UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number: 001-38876

ATIF HOLDINGS LIMITED

(Exact Name of Registrant as Specified in Its Charter)

British Virgin Islands		Not Applicable
(State of Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

420 Goddard, Irvine, CA		92618
(Address of Principal Executive Offices)		(ZIP Code)

308-888-8888

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Ordinary Shares		ATIF		The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ YES ☐ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO

Indicate the number of shares outstanding of each of the issuer’s classes of stock, as of the latest practicable date.

As of June 6, 2025, there were 17,317,452 of the registrant’s ordinary shares issued and outstanding.

TABLE OF CONTENTS

	Page

PART I-FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23
PART II-OTHER INFORMATION	24
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Mine Safety Disclosures	25
Item 5. Other Information	25
Item 6. Exhibits	26
SIGNATURES	27

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements. The statements herein which are not historical reflect our current expectations and projections about the Company’s future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our interpretation of what we believe to be significant factors affecting our business, including many assumptions about future events. Such forward-looking statements include statements regarding, among other things:

●

our ability to produce, market and generate sales of our products and services;

●

our ability to develop and/or introduce new products and services;

●

our projected future sales, profitability and other financial metrics;

●

our future financing plans;

●

our anticipated needs for working capital;

●

the anticipated trends in our industry;

●

our ability to expand our sales and marketing capability;

●

acquisitions of other companies or assets that we might undertake in the future;

●

competition existing today or that will likely arise in the future; and

●

other factors discussed elsewhere herein.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “will,” “plan,” “could,” “target,” “contemplate,” “predict,” “potential,” “continue,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these or similar words. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue the Company’s operations. These statements may be found under Part I, Item 2-“Management’s Discussion And Analysis Of Financial Condition And Results Of Operations,” as well as elsewhere in this Quarterly Report on Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, matters described in this Quarterly Report on Form 10-Q.

In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact occur.

Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Such statements are presented only as a guide about future possibilities and do not represent assured events, and we anticipate that subsequent events and developments will cause our views to change. You should, therefore, not rely on these forward-looking statements as representing our views as of any date after the date of this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q also contains estimates and other statistical data prepared by independent parties and by us relating to market size and growth and other data about our industry. These estimates and data involve a number of assumptions and limitations, and potential investors are cautioned not to give undue weight to these estimates and data. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report on Form 10-Q. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk.

Potential investors should not make an investment decision based solely on our projections, estimates or expectations.

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ATIF HOLDINGS LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

	Apr 30, 2025			Jul 31, 2024
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		6,681,402			1,249,376
Accounts receivable		250,000
Accounts receivable - a related party					200,000
Deposits		-			3,000
Investments in securities		1,134,482			424,148
Due from related parties		600,000			900,000
Prepaid expenses and other current assets		22,091			122,224
Total current assets		8,687,975			2,898,748

Property and equipment, net		-			60,047
Right-of-use lease assets, net		-			53,793
Total Assets		8,687,975			3,012,588

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities		8,088			957,057
Taxes payable		19,985			19,985
Lease liabilities, current		-			11,375
Current portion of long-term payables		250,000			-
Total current liabilities		278,073			988,417

Lease liabilities, noncurrent		-			20,417
Long-term payables		-			250,000
Total liabilities		278,073			1,258,834

Commitments

Equity
Ordinary shares, $0.001 par value, 100,000,000,000 shares authorized, 17,317,452 shares and 11,917,452 shares issued and outstanding as of April 30, 2025 and July 31, 2024, respectively		17,317			11,917
Additional paid-in capital		43,110,304			32,599,985
Accumulated deficit		(34,717,719	)		(30,858,148	)
Total Shareholders’ Equity		8,409,902			1,753,754
Total Liabilities and Shareholders’ Equity		8,687,975			3,012,588

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

ATIF HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the three months ended April 30, 2025						For the nine months ended April 30,
	2025			2024			2025			2024
	(unaudited)			(unaudited)			(unaudited)			(unaudited)

Revenues	$	250,000		$	200,000		$	450,000		$	350,000

Operating expenses
Selling expenses		-			(86,000	)		(120,000	)		(251,000	)
General and administrative expenses		(439,012	)		(635,282	)		(1,390,918	)		(1,824,577	)
Total operating expenses		(439,012	)		(721,282	)		(1,510,918	)		(2,075,577	)

Loss from operations		(189,012	)		(521,282	)		(1,060,918	)		(1,725,577	)

Other income (expenses)
Interest (expenses) income		-			-			(15	)		23
Other income (expense)		-			23,215			(260,046	)		223,120
Loss from investment in trading securities		(1,400,028	)		(309,521	)		(2,538,592	)		(338,255	)
Total other income, net		(1,400,028	)		(286,306	)		(2,798,653	)		(115,112	)

Loss before income taxes		(1,589,040	)		(807,588	)		(3,859,571	)		(1,840,689	)

Income tax provision		-			-			-			-
Net loss and comprehensive loss	$	(1,589,040	)		(807,588	)	$	(3,859,571	)	$	(1,840,689	)

Loss per share – basic and diluted	$	(0.09	)		(0.08	)	$	(0.28	)	$	(0.19	)

Weighted Average Shares Outstanding – Basic and diluted		17,246,441			9,799,195			13,808,661			9,670,270

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

ATIF HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2025 AND 2024

For the three months ended April 30, 2025 and 2024

	Ordinary Share				Additional paid in		Accumulated
	Shares		Amount		capital		deficit			Total
Balance as at January 31, 2025 (unaudited)		15,737,452		15,737		40,982,060		(33,128,679	)		7,869,118
Net loss for the period		-		-		-		(1,589,040	)		(1,589,040	)
Issuance of ordinary shares		1,580,000		1,580		680,294		-			681,874
Issuance of warrants		-		-		1,447,950		-			1,447,950

Balance as at April 30, 2025 (unaudited)		17,317,452		17,317		43,110,304		(34,717,719	)		8,409,902

Balance as at January 31, 2024 (unaudited)		9,627,452		9,627		29,196,350		(28,699,725	)		506,252
Issuance of ordinary shares pursuant to a private placement		1,905,522		1,906		2,341,886		-			2,343,792
Issuance of ordinary shares to settle payroll payable due to a management		384,478		384		349,491		-			349,875
Waive of liabilities by a related party		-		-		712,258		-			712,258
Net loss for the period		-		-		-		(807,588	)		(807,588	)

Balance as at April 30, 2024 (unaudