

all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies.

exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies

at the exchange rates quoted by the People’s Bank of China.

Approval of foreign currency payments by the People’s Bank of

China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping

documents and signed contracts.

of July 31, 2022, the Company held cash and cash equivalents of $ 203,403 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 $ 1,546,734 deposited in the investment bank accounts located in the U.S.

period, primarily for the effects of reverse split of the Company’s ordinary shares (see Note 17 for detail) and reclassification

of both statutory reserve and accumulated other comprehensive loss to accumulated losses.

Commitments and Contingencies

In the normal course of business, the Company

is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters.

for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably

If the assessment of a contingency indicates that

it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued

in the Company’s financial statements.

If the assessment indicates that a potentially material loss contingency is not probable,

but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate

of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally

not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Risks and Uncertainty

As of July 31, 2023, the Company held cash and

cash equivalents of $ 346,903 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 $ 259,119 deposited in the investment bank accounts located in the U.S.

which are not insured by FDIC.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration risk

receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit 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.

Company has a concentration of its revenues and receivables with

specific customers.

For the year ended July 31, 2023, three customers accounted for 53 %, 24 % and 22 % of the Company’s consolidated

revenue, respectively.

For the year ended July 31, 2022, three customers accounted for 46 %, 30 % and 22 % of the Company’s consolidated

revenue, respectively.

As of July 31, 2023, two customers accounted for

54 % and 46 % of the Company’s consolidated accounts receivable, respectively.

For the years ended July 31, 2023 and 2022, substantially

all of the Company’s revenues was generated from providing going public related consulting services to customers.

The risk is mitigated

by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

Company has a concentration of its revenues and receivables with specific customers.

For the year ended July 31, 2022, three customers

accounted for 46 %, 30 % and 22 % of the Company’s consolidated revenue, respectively.

For the year ended July 31, 2021, three customers

accounted for 41 %, 41 % and 11 % of the Company’s consolidated revenue, respectively.

the years ended July 31, 2022 and 2021, substantially all of the Company’s revenues was generated from providing going public related

consulting services to customers.

The risk is mitigated by the Company’s plan to transition its consulting services from the PRC

based customers to more international customers.

by the Company’s plan to transition its consulting services from the PRC based customers to more international customers.

Other risks and uncertainties

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

Company’s operations have been affected by the outbreak and spread of the coronavirus disease 2019 (COVID-19), which in March 2020,

was declared a pandemic by the World Health Organization.

The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures

of businesses.

The Company’s businesses have been negatively impacted by the COVID-19 coronavirus outbreak to a certain extent.

to the outbreak of COVID-19, in early February 2020, the Chinese government required the nationwide closure of many business activities

in the PRC to prevent the spread of COVID-19 and protect public health.

While the outbreak of COVID-19 has come under control in the

PRC since the second quarter of 2020, there was a significant rise in COVID-19 cases, including the COVID-19 Delta and Omicron variant

cases, in various cities in China in early 2022.

The local governments of the affected cities, including certain first-tier cities in

China, have reinstated certain COVID-related measures, including travel restrictions and stay-at-home orders.

of the Company’s existing customers have experienced financial distress and disruption of business, which resulted in delay or

default on their payments.

Nevertheless,

the continued uncertainties associated with COVID 19 may cause the Company’s revenue and cash flows to underperform in the next

A resurgence could negatively affect the execution of the going public consulting service agreements and the collection of

the payments from customers.

The extent of the future impact of COVID-19 is still highly uncertain and cannot be predicted as of the

financial statement reporting date.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all

expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable

and supportable forecasts.

This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial

assets measured at amortized cost.

ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements

to Topic 326, Financial Instruments—Credit Losses, Accounting Standards Update 2019-04 Codification Improvements to Topic

326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , and Accounting

Standards Update 2019-05, Targeted Transition Relief.

For public entities, ASU 2016-13 and its amendments are effective for fiscal

years, and interim periods within those fiscal years, beginning after December 15, 2019.

For all other entities, this guidance and

its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal

Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning

after December 15, 2018.

As an emerging growth company, the Company plans to adopt this guidance effective August 1, 2023.

The Company is currently evaluating the impact of its pending adoption of ASU 2016-13 on its consolidated financial statements.

November 2019, the FASB issued ASU 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging

(Topic 815), and Leases (Topic 842)” (“ASU 2019-10”).

ASU 2019-10 (i) provides a framework to stagger effective

dates for future major accounting standards and (ii) amends the effective dates for certain major new accounting standards to give

implementation relief to certain types of entities.

Specifically, ASU 2019-10 changes some effective dates for certain new standards

on the following topics in the FASB Accounting Standards Codification (ASC):

(a) Derivatives and Hedging (ASC 815) – now effective

for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021;

(b) Leases (ASC 842) – now effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal

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.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13,

Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held

at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

This replaces the

existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost.

2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit

Losses, Accounting Standards Update 2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses,

Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , and Accounting Standards Update 2019-05, Targeted Transition

For public entities, ASU 2016-13 and its amendments are effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2019.

fiscal years beginning after December 15, 2022, including interim periods within those fiscal years;

and (d) Intangibles —

Goodwill and Other (ASC 350) – now effective for fiscal years beginning after December 15, 2022, including interim periods

For all other entities, this guidance and its amendments will be effective for fiscal years

beginning after December 15, 2022, including interim periods within those fiscal years.

Early application will be permitted for all

entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

As an emerging growth

company, the Company plans to adopt this guidance effective August 1, 2023.

The Company does not expect the adoption of ASU 2016-13

will have a material impact on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-10,

“Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)” (“ASU

ASU 2019-10 (i) provides a framework to stagger effective dates for future major accounting standards and (ii) amends

the effective dates for certain major new accounting standards to give implementation relief to certain types of entities.

Specifically,

ASU 2019-10 changes some effective dates for certain new standards on the following topics in the FASB Accounting Standards Codification

(a) Derivatives and Hedging (ASC 815) – now effective for fiscal years beginning after December 15, 2020 and interim

periods within fiscal years beginning after December 15, 2021;

(b) Leases (ASC 842) – now effective for fiscal years beginning

after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021;

— Credit Losses (ASC 326) – now effective for fiscal years beginning after December 15, 2022, including interim periods

within those fiscal years;

The Company does not expect the cumulative effect resulting from the adoption of this guidance will have a

material impact on its consolidated financial statements.

issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Company’s consolidated results of

operations or financial position.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

4 – DISCONTINUED OPERATION OF LGC

January 29, 2021, the Company completed a disposition of 51.2 % of the equity interest of LGC.

The Company sold all of its shares of LGC

to Jiang Bo, Jiang Tao and Wang Di (collectively, the “Buyers”) in exchange for (i) 5,555,548 ordinary shares ( 1,111,110

ordinary shares retrospectively restated for accounting purposes for effect of reverse stock split on August 30, 2021) of the Company

owned by the Buyers and (ii) payment by the Buyers in the amount of $ 2,300,000 plus interest at an interest rate of 10 % per annum on

the unpaid amount if the principal amount of $ 2,300,000 is not paid by January 14, 2022.

As of July 31, 2022, the principal and accrued

and unpaid interest amounted to $ 2,654,767 .

All principal and accrued and unpaid interest shall be due on January 14, 2023 .

completion of the Disposition, the Company does not bear any contractual commitment or obligation to the media business or the employees

of LGC, nor to the Buyers.

January 29, 2021, management was authorized to approve and commit to a plan to sell LGC, therefore the major assets and liabilities relevant

to the disposal are reported as components of total assets and liabilities separate from those balances of the continuing operations.

At the same time, the results of all discontinued operations, less applicable income taxes, are reported as components of net loss separate

from the net loss of continuing operations in accordance with ASC 205-20-45.

The following is a reconciliation of net loss of $ 5.5 million

from disposition in the consolidated statements of operations and comprehensive loss:

Share consideration of 5,555,548 ordinary shares ( 1,111,110 ordinary shares retrospectively restated for accounting purposes for effect of reverse stock split on August 30, 2021), at $ 1.08 per share ($ 5.40 per share retrospectively restated for accounting purposes for effect of reverse stock split on August 30, 2021) on January 29, 2021

Cash consideration

Consideration in exchange for the disposal

Noncontrolling interest of LGC

Net liabilities (comprised of assets of $ 7,804,412 and liabilities of $ 11,001,011 )

Impairment of goodwill relating to discontinued operations

( 25,902,394 )

Impairment of intangible assets relating to discontinue operations

( 6,986,615 )

Amortization of intangible assets arising from acquisition of LGC

Net loss from disposal of discontinued operations

$ ( 5,483,738 )

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

4 – DISCONTINUED OPERATION OF LGC (continued)

following is a reconciliation of the carrying amounts of major classes of assets and liabilities held for sale in the consolidated balance

sheet as of January 29, 2021.

Carrying amounts of major classes of assets held for sale:

Accounts receivable

Other current assets

Property and equipment, net

Right of use assets

Other noncurrent assets

Total assets of disposal group

Carrying amounts of major classes of liabilities held for sale:

Short-term borrowings

Taxes payable

Other current liabilities

Lease liabilities

Total liabilities of disposal group

following is a reconciliation of the amounts of major classes of operations classified as discontinued operations in the consolidated

statements of operations and other comprehensive loss for the years ended July 31, 2022 and 2021.

the Years Ended

Discontinued Operations

Cost of revenues

( 1,557,277 )

Total operating expenses

( 1,714,341 )

Loss from operations

( 1,154,067 )

Impairment of goodwill and property and equipment

Total other income (expense), net

Income tax expenses

Net loss from discontinued operations, net of tax

( 1,142,160 )

Net loss from disposal of discontinued operations

( 5,483,738 )

Net Loss from Discontinued Operations

$ ( 6,625,898 )

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

5 – TERMINATION OF VIE AGREEMENTS WITH QIANHAI

January 4, 2021, the Company established an office in California, USA, through its wholly owned subsidiary ATIF Inc., a California

corporation, and launched, in addition to the business consulting services, additional service models consisting of asset

management, investment holding and media services to expand the Company’s business with a flexible business concept to achieve

a goal of high growth revenue and strong profit growth.

Clients located within United States will be serviced by ATIF Inc., while

clients outside United States will be supported by ATIF Inc.’s business center abroad.

Huaya Consultant (Shenzhen) Co., Ltd.

(“Huaya”), a wholly owned subsidiary of ATIF, will serve as ATIF Inc.’s business center in PRC for clients located

Huaya ceased to be the wholly owned subsidiary since May 31, 2022.

As part of streamlining the management chain and to

improve management control with a goal of lower costs, the Company transitioned the services from Qianhai to ATIF Inc.

and Huaya and

closed termination of the VIE agreements with Qianhai on February 3, 2021.

The termination of the Qianhai VIE agreement did not

discontinue the Company’s public listing related consulting service business, because such consulting service business has

been transferred to Huaya to serve the client located in China and ATIF Inc.

to serve the clients located within the United States.

There were no penalties or non-compete agreements derived from the termination of the Qianhai VIE agreements.

transferred all of its China-based business and employees to Huaya before termination of the VIE agreement.

The termination of the VIE

agreement did not cause material impairment of our long-lived assets (primarily including fixed assets such as office furniture and equipment

and automobile) because all of the fixed assets have been transferred to our PRC subsidiary Huaya upon termination of the VIE agreement

and there were no assets held for sale or disposal.

to the termination, operating revenue generated through Qianhai VIE amounted to $ 645,127 , and net loss amounted to $( 1,562,037 ) for the

year ended July 31, 2020, respectively, and net assets of Qianhai VIE amounted to $ 1,147,847 as of July 31, 2020.

of the date of termination, Qianhai had total assets of $ 266,235 and total liabilities of $ 656,417 , with a negative net assets of $ 0.4

million, the abstract amount accounted for 4 % of the consolidated net assets of the Company as of July 31, 2021.

In addition, Qianhai

generated net income of approximately $ 0.4 million, the abstract amount of which accounted for 5 % of consolidated net loss for the year

ended July 31, 2021.

The Company recorded a gain of $ 390,183 from the termination in the account of “other income (expenses), net”

in the consolidated statements of operations and comprehensive loss.

management believed the termination of Qianhai VIE agreements does not represent a strategic shift that has (or will have) a major effect

on the Company’s operations and financial results.

The termination is not accounted as discontinued operations in accordance with

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

6 – TRANSFER OF EQUITY INTEREST IN ATIF HK AND HUAYA

mitigate the potential risks arising from the PRC government provision of new guidance to and restrictions on China-based companies raising

capital offshore, the Company closed transfer of equity interest in ATIF HK and Huaya with Mr.

and (d) Intangibles — Goodwill and Other (ASC 350) – now effective for fiscal years beginning

after December 15, 2022, including interim periods within those fiscal years.

The Company does not expect the cumulative effect resulting

from the adoption of this guidance will have a material impact on its consolidated financial statements.

Recently issued ASUs by the FASB, except for the

ones mentioned above, have no material impact on the Company’s consolidated results of operations or financial position.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – TRANSFER OF EQUITY INTEREST

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 cash consideration of $ 50,000 .

Because the transfer

of equity of interest occurred on the first day of the year of 2023, ATIF GP did not contribute any revenues or net income (loss) to the

The Company determines that the transfer of equity

interest in ATIF GP did not have a major effect on its operations and financial results.

The Company also determines the transfer of equity

interest does not represent a strategic shift because it is not changing the way the Company operates its consulting services.

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.

the year ended July 31, 2023, the Company recorded a gain of $ 56,038 from

the transfer of equity interest as a component of “other income (expenses), net” in the consolidated statements of operations and

comprehensive loss.

NOTE 5 – TRANSFER OF EQUITY INTEREST

IN ATIF HK AND HUAYA

To mitigate the potential risks arising from the

PRC government provision of new guidance to and restrictions on China-based companies raising capital offshore, the Company closed transfer

of equity interest in ATIF HK and Huaya with Mr.

Pishan Chi for nil consideration on May 31, 2022.

The disposition of ATIF HK and Huaya did not discontinue the Company’s public listing related consulting service business,

as the Company would focus it continuous efforts on provision consulting service business to clients based in North America and other

There were no penalties or non-compete agreements derived from the disposition.

the period from August 1, 2021 through May 31, 2022, operating revenue generated through ATIF HK and Huaya amounted to $ 864,102 , and

net loss amounted to $( 871,958 ), respectively.

The revenues and net loss accounted for 52 % and 26 %, respectively, of consolidated revenue

and net loss for the year ended July 31, 2022.

As of May 31, 2022, net asset deficits of ATIF HK and Huaya amounted to $( 1,050,745 ), the

abstract amount accounted for 24 % of the consolidated net assets of the Company as of July 31, 2022.

The disposition of ATIF HK and Huaya

did not discontinue the Company’s public listing related consulting service business, as the Company would focus it continuous efforts

on provision consulting service business to clients based in North America and other areas.

There were no penalties or non-compete agreements

derived from the disposition.

For the period from August 1, 2021 through May

31, 2022, operating revenue generated through ATIF HK and Huaya amounted to $ 864,102 , and net loss amounted to $( 871,958 ), respectively.

The revenues and net loss accounted for 52 % and 26 %, respectively, of consolidated revenue and net loss for the year ended July 31, 2022.

As of May 31, 2022, net asset deficits of ATIF HK and Huaya amounted to $( 1,050,745 ), the abstract amount accounted for 24 % of the

consolidated net assets of the Company as of July 31, 2022.

The Company determines that the transfer of equity

5 unchanged sentences

The termination is not accounted as discontinued operations in accordance with ASC 205-20.

Company recorded a gain of $ 1,043,052 from the transfer of equity interest as a component of “other income (expenses), net”

in the consolidated statements of operations and comprehensive loss.

7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets from the Company’s continuing operations consisted of the following:

For the year ended July 31, 2022, the Company

recorded a gain of $ 1,043,052 from the transfer of equity interest as a component of “other income (expenses), net” in the

consolidated statements of operations and comprehensive loss.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – DUE FROM BUYERS OF LGC

29, 2021, the Company completed a disposition of 51.2 % of the equity interest of LGC.

The Company sold all of its shares of LGC to

Jiang Bo, Jiang Tao and Wang Di (collectively, the “Buyers”) in exchange for (i) 5,555,548 ordinary shares ( 1,111,110 ordinary

shares retrospectively restated for accounting purposes for effect of reverse stock split on August 30, 2021) of the Company owned by

the Buyers and (ii) payment by the Buyers in the amount of $ 2,300,000 plus interest at an interest rate of 10 % per annum on

the unpaid amount if the principal amount of $ 2,300,000 is not paid by January 14, 2022.

31, 2022, the principal and accrued and unpaid interest amounted to $ 2,654,767 .

All principal and accrued and unpaid interest shall be

due on January 14, 2023.

However the buyers of LGC failed to make payments to the Company.

For the year ended July 31, 2023, the

Company provided full provision of $ 2,654,767 against the balances due from buyers of LGC as the management assessed it is remote to collect

the outstanding balance.

NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT

Prepaid expenses and other current assets consisted

of the following:

As of July 31,

Prepayment for advertising service fee (a)

Prepaid service fees

Prepaid insurance service fee

Advance to vendors

1 unchanged sentence

These prepayments are typically expensed over the period when the services are performed.

8 – PROPERTY, PLANT AND EQUIPMENT, NET

and equipment, net, from the Company’s continuing operations, consisted of the following:

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT,

Property and equipment, net consisted of the following:

As of July 31,

2 unchanged sentences

Property and equipment, net

expense was $ 78,605 and $ 124,661 for the years ended July 31, 2022 and 2021, respectively.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

9 – INTANGIBLE ASSETS

intangible assets from the Company’s continuing operations consisted of the following:

For the year ended July 31, 2023, the Company

disposed vehicles with original value of $ 132,670 and net book value of $ 111,940 , and other equipment with original value of $ 15,471 and

net book value of $ 9,762 .

The Company received proceeds of $ 72,000 , and recognized loss of $ 49,702 on disposal of property and equipment.

Depreciation expense was $ 58,805 and $ 78,605 for

the years ended July 31, 2023 and 2022, respectively.

NOTE 9 – INTANGIBLE ASSETS

Net intangible assets consisted of the following:

As of July 31,

Financial and news platform

Financial and lease platform

accumulated amortization

Intangible assets

expense was $ 80,000 and $ 80,000 for the years ended July 31, 2022 and 2021, respectively.

10 – INVESTMENTS IN TRADING SECURITIES

Amortization expense was $ 80,000 and $ 80,000 for the years ended July 31,

2023 and 2022, respectively.

NOTE 10 – INVESTMENTS IN TRADING SECURITIES

of July 31, 2023 and 2022, the balance of investments in trading securities represented certain equity securities of listed companies

3 unchanged sentences

statement of operations and comprehensive loss.

For the years ended July 31, 2022 and 2021, the Company recorded a decrease in fair value

of $ 2,432,107 and $ 258,738 , respectively.

in trading securities consisted of the following:

For the years ended July 31, 2023 and 2022, the Company recorded an increase in fair value

of $ 192,102 and a decrease in fair value of $ 2,432,107 , respectively.

Investments in trading securities consisted of

the following:

As of July 31,

1 unchanged sentence

Trading securities invested by ATIF LP

11 – LONG-TERM INVESTMENT

the years ended July 31, 2022 and 2021, the long-term investment represented equity investment without readily determinable fair value

measured at measurement alternative and consisted of the following:

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – LONG-TERM INVESTMENTS

For the years ended July 31, 2022, the long-term

investment represented equity investment without readily determinable fair value measured at measurement alternative.

For the year ended

July 31, 2023, the Company sold the long-term investments at cost, and the Company had no long-term investments as of July 31, 2023.

As of July 31, 2023 and 2022, the long-term investments

consisted of the following:

As of July 31,

6 unchanged sentences

As of July 31, 2022, ATIF Investment made investment of $ 185,000 and acquired 0.49 % equity interest in Solarever.

Company accounted for the investment in privately held company using the measurement alternative at cost, less impairment, with subsequent

adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

As of July 31, 2022, the Company did not identify orderly transactions for similar investments of the investee, or any impairment indicators,

and the Company did not record upward or downward adjustments or impairment against the investment.

The Company accounted for the investment

in privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price

changes resulting from orderly transactions for identical or similar investments of the same issuer.

As of July 31, 2022, the Company

did not identify orderly transactions for similar investments of the investee, or any impairment indicators, and the Company did not record

upward or downward adjustments or impairment against the investment.

(b) In May 2022, ATIF Investment entered into an equity investment agreement with Armstrong, pursuant to which the Company would make investment of $ 2 million in exchange of 12 % equity interest in Armstrong.

1 unchanged sentence

As of July 31, 2022, ATIF Investment made investment of $ 150,000 and acquired 0.90 % equity interest in Armstrong.

Company accounted for the investment in privately held company using the measurement alternative at cost, less impairment, with subsequent

adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

As of July 31, 2022, the Company did not identify orderly transactions for similar investments of the investee, or any impairment indicators,

and the Company did not record upward or downward adjustments or impairment against the investment.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

12 – OPERATING LEASES

The Company accounted for the investment

in privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price

changes resulting from orderly transactions for identical or similar investments of the same issuer.

As of July 31, 2022, the Company

did not identify orderly transactions for similar investments of the investee, or any impairment indicators, and the Company did not record

upward or downward adjustments or impairment against the investment.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – OPERATING LEASES

Company leases offices space 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 associated with

the Company’s continuing operations for the years ended July 31, 2022 and 2021 was $ 460,649 and $ 616,113 , respectively.

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.

following table presents the operating lease related assets and liabilities recorded on the balance sheets of the Company’s continuing

operations as of July 31, 2022 and 2021.

year ended July 31, 2023, the Company entered into a car lease arrangement with a third party lessor with lease term of 48 months.

Company’s lease agreements do not contain any material residual value guarantees

or material restrictive covenants.

Rent expense for the years ended July 31, 2023 and 2022 was $ 497,746 and $ 460,649 , 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 July 31, 2023 and 2022.

As of July 31,

3 unchanged sentences

Total operating lease liabilities

weighted average remaining lease terms and discount rates for all of operating leases from the Company’s continuing operations

were as follows as of July 31, 2022 and 2021:

The weighted average remaining lease terms and

discount rates for all of operating leases were as follows as of July 31, 2023 and 2022:

As of July 31,

2 unchanged sentences

Weighted average discount rate

following is a schedule of maturities of lease liabilities as of July 31, 2022 and 2021:

The following is a schedule of maturities of lease

liabilities as of July 31, 2023 and 2022:

As of July 31,

3 unchanged sentences

Present value of lease liabilities

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

13 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

expenses and other current liabilities, from the Company’s continuing operations, consisted of the following:

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – ACCRUED EXPENSES AND OTHER

CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

As of July 31,

Investment securities payable (a)

Due to a third party (b)

Investment securities payable

Due to a third party

Accrued legal consulting expenses

Accrued payroll expenses

Accrued legal liabilities (c)

(a) During the year ended July 31, 2022, ATIF LP borrowed certain investment securities from an investment bank as a trading strategy.

As of July 31, 2022, the balance represented the fair value of investment securities owned to the investment bank.

(b) The balance due to a third party represented the proceeds collected from a third party, which purchased portion of the Company’s long-term investments.

As of July 31, 2022, the purchase was not closed and the Company recorded the proceeds in the account of accrued expenses and other current liabilities.

(c) The balance of accrued legal liabilities represented the amount due to Huale Group Co., Limited (“Huaya”), which filed the arbitration with the Court against Huaya and requested a refund of consulting service fee in 2017.

On September 25, 2020, the Court issued a final judgment ruling in favor of Huale and required Huaya to return a deposit of $ 250,000 to Huale and pay arbitration fee and counterclaim fee of $ 11,724 (RMB 81,844 ).

Based on the Court ruling, the Company accrued legal liabilities of $ 261,724 for the year ended July 31, 2020.

May 2022, the Company transferred equity interest in ATIF HK and Huaya.

Accordingly the Company was no longer obligated to

such liabilities since then.

14 – RELATED PARTY TRANSACTIONS

May 31, 2022, Huaya became a related party of the Company upon transfer of equity interest in Huaya to Mr.

Pishan Chi, who was a former

CEO of the Company.

In May 2022, Huaya engaged the Company to provide consulting services for its customer.

For the year ended July 31,

2022, the Company recognized revenues of $ 762,000 from Huaya.

As of July 31, 2022, the Company had accounts receivable of $ 762,000 due

the year ended July 31, 2021, the Company did not enter into transactions with related parties.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

Business Tax and related surcharges

on September 1, 2012, a pilot program (the “Pilot Program”) for transition from the imposition of PRC business tax (“Business

Tax”) to the imposition of VAT for revenues from certain industries and certain cities.

On May 1, 2016, the transition from

the imposition of Business Tax to the imposition of VAT, was expanded to all industries in China.

Huaya qualifies as a Small and Low

Profit Enterprise, and is subject to a preferential VAT of 3 % and related surcharges on VAT payable at a rate of 12 % since that date.

(b) Corporate

Income Taxes (“CIT”)

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.

Virgin Islands

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

HK is subject to Hong Kong profits tax at a rate of 16.5 %.

However, ATIF HK did not generate any assessable profits arising in or derived

from Hong Kong for the fiscal years ended July 31, 2022 and 2021, and accordingly no provision for Hong Kong profits tax has been

made in these periods.

PRC Corporate Income Tax (“CIT”) is calculated based on the taxable income determined under the applicable CIT Law and its

implementation rules, which became effective on January 1, 2008.

