What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-11-13 compared with 2023-11-13 · 295 added, 334 removed, 51 unchanged (93% of the section changed)

2 unchanged sentences

Market for Ordinary shares

Our Ordinary Shares have been listed on the Nasdaq

Capital Market since May 3, 2019, under the symbol “ATIF.”

Ordinary Shares have been listed on the Nasdaq Capital Market since May 3, 2019, under the symbol “ATIF.”

Holders of Record of Ordinary Shares

of November 13, 2023, we had approximately 29 shareholders of

record for our ordinary shares.

The foregoing number of shareholders of record does not include an unknown number of shareholders

who hold their shares in “street name.”

As of November 12, 2024, we had approximately 34 shareholders of record

for our ordinary shares.

The foregoing number of shareholders of record does not include an unknown number of shareholders who hold their

shares in “street name.”

Dividend Policy

We do not intend to pay dividends for the foreseeable

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect

to declare or pay any dividends in the foreseeable future.

As a result, you may only receive a return on your investment in our Ordinary

Shares if the market price of our Ordinary Shares increases.

do not intend to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to finance the operation

and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.

As a result, you may only

receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases.

Purchases of Equity Securities

Neither we nor any “affiliated purchaser,”

as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity securities during the period covered by this

annual report.

we nor any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity

securities during the period covered by this annual report.

Securities Authorized for Issuance Under Equity

Compensation Plans.

Sales of Unregistered Securities

In the three years preceding the filing of this

registration statement, we issued the securities described below without registration under the Securities Act.

Unless otherwise indicated

below, the securities were issued pursuant to the private placement exemption provided by Section 4(a)(2) of the Securities Act and Regulation

D promulgated thereunder.

On November 6, 2020, in a private placement, we

sold to three accredited investors 869,565 Ordinary Shares and warrants to purchase a total of 869,565 Ordinary Shares at an exercise

price of $4.60 per share which are exercisable for five years from the date of issuance.

We also issued to the placement agent warrants

to purchase 78,261 ordinary shares at an exercise price equal to $4.60 and are exercisable 180 days after November 3, 2020.

- MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion should be read in conjunction

with the Consolidated Financial Statements and Notes thereto contained in this Annual Report on Form 10-K.

Some of the statements contained

in the following discussion of the Company’s financial condition and results of operations refer to future expectations or include

other “forward-looking” information.

Those statements are subject to known and unknown risks, uncertainties and other factors

that could cause the actual results to differ materially from those contemplated, including, but not limited to, those discussed in Part

I, Item 1A of this report under the heading “Risk Factors,” which are incorporated herein by reference.

Note regarding Forward-Looking Statements” included in this Report on Form 10-K for a discussion of factors to be considered when

evaluating forward-looking information detailed below.

These factors could cause our actual results to differ materially from the forward-looking

Recent Sales of Unregistered Securities

the three years preceding the filing of this registration statement, we issued the securities described below without registration under

the Securities Act.

Unless otherwise indicated below, the securities were issued pursuant to the private placement exemption provided

by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

On April 16, 2024, the Company entered into a

Securities Purchase Agreement (the “April 16 Purchase Agreement”) with a non- U.S investor named in the Purchase Agreement

(the “Purchaser”), pursuant to which the Company agreed to sell an aggregate of 1,092,512 newly issued ordinary shares of

the Company, $0.001 par value per ordinary share (the “Ordinary Shares”) at a purchase price of $1.23 per share (the “April

16 Private Placement”).

In connection with the Private Placement, the Company received gross proceeds in the amount of $1,343,789.76.

April 18, 2024, the Company entered into two securities purchase agreements (the “April 18 Purchase Agreements”) in a

private placement (the “April 18 Private Placement”) of the Company’s 813,010 newly issued ordinary shares, par

value $0.001 per ordinary share, with one (1) U.S.

accredited investor, as defined under Rule 501 of Regulation D, and one (1)

investor (individually, an “Investor” and collectively, the “Investors”), at the purchase price of

$1.23 per ordinary share.

The Company received gross proceeds in the amount of $1,000,002.38 in connection with the Private

Each of the April 18 Purchase Agreements and April

16 Purchase Agreement contained customary representations, warranties and covenants by the parties for offerings of similar sizes.

Company agreed that within a reasonable time after the Closing, the Company shall file a registration statement on Form S-3 (or other

appropriate form if the Company is not then S-3 eligible) providing for the resale by the Investors of the purchased ordinary shares.

We are filing the registration statement of which this prospectus forms a part to satisfy this obligation.

On April 29, 2024, the Company entered into a

deferred salary conversion agreement (“ Deferred Salary Conversion Agreement ”) with Mr.

Jun Liu, the president, chief

executive officer and chairman of the board of directors of the Company.

Pursuant to the Agreement, the Company agreed

to issue and Mr.

Liu agreed to accept 384,478 ordinary shares (“ Deferred Salary Debt Shares ”), $0.001 par value in

lieu of an unpaid salary of $349,875 owed to Mr.

Liu at a per share price of $0.91 which was the Nasdaq consolidated closing bid price

per share of the Company’s ordinary shares on April 29, 2024.

- MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion should

be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in this Annual Report on Form 10-K.

of the statements contained in the following discussion of the Company’s financial condition and results of operations refer to

future expectations or include other “forward-looking” information.

Those statements are subject to known and unknown risks,

uncertainties and other factors that could cause the actual results to differ materially from those contemplated, including, but not limited

to, those discussed in Part I, Item 1A of this report under the heading “Risk Factors,” which are incorporated herein by reference.

See “Special Note regarding Forward-Looking Statements” included in this Report on Form 10-K for a discussion of factors to

be considered when evaluating forward-looking information detailed below.

These factors could cause our actual results to differ materially

from the forward-looking statements.

Business Overview

We offer financial consulting services to small

and medium-sized enterprise customers in Asia and North America.

Our goal is to become an international financial consulting company with

clients and offices throughout Asia.

Since our inception in 2015, the focus of our consulting business has been providing comprehensive

going public consulting services designed to help SMEs become public companies on suitable markets and exchanges.

On January 4, 2021, we established an office in

California, USA, through our wholly owned subsidiary ATIF Inc., a California corporation, and launched, in addition to our business consulting

services, additional service models consisting of asset management, investment holding and media services to expand our business with

a flexible business concept to achieve a goal of high growth revenue and strong profit growth.

Reverse Split

On August 12, 2021, our Board of Directors approved

a reverse stock split (the “Reverse Split”) of our issued and outstanding ordinary shares, par value $0.001 per share, at

a ratio of 1 -for-5so that every five (5) shares issued and outstanding on the date of the Reverse Split was combined into one (1) ordinary

share, US$0.005 par value.

Shareholders otherwise entitled to receive a fractional share as a result of the reverse stock split will receive

a whole share in lieu of such factional share, as relevant.

Both before and after completion of the Reverse Split, the Company is

and will be authorized to issue 100,000,000,000 ordinary shares of US$0.001 par value each.

As a result of the Reverse Split, the Company’s

issued and outstanding ordinary shares was reduced from 45,806,952 ordinary shares of US$0.001 par value each to approximately 9,161,390

ordinary shares of par value $0.005 per share.

On August 23, 2021, we amended our Memorandum of Association and Articles of Association

in connection with our one -for- five reverse stock split to amend the par value back to $0.001 per ordinary share.

Our ordinary shares,

as adjusted per the Reverse Split, began trading on the Nasdaq Capital Market on August 30, 2021.

Recent Updates

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 California of the United States, respectively.

On August 1, 2022, ATIF

USA entered into and closed a Sale and Purchase Agreement (the “Agreement”) with Asia Time (HK) International Finance Service

Limited (the “Buyer”), pursuant to which the Company sold all of its equity interest in ATIF GP for cash consideration of

US$50,000 (the “Agreement”).

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.

The termination is not accounted

as discontinued operations in accordance with ASC 205-20.

Upon the closing of the Agreement, ATIF GP is no longer our subsidiary and ATIF

USA ceased to be the investment manager of ATIF LP.

As of July 31, 2023,

we had one reporting segment, which is the provision of financial consulting services.

We offer financial consulting

services to small and medium-sized enterprise customers in Asia and North America.

Our goal is to become an international financial consulting

company with clients and offices throughout Asia.

Since our inception in 2015, the focus of our consulting business has been providing

comprehensive going public consulting services designed to help SMEs become public companies on suitable markets and exchanges.

On January 4, 2021, we established

an office in California, USA, through our wholly owned subsidiary ATIF Inc., a California corporation, and launched, in addition to our

business consulting services, additional service models consisting of asset management, investment holding and media services to expand

our business with a flexible business concept to achieve a goal of high growth revenue and strong profit growth.

Our financial consulting services

Currently we provide consulting services to the

companies based in North America seeking listing in U.S..

Currently we provide consulting

services to the companies based in North America seeking listing in U.S..

We launched our consulting services in 2015.

Our aim was to assist Chinese enterprises

by filling the gaps and forming a bridge between PRC companies and overseas stock markets and exchanges.

We have a team of qualified and

experienced personnel with legal, regulatory, and language expertise in several jurisdictions outside the U.S.

Our services were designed

to help small and medium-sized enterprises (“SME”) in China achieve their goal of becoming public companies.

we shifted our geographic focus from China to North America emphasizing on helping mid and small companies in North America become public

companies on the U.S.

Our aim was to

assist Chinese enterprises by filling the gaps and forming a bridge between PRC companies and overseas stock markets and exchanges.

have a team of qualified and experienced personnel with legal, regulatory, and language expertise in several jurisdictions outside the

Our services were designed to help small and medium-sized enterprises (“SME”) in China achieve their goal of becoming

public companies.

In May 2022, we shifted our geographic focus from China to North America emphasizing on helping mid and small companies

in North America become public companies on the U.S.

capital markets.

We would create a going public strategy for each client based on many factors of such client, including

our assessment of the client’s financial and operational situations, market conditions, and the client’s business and financing

requirements.

Since our inception and up to the date of this report, we have successfully helped three Chinese enterprises to be quoted

OTC markets and are currently assisting our other clients in their respective going public efforts.

Most of our current and

past clients have been Chinese, U.S.

and Mexican companies, and we plan to expand our operations to other Asian countries, such as Malaysia,

Vietnam, and Singapore with continuing focus on the North American market in the coming years.

For the years ended July 31,

2023 and 2022, we provided consulting services to three and three customers, respectively, which primarily engaged the Company to

provide consulting services relating to going public in the US through IPO, reverse merger and acquisition.

On May 31, 2022, we completed

the transfer of our equity interest in ATIF HK and Huaya, through which we provided consulting services to Chinese companies.

to focus on providing consulting services to customers based in North America and other areas and intend to continue cooperating with

Huaya in connection with the expansion and provision of our business services in China.

From April 2022 through the date of this report,

the Company entered into consulting agreements with five customers, among which four are based in the North America.

total revenue generated from consulting services amounted to $2.5 million and $1.7 million for the years ended July 31, 2023 and 2022,

respectively.

We would create a going public strategy for each client based on

many factors of such client, including our assessment of the client’s financial and operational situations, market conditions, and

the client’s business and financing requirements.

Since our inception and up to the date of this report, we have successfully helped

nine Chinese enterprises to be quoted on the U.S.

OTC markets and are currently assisting our other clients in their respective going

public efforts.

Most of our current and past clients have been Chinese, U.S.

and Mexican companies, and we plan to expand our operations

to other Asian countries, such as Malaysia, Vietnam, and Singapore with continuing focus on the North American market in the coming years.

For the fiscal years ended

July 31, 2024 and 2023, we provided consulting services to eight and three customers, respectively, which primarily engaged the Company

to provide consulting services relating to going public in the US through IPO, reverse merger and acquisition.

We focus on providing consulting

services to customers based in North America and other areas and intend to continue cooperating with Huaya in connection with the expansion

and provision of our business services in China.

From April 2022 through the date of this report, the Company entered into consulting

agreements with nine customers, among which three are based in the North America.

Our total revenue generated

from consulting services amounted to approximately $0.6 million and $2.5 million for the fiscal years ended July 31, 2024 and 2023, respectively.

Key Factors that Affect our Business

We believe the following key factors may affect

our consulting services:

Our business success depends on our

ability to acquire customers effectively.

Our customer acquisition

channels primarily include our sales and marketing campaigns and existing customer referrals.

In order to acquire customers, we have made

significant efforts in building mutually beneficial long-term relationships with local government, academic institutions, and local business

associations.

We believe the following key

factors may affect our consulting services:

Our business success depends on our ability to acquire customers

Our customer acquisition channels

primarily include our sales and marketing campaigns and existing customer referrals.

In order to acquire customers, we have made significant

efforts in building mutually beneficial long-term relationships with local government, academic institutions, and local business associations.

In addition, we also market our consulting services through social media, such as WeChat and Weibo.

If any of our current

customer acquisition channels becomes less effective, we are unable to continue to use any of these channels or we are not successful

in using new channels, we may not be able to attract new customers in a cost-effective manner or convert potential customers into active

customers or even lose our existing customers to our competitors.

To the extent that our current customer acquisition and retention efforts

become less effective, our service revenue may be significantly impacted, which would have a significant adverse effect on our revenues,

financial condition, and results of operations.

Our consulting business faces strong

If any of our current customer acquisition

channels becomes less effective, we are unable to continue to use any of these channels or we are not successful in using new channels,

we may not be able to attract new customers in a cost-effective manner or convert potential customers into active customers or even lose

our existing customers to our competitors.

To the extent that our current customer acquisition and retention efforts become less effective,

our service revenue may be significantly impacted, which would have a significant adverse effect on our revenues, financial condition,

and results of operations.

Our consulting business faces strong market competition.

We are currently facing intense

market competition.

are currently facing intense market competition.

Some of our current or potential competitors have significantly more financial, technical,

marketing, and other resources than we do and may be able to devote greater resources to the development, promotion, and support of their

customer acquisition and retention channels.

In light of the low barriers to entry into the financial consulting industry, we expect more

players to enter this market and increase the level of competition.

Our ability to differentiate our services from other competitors will

have a significant impact on our business growth in the future.

Our business depends on our ability

to attract and retain key personnel.

We rely heavily on the expertise and leadership

of our directors and officers to maintain our core competence.

Under their leadership, we have been able to achieve rapid expansion and

significant growth since our inception in 2015.

As our business scope increases, we expect to continue to invest significant resources

in hiring and retaining a deep talent pool of financial consultancy professionals.

Our ability to sustain our growth will depend on our

ability to attract qualified personnel and retain our current staff.

Some of our current or potential competitors have significantly more financial, technical, marketing, and other resources

than we do and may be able to devote greater resources to the development, promotion, and support of their customer acquisition and retention

In light of the low barriers to entry into the financial consulting industry, we expect more players to enter this market and

increase the level of competition.

Our ability to differentiate our services from other competitors will have a significant impact on

our business growth in the future.

Our business depends on our ability to attract and retain key

We rely heavily on the expertise

and leadership of our directors and officers to maintain our core competence.

Under their leadership, we have been able to achieve rapid

expansion and significant growth since our inception in 2015.

As our business scope increases, we expect to continue to invest significant

resources in hiring and retaining a deep talent pool of financial consultancy professionals.

Our ability to sustain our growth will depend

on our ability to attract qualified personnel and retain our current staff.

Results of Operations

The following table summarizes the results of

our operations for the years ended July 31, 2023 and 2022, respectively, and provides information regarding the dollar and percentage

increase or (decrease) during such periods.

The following table summarizes

the results of our operations for the fiscal years ended July 31, 2024 and 2023, respectively, and provides information regarding the

dollar and percentage increase or (decrease) during such periods.

For the years ended

1 unchanged sentence

Revenues – a related party

Cost of revenues

$ (1,830,000 )

Operating expenses:

1 unchanged sentence

General and administrative expenses

Provision against accounts receivable due from a related party

(Reversal of provision) provision against accounts receivable due from a related party

Total operating expenses

2 unchanged sentences

Interest income, net

Other income (expenses), net

Other (expenses) income, net

Provision against due from buyers of LGC

Gain (loss) from investment in trading securities

(Loss) gain from investment in trading securities

Gain from disposal of subsidiaries and VIE

4 unchanged sentences

$ (2,882,299 )

Our total revenue increased

by $0.8 million, or 47%, from $1.7 million in fiscal year 2022, to $2.5 million in fiscal year 2023, primarily attributable to an increase

of $0.5 million from consulting services to related parties.

The increase in revenues from related parties

was primarily because we provided consulting services to more customers on behalf of related parties.

For the year ended July 31, 2023,

we provided consulting services to two customers on behalf of a related party, while for the same period ended July 31, 2022, we provided

consulting services to one customer on behalf of a related party.

Cost of revenues.

We incurred cost

of revenues of $0.7 million in the year ended July 31, 2022 which was mainly incurred for direct costs including purchase of a shell company

on the over-the-counter (“OTC”) market and consulting expenses for one customer.

For the year ended July 31, 2023, we did

not incur such expenses.

Selling expenses.

total revenue decreased by approximately $1.8 million, or 75%, from approximately $2.5 million in fiscal year 2023, to approximately $0.6

million in fiscal year 2024, primarily attributable to a decrease of approximately $0.7 million and $1.1 million, respectively, from consulting

services to third parties and related parties.

The decrease in revenues from

third parties was primarily because we provided listing related consulting services for seven customers and earned consulting service

fees of approximately $0.4 million for the fiscal year ended July 31, 2024, while we provided phase completed phase I and phase II services

for two customers and earned consulting service fees of approximately $1.2 million for the fiscal year ended July 31, 2023.

I and phase II service fees are higher than listing related consulting services, because the phase I and phase II services take longer

The decrease in revenues from

related parties was primarily because we provided consulting services to less customers on behalf of related parties.

For the fiscal year

ended July 31, 2024 and 2023, we provided consulting services to one and two customers on behalf of a related party, respectively.

Selling expenses.

decreased by $0.4 million, or 64%, from $0.6 million in year ended July 31, 2022 to $0.2 million in the same period ended July 31, 2023.

Our selling expenses primarily consisted of outsourced service fees charged by third-party service providers, business development expenses,

potential customer referral commissions, salary and welfare expenses of our business development team, and business travel expenses.

decrease in our selling expenses was primarily due to a decrease of $0.3 million in consulting expenses.

For the year ended July 31, 2023,

the Company identified potential customers on its own and did not engage consultants to develop new customers.

Accordingly, the Company

did not incur consulting expenses for the year ended July 31, 2023.

As a percentage of sales, our selling expenses

were 8% and 34% of our total revenues for the years ended July 31, 2023 and 2022, respectively.

and administrative expenses.

Our general and administrative expenses decreased by $0.4 million,

or 15%, from $2.7 million in fiscal year 2022 to $2.2 million in fiscal year 2023.

Our general and administrative expenses primarily

consisted of salary and welfare expenses of management and administrative team, office expenses, operating lease expenses.

in general and administrative expenses was primarily because the general and administrative expenses of the year 2022 included the expenses

of $0.4 million incurred by ATIF HK and Huaya, the equity interest in which were transferred in May 2022.

As a percentage of sales, our general and administrative

expenses were 91% and 159% of our total revenues for the years ended July 31, 2023 and 2022, respectively.

Provision against due from buyers of LGC.

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.

The balance due from buyers

of LGC arose from our disposition of 51.2% of the equity interest of LGC in January 2021.

Provision against accounts receivable due

from a related party.

For the year ended July 31, 2023, the Company provided full provision

expenses increased by approximately $0.1 million, or 61%, from approximately $0.2 million in year ended July 31, 2023 to approximately

$0.3 million in the same period ended July 31, 2024.

Our selling expenses primarily consisted of promotion and advertising expenses.

increase in our selling expenses was primarily due to an increase of amortization expenses of approximately $0.1 million for TV promotion

As a percentage of sales,

our selling expenses were 54% and 8% of our total revenues for the fiscal years ended July 31, 2024 and 2023, respectively.

General and administrative

Our general and administrative expenses kept stable at $2.3 million and $2.2 million For the fiscal years ended July

31, 2024 and 2023, respectively.

Our general and administrative expenses primarily consisted of salary and welfare expenses of management

and administrative team, professional expenses, office expenses, operating lease expenses.

The increase in general and administrative

expenses was primarily due to an increase of legal expenses of approximately $0.5 million for legal proceedings with both Boustead Securities,

LLC and J.P Morgan Securities LLC, partially offset by a decrease of approximately $0.2 million in rental expenses because we modified

an office lease agreement, a decrease of approximately $0.1 million in payroll expenses because we adjusted monthly payroll expenses to

Jun Liu from $20,000 to $1 since February 2024, and a decrease of approximately $0.1 million in office expenses.

As a percentage of sales,

our general and administrative expenses were 365% and 91% of our total revenues for the fiscal years ended July 31, 2024 and 2023, respectively.

(Reversal of provision)

provision against accounts receivable due from a related party.

For the fiscal year ended July 31, 2023, we provided full provision

of $762,000 against the accounts receivable due from Huaya as the management assessed it is remote to collect the outstanding balance.

For the year ended July 31, 2023, interest income arose from bank deposits.

For the year ended July 31, 2022, interest income represented 1) the interest income of $0.4 million from outstanding balance of $2.3

million due from buyers of LGC arising from the Company’s disposition of 51.2% equity interest in LGC.

The interest rate for outstanding

balance was 10% per annum, and 2) the minimal interest income from bank deposits.

(loss ) from investment in trading securities.

Loss from investment in trading securities represented fair value changes from investment in trading securities, which was measured

at market price.

For the years ended July 31, 2023 and 2022, we recorded an investment gain of $0.2 million and a loss of $2.4 million,

respectively.

from disposal of subsidiaries .

For the year ended

July 31, 2023, the Company reported a gain of approximately $56,000 from disposal of ATIF GP.

For the year ended July 31, 2022, the Company

reported a gain of $1.0 million from disposal of ATIF HK and Huaya.

For the fiscal year ended July 31, 2024, we reversed provision of $19,103 because Huaya paid salary expenses of $19,103 on our behalf.

Provision against due

from buyers of LGC.

For the fiscal year ended July 31, 2023, we 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.

The balance due from buyers of LGC arose

from our disposition of 51.2% of the equity interest of LGC in January 2021.

We did not incur such expenses for the fiscal year ended

July 31, 2024.

Loss (gain) from investment

in trading securities.

Loss (gains) from investment in trading securities represented fair value changes from investment in trading

securities, which was measured at market price.

For the fiscal years ended July 31, 2024 and 2023, we recorded an investment loss of approximately

$0.4 million and an investment gain of approximately $0.2 million, respectively.

Income taxes.

We are incorporated

in the British Virgin Islands.

Under the current laws of the British Virgin Islands, we 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 July 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.

was incorporated in the PRC.

Under the Income Tax Laws of the PRC, Huaya is subject to income tax at a rate of 10% under the preferential

tax treatment to Smaller-scale Taxpayers for the year ended July 31, 2022.

ATIF Inc, ATIF GP, ATIF LP, ATIF BD, ATIF BC and

ATIF BM were established in the U.S and 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%.

We 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 were both passed in 2020, No material impact on the ATIF US is expected based on our analysis.

We will continue to

monitor the potential impact going forward.

tax expense was $31,200 for the year ended July 31, 2023 because

our USA subsidiaries were making taxable income during the

year of 2023.

Income tax expense was $nil for the years ended July 31, 2022 due to significant net operating loss in fiscal year of 2022

which resulted in taxable losses.

As a result of foregoing,

net loss was $2.9 million for the year ended July 31, 2023, a decrease of $0.5 million from net loss of $3.4 million in fiscal year

We are incorporated in the British Virgin Islands.

Under the current laws of the British Virgin Islands, we 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 Inc, ATIF BD, ATIF BC

and ATIF BM were established in the U.S and 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%.

We 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 were both passed in 2020, No material impact on the ATIF US is expected based on our analysis.

will continue to monitor the potential impact going forward.

tax expense was $3,300 for the fiscal years ended July 31, 2024, because three of our US subsidiaries are subject to state taxes during

the year of 2024.

Income tax expense was $31,200 for the fiscal years ended July 31, 2023, because our USA subsidiaries were making taxable income

during the year of 2023.

a result of foregoing, net loss was approximately $3.2 million for the fiscal year ended July 31, 2024, an increase of $0.3 million from

net loss of $2.9 million in fiscal year 2023.

Liquidity and Capital Resources

date, we have financed our operations primarily through cash flows from operations, working capital loans from our major shareholders,

proceeds from our initial public offering, and equity financing through public offerings of our securities.

We plan to support our future

operations primarily from cash generated from our operations and cash on hand.

However, the Company may need to raise the cash flow from

related parties, and there is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all.

To date, we have financed

our operations primarily through cash flows from operations, working capital loans from our major shareholders, proceeds from our initial

public offering, and equity financing through public offerings of our securities.

We plan to support our future operations primarily from

cash generated from our operations and cash on hand.

However, the Company may need to raise the cash flow from related parties, and there

is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all.

Liquidity and Going concern

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 from continuing operations of 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 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.

We have not declared nor paid any cash dividends

to our shareholders.

For the years ended July 31,

2024 and 2023, the Company reported a net loss of approximately $3.2 million and $2.9 million, respectively, and operating cash outflows

approximately $0.1 million and $2.3 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

Because of losses from operations, cash out from operating activities, and the requirement of additional capital to fund

our current operating plan at July 31, 2024, these factors indicate the existence of an uncertainty that raises substantial doubt about

the Company’s ability to continue as a going concern.

As of July 31, 2024, the Company

had cash of $1.2 million, short-term investment in trading securities of $0.4 million, due from a related party of $0.9 million and accounts

receivables of $0.2 million due from a related party, which were highly liquid.

On the other hand, the Company had current liabilities

of $1.0 million.

The Company’s cash on hand could well cover the current liabilities.

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.

The 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

We have not declared nor paid

any cash dividends to our shareholders.

We do not plan to pay any dividends out of our restricted net assets as of July 31, 2024.

We have limited financial obligations denominated

dollars, thus the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material

impact on our liquidity, financial condition, and results of operations.

The following table sets forth summary of our

cash flows for the years indicated:

The following table sets forth summary of our cash

flows for the years indicated:

For the Years Ended

Net cash used in by operating activities

$ (2,333,899 )

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Effect of exchange rate change on cash

Net decrease in cash

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net increase (decrease) in cash

Cash, beginning of year

1 unchanged sentence

Operating Activities

Net cash used in operating activities was $2.3

million in fiscal year ended July 31, 2023.

Net cash used in operating activities was primarily comprised of net loss of $2.9 million,

adjusted for provision of $2.7 million against due from buyers of LGC, and provision of $0.8 million against accounts receivable due from

a related party, and net changes in our operating assets and liabilities, principally comprising of (i) an increase of accounts receivable

of $0.7 million due from third parties and $0.6 million due from a related party, respectively.

The increase was in line with increase

of revenues, and (ii) a decrease of accrued expenses and other current liabilities of $2.0 million as the Company was no longer liable

to an investment bank for loss making since disposal of ATIF GP.

Net cash used in operating activities was $0.1

million in fiscal year ended July 31, 2022.

Net cash used in operating activities was primarily comprised of net loss of $3.4 million,

adjusted for loss of $2.4 million from investment in trading securities, and net changes in our operating assets and liabilities, principally

comprising of an increase of accounts receivable of $0.8 million due from a related party, and an increase of accrued expenses and other

current liabilities of $1.8 million as the Company is liable to an investment bank for loss making during the year ended July 31, 2022.

cash used in operating activities was approximately $0.1 million in fiscal year ended July 31, 2024.

Net cash used in operating

activities was primarily comprised of net loss of approximately $3.2 million, adjusted for loss of approximately $0.4 million from

investment in trading securities, and net changes in our operating assets

and liabilities, principally comprising of (i) a decrease of accounts receivable of approximately $0.7 million due

from third parties and $0.4 million due from a related party, respectively.

The decrease was because we collected outstanding

balance due from customers, (ii) a decrease of prepaid expenses and other current assets of approximately $0.3 million, which was

due to amortization of advertising service fees, and (iii) an increase of accrued expenses and other current liabilities of

approximately $1.3 million.

Net cash used in operating

activities was approximately $2.3 million in fiscal year ended July 31, 2023.

Net cash used in operating activities was primarily

comprised of net loss of approximately $2.9 million, adjusted for provision of approximately $2.7 million against due from buyers of LGC,

and provision of approximately $0.8 million against accounts receivable due from a related party, and net changes in our operating assets

and liabilities, principally comprising of (i) an increase of accounts receivable of approximately $0.7 million due from third parties

and approximately $0.6 million due from a related party, respectively.

The increase was in line with increase of revenues, and (ii) a

decrease of accrued expenses and other current liabilities of approximately $2.0 million as the Company was no longer liable to an investment

bank for loss making since disposal of ATIF GP.

Investing Activities

Net cash provided by investing activities was

$0.4 million in fiscal year 2023, primarily consisting of proceeds of $0.3 million from disposal of investments in two equity securities,

redemption of $94,799 from short-term investments, proceeds of $72,000 from disposal of property and equipment, and collection of loans

of $59,000 from a related party, partially offset against loans of $0.1 million made to a related party.

Net cash used in investing activities was $1.6

million in fiscal year 2022, primarily consisting of purchase of investment of $1.4 million in listed equity securities, investment of

$0.3 million in two equity securities, partially offset against proceeds of $0.2 million from disposal of property and equipment.

Net cash used in investing

activities was approximately $1.6 million in fiscal year 2024, primarily consisting of loans of approximately $0.9 million made to a related

party and investment of approximately $0.7 million in trading securities.

Net cash provided by investing

activities was approximately $0.4 million in fiscal year 2023, primarily consisting of proceeds of approximately $0.3 million from disposal

of investments in two equity securities, redemption of $94,799 from short-term investments, proceeds of $72,000 from disposal of property

and equipment, and collection of loans of $59,000 from a related party, partially offset against loans of approximately $0.1 million made

to a related party.

Financing Activities

Net cash provided by financing activities was

$0.7 million in fiscal year 2023, which was provided by borrowings of $0.7 million from a related party.

Net cash used in financing activities was $2.0

million in fiscal year 2022, primarily consisting of payment of $3.0 million to three limited partners of ATIF LP, as withdrawal of investment,

partially offset by proceeds of $1.1 million in relation to exercise of warrants by investors who subscribed for ordinary shares offered

in registered direct offering which closed in November 2020.

Accounting Policies and Estimate

We prepare our audited consolidated financial

statements in accordance with U.S.

GAAP, which requires our management to make estimates that affect the reported amounts of assets, liabilities

and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses

during the reporting periods.

As a result, management is required to routinely make judgments and estimates about the effects of matters

that are inherently uncertain.

Net cash provided by financing

activities was approximately $2.3 million in fiscal year 2024, which was provided by proceeds of approximately $2.3 million from issuance

of ordinary shares pursuant to a private placement

Net cash provided by financing

activities was approximately $0.7 million in fiscal year 2023, which was provided by borrowings of approximately $0.7 million from a related

Critical Accounting Policies and Estimate

We prepare our audited consolidated

financial statements in accordance with U.S.

GAAP, which requires our management to make estimates that affect the reported amounts of

assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of

revenues and expenses during the reporting periods.

As a result, management is required to routinely make judgments and estimates about

the effects of matters that are inherently uncertain.

Actual results may differ from these estimates under different conditions or assumptions.

Critical accounting policy is both material to

the presentation of financial statements and requires management to make difficult, subjective or complex judgments that could have a

material effect on financial condition or results of operations.

Accounting estimates and assumptions may become critical when they are

material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such

matters to change, and that have a material impact on financial condition or operating performance.

Critical accounting estimates are estimates that

require us to make assumptions about matters that were highly uncertain at the time the accounting estimate were made and if different

estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely occur

from period to period, have a material impact on the presentation of our financial condition, changes in financial condition or results

of operations.

Due to the level of activity and lack of complex transactions, we believe there are currently no critical accounting policies

and estimates that affect the preparation of our financial statements.

Critical accounting policy

is both material to the presentation of financial statements and requires management to make difficult, subjective or complex judgments

that could have a material effect on financial condition or results of operations.

Accounting estimates and assumptions may become critical

when they are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility

of such matters to change, and that have a material impact on financial condition or operating performance.

Critical accounting estimates

are estimates that require us to make assumptions about matters that were highly uncertain at the time the accounting estimate were made

and if different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably

likely occur from period to period, have a material impact on the presentation of our financial condition, changes in financial condition

or results of operations.

Due to the level of activity and lack of complex transactions, we believe there are currently no critical accounting

policies and estimates that affect the preparation of our financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company we are not required

to provide the information required by this item.

a smaller reporting company we are not required to provide the information required by this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

The financial statements required by this item

begin on page F-1 with the index to financial statements followed by the financial statements.

financial statements required by this item begin on page F-1 with the index to financial statements followed by the financial statements.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

1 unchanged sentence

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 5. Market for Registrant’s Common Equity