CIT Law imposes a unified income tax rate of 25 % for all resident

enterprises in China, including both domestic and foreign invested enterprises.

Huaya qualifies as a Small and Low Profit Enterprise,

and is subject to a preferential EIT of 10 %.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

15 – TAXES (continued)

the US jurisdiction, ATIF Inc., ATIF GP, ATIF LP 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.

the years ended July 31, 2022 and 2021, no current and deferred income tax expenses were associated with the Company’s continuing

following table reconciles the statutory federal rate of 21 % for the years ended July 31, 2022 and 2021 to the Company’s effective

tax rate associated with the Company’s continuing operations:

NOTE 14 – DEFERRED REVENUE

As of July 31, 2023 and 2022, 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 July 31, 2023 and 2022, the Company had deferred

revenues of $ 70,000 and $ 90,785 , respectively.

For the years ended July 31, 2023 and 2022, $ 20,785

and $ nil of advance from customer balance as of July 31, 2022 and 2021 were recognized as revenues in the year ended July 31, 2023 and

2022, respectively.

NOTE 15 – 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 years ended July 31, 2023 and

2022, or recorded balances as of July 31, 2023 and 2022:

Relationship with the Company

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

As of July 31,

Provision of consulting services to related parties

Asia International Securities Exchange Co., Ltd.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 – RELATED PARTY

TRANSACTIONS (CONTINUED)

3) Balances with related parties

As of July 31, 2023 and 2022, the balances due

from related parties were as follows:

As of July 31,

Accounts receivable*:

Asia International Securities Exchange Co., Ltd.

Other receivable*:

* 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 July 31, 2023 and 2022, the balances due

to related parties were as follows:

As of July 31,

Other payables:

Asia International Securities Exchange Co., Ltd.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – 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.

ATIF HK is incorporated in Hong Kong and is subject

to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant

Hong Kong tax laws.

The applicable tax rate for the first HKD$ 2 million of assessable profits is 8.25 % and assessable profits above HKD$ 2

million will continue to be subject to the rate of 16.5 % for corporations in Hong Kong, effective from the year of assessment 2018/2019.

ATIF HK did not generate any assessable profits

arising in or derived from Hong Kong for the period from August 1, 2021 through May 31, 2022 when the Company transferred its equity interests

Accordingly no provision for Hong Kong profits tax has been made in the period.

The PRC Corporate Income Tax (“CIT”)

is calculated based on the taxable income determined under the applicable CIT Law and its implementation rules, which became effective

on January 1, 2008.

CIT Law imposes a unified income tax rate of 25 % for all resident enterprises in China, including both domestic

and foreign invested enterprises.

Huaya qualifies as a Small and Low Profit Enterprise, and is subject to a preferential EIT of 10 % for

the period from August 1, 2021 through May 31, 2022 when the Company transferred its equity interests in Huaya.

For the US jurisdiction, ATIF Inc., ATIF BC, ATIF

BM, ATIF GP, ATIF LP 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 year ended July 31, 2023, the Company

incurred current income tax expenses of $ 31,200 , including federal income tax expenses of $ 22,800 and state income tax expenses of $ 8,400 ,

respectively.

For the year ended July 31, 2022, the Company did not incur income tax expenses.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – TAXES (continued)

The following table reconciles the statutory federal

rate of 21 % for the years ended July 31, 2023 and 2022 to the Company’s effective tax rate:

For the Years Ended

3 unchanged sentences

Permanent difference on non-deductible expenses

Utilization of the Net Operating Loss (“NOL”) from prior years

Utilization of net operation losses brought forward

Change in valuation allowance

Effective tax rate

Company’s deferred tax assets associated with its continuing operations are comprised of the following:

As of July 31,

Deferred tax assets

Allowance for doubtful account

Net operating loss carry forwards

Deferred tax assets before valuation allowance

valuation allowance

( 1,668,413 )

Net deferred tax assets

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.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

15 – TAXES (continued)

Company’s deferred tax assets primarily derived from the net operating loss (“NOL”) and allowance for doubtful accounts.

For the year ended July 31, 2022 and 2021, the Company suffered net operating losses due to reduced 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 July 31, 2022 and 2021, 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

Company’s taxes payable from its continuing operations consists of the following:

The Company’s deferred tax assets (liabilities)

are comprised of the following:

As of July 31,

Value added tax payable

Income tax payable

Other taxes payable

Total taxes payable

tax positions

Net operating losses

Operating lease

Property, equipment and others

Gross deferred tax assets

valuation allowance

Deferred tax assets, net of valuation allowance

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 years ended July 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 July 31, 2023 and 2022, management

believes that the realization of the deferred tax assets appears to be uncertain and may not be realizable in the near future.

a 100 % valuation allowance has been provided against the deferred tax assets.

Uncertain tax positions

Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.

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.

and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes.

is subject to income taxes in the PRC.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three

years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent.

The statute of limitations

is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000.

In the case of transfer

pricing issues, the statute of limitation is ten years.

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.

step is to measure the tax benefit as the largest amount that is more than 50 % likely of being realized upon settlement.

penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes.

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 July 31, 2022 and 2021 and the Company does not believe that its unrecognized tax benefits will change over the next

twelve months.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

Company was incorporated under the laws of the British Virgin Islands on January 5, 2015.

Prior to the Reorganization, the Company

was authorized to issue up to 100,000,000 ordinary shares with par value of $ 0.0004 per share and 50,000,000 shares were issued at par

On August 21, 2018, the Company amended its Memorandum of Association and passed corporate authorizations to redeem

and cancel the 50,000,000 issued shares and simultaneously increased the number of the authorized shares to 100,000,000,000 and increased

the par value of each share to $0.001.

In connection with the cancellation of the 50,000,000 shares, the Company issued 50,000 shares

to the controlling shareholders at $0.001 per share.

cancelled in disposition of LGC

January 29, 2021, the Company completed a disposition of 51.2 % of the equity interest of LGC.

The Company sold all of its shares of LGC

to Jiang Bo, Jiang Tao and Wang Di (collectively, the “Buyers”) in exchange for (i) 5,555,548 ordinary shares of the Company

owned by the Buyers and (ii) payment by the Buyers in the amount of $2,300,000 (Note 4).

The Company bought back and subsequently cancelled

those 5,555,548 ordinary shares.

August 23, 2021, we completed a five (5) for one (1) reverse stock split (the “Reverse Split”) of our issued and outstanding

ordinary shares, par value $ 0.001 per share.

From a BVI legal perspective, the Reverse Split applied to the issued shares of the Company

on the date of the Reverse Split and does not have any retroactive effect on the Company’s shares prior that date.

accounting purposes only (with no BVI legal effect), references to our ordinary shares in this annual report are stated as having been

retroactively adjusted and restated to give effect to the Reverse Split, as if the Reverse Split had occurred by the relevant earlier

a BVI legal perspective, the Reverse Split applied to the issued shares of the Company on the date of the Reverse Split and does not

have any retroactive effect on the Company’s shares prior that date.

However, for accounting purposes only (with no BVI legal effect),

references to our ordinary shares in this annual report are stated as having been retroactively adjusted and restated to give effect

to the Reverse Split, as if the Reverse Split had occurred by the relevant earlier date.

connection with the Reverse Split, the Company issued 6,076 ordinary shares as fractional shares in September 2021.

October 2021, the investors, who subscribed for ordinary shares in the registered direct offering closed in November 2020, exercised

warrants to purchase 389,855 ordinary shares at cash consideration of $ 1,068,203 .

In January 2022, these investors also cashlessly exercised

warrants to purchase 70,131 ordinary shares.

of July 31, 2022 and 2021, the Company had a total of 9,627,452 and 9,161,390 ordinary shares issued and outstanding.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

16 – EQUITY (continued)

reserve and restricted net assets

the Company’s subsidiary incorporated the PRC, is required to make appropriations to certain reserve funds, comprising the statutory

surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted

accounting principles of the PRC (“PRC GAAP”).

Appropriations to the statutory surplus reserve are required to be at least

10 % of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50 % of the entity’s registered

Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors.

The statutory reserve

may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered

capital, but are not distributable as cash dividends.

payment of dividends by entities organized in China is subject to limitations, procedures and formalities.

Regulations in the PRC currently

permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in

The results of operations reflected in the consolidated financial statements prepared in accordance with U.S GAAP may differ from

those in the statutory financial statements of the WFOEs and VIEs.

Remittance of dividends by a wholly foreign-owned company out of China

is subject to examination by the banks designated by State Administration of Foreign Exchange.

light of the foregoing restrictions, Huaya is restricted in its ability to transfer their net assets to the Company.

Foreign exchange

and other regulations in the PRC may further restrict its subsidiary in the PRC from transferring funds to the Company in the form of

dividends, loans and advances.

of July 31, 2021, the restricted amounts as determined pursuant to PRC statutory laws totaled $ 355,912 and total restricted net

assets from the Company’s continuing operations amounted to $ 962,374 , respectively.

of July 31, 2022, the statutory reserve balance was $ 355,912 , and total restricted net assets of the Company was $ nil due to the

There were no uncertain tax positions as of July 31, 2023 and 2022 and the Company does not believe that its unrecognized tax benefits

will change over the next twelve months.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – EQUITY

Ordinary Shares

The Company was incorporated under the laws of

the British Virgin Islands on January 5, 2015.

Prior to the Reorganization, the Company was authorized to issue up to 100,000,000

ordinary shares with par value of $ 0.0004 per share and 50,000,000 shares were issued at par value.

On August 21, 2018, the Company

amended its Memorandum of Association and passed corporate authorizations to redeem and cancel the 50,000,000 issued shares and simultaneously

increased the number of the authorized shares to 100,000,000,000 and increased the par value of each share to $ 0.001 .

In connection with

the cancellation of the 50,000,000 shares, the Company issued 50,000 shares to the controlling shareholders at $0.001 per share.

Reverse stock split

On August 23, 2021, we completed a five (5) for

one (1) reverse stock split (the “Reverse Split”) of our issued and outstanding ordinary shares, par value $ 0.001 per share.

From a BVI legal perspective, the Reverse Split applied to the issued shares of the Company on the date of the Reverse Split and does

not have any retroactive effect on the Company’s shares prior that date.

However, for accounting purposes only (with no BVI legal

effect), references to our ordinary shares in this annual report are stated as having been retroactively adjusted and restated to give

effect to the Reverse Split, as if the Reverse Split had occurred by the relevant earlier date.

From a BVI legal perspective, the Reverse Split

applied to the issued shares of the Company on the date of the Reverse Split and does not have any retroactive effect on the Company’s

shares prior that date.

However, for accounting purposes only (with no BVI legal effect), references to our ordinary shares in this annual

report are stated as having been retroactively adjusted and restated to give effect to the Reverse Split, as if the Reverse Split had

occurred by the relevant earlier date.

In connection with the Reverse Split, the Company

issued 6,076 ordinary shares as fractional shares in September 2021.

In October 2021, the investors, who subscribed

for ordinary shares in the registered direct offering closed in November 2020, exercised warrants to purchase 389,855 ordinary shares

at cash consideration of $ 1,068,203 .

In January 2022, these investors also cashlessly exercised warrants to purchase 70,131 ordinary shares.

As of July 31, 2023 and 2022, the Company had

a total of 9,627,452 and 9,627,452 ordinary shares issued and outstanding.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – EQUITY (continued)

Statutory reserve and restricted net assets

Huaya, the Company’s subsidiary incorporated

the PRC, is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus

reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”).

Appropriations to the statutory surplus reserve are required to be at least 10 % of the after-tax net income determined in accordance with

PRC GAAP until the reserve is equal to 50 % of the entity’s registered capital.

Appropriations to the discretionary surplus reserve

are made at the discretion of the Board of Directors.

The statutory reserve may be applied against prior year losses, if any, and may

be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends.

The payment of dividends by entities organized

in China is subject to limitations, procedures and formalities.

Regulations in the PRC currently permit payment of dividends only out

of accumulated profits as determined in accordance with accounting standards and regulations in China.

The results of operations reflected

in the consolidated financial statements prepared in accordance with U.S GAAP may differ from those in the statutory financial statements

of the WFOEs and VIEs.

Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated

by State Administration of Foreign Exchange.

In light of the foregoing restrictions, Huaya

is restricted in its ability to transfer their net assets to the Company.

Foreign exchange and other regulations in the PRC may further

restrict its subsidiary in the PRC from transferring funds to the Company in the form of dividends, loans and advances.

As of July 31, 2023 and 2022, the statutory

reserve balance of $ 355,912 were reclassified to accumulated losses, and total restricted net assets of the Company was $ nil due to the

disposal of Huaya in May 2022 (Note 5).

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

17 – CONTIGENCIES

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”)

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.

April 2020, the Company acquired 51.2 % equity interest in LGC after LGC terminated its efforts to launch an IPO on its own.

alleged that the acquisition transaction between the Company and LGC was entered into during the lockup period of the exclusive agreement

between Boustead and LGC, and therefore deprived Boustead of compensation that Boustead would otherwise have been entitled to receive

under its exclusive agreement with 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.

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.

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.

ATIF HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 – 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.

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,

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.

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

1 unchanged sentence

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.

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.

5 unchanged sentences

Briefing on the Company’s motion to compel concluded on August 23, 2022.

The Court has yet to rule on that

Boustead is also seeking a default judgment against LGC and recently filed an order to show cause for default judgment against

The Court has not ruled on Boustead’s request for entry of default judgment against LGC.

ATIF is currently evaluating how it will respond

to Boustead’s motion for leave.

In sum, the Boustead litigation is currently in the pleadings stage.

Our management believes it

is premature to assess and predict the outcome of this pending litigation.

HOLDINGS LIMITED

TO CONSOLIDATED FINANCIAL STATEMENTS

18 – SUBSEQUENT EVENTS

a new consulting agreement with a customer

August 12, 2022, the Company entered into a consulting agreement (the “Consulting Agreement”) with Massimo Motor Sports,

LLC, a Texas limited liability company (“Massimo”) and with an effective date of August 10, 2022.

Pursuant to the Consulting

Agreement, Massimo agreed to engage the Company as an independent consultant and ATIF agreed to provide Massimo with consulting services,

including but not limited to the following:

(i) conducting due diligence on Massimo;

(ii) assisting Massimo in identifying required suitable

qualified professional service provider firms to support Massimo’s contemplated transition into a public company;

(iii) working

with other professional advisor parties engaged by Massimo in completing all necessary tasks required for the process of going public;

(iv) assisting Massimo in identifying any person that can add value to Massimo’s strategy and business;

and (v) assisting Massimo

on an on-going basis in meeting public reporting requirements for six months after Massimo goes public.

exchange for the services to be provided by the Company pursuant to the Consulting Agreement, Massimo agreed to pay the Company a total

of $ 800,000 , with $ 300,000 paid within five days of execution of the Consulting Agreement, another installment of $ 300,000 paid upon

the Company’s completion of conducting due diligence services for Massimo, $ 100,000 paid upon the Company’s completion of

assisting Massimo in the selection and negotiation of third-party institutions, and another installment of $ 100,000 paid within three

days of Massimo’s successful initial public offering.

Massimo further agreed to reimburse the Company under the Consulting Agreement

for travel expenses in connection with the activities performed under the Consulting Agreement.

into a sales agreement of ATIF GP

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.

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.

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

Boustead had filed the Motion for Contract Interpretation Determination.

ATIF filed its opposition to that Motion on October

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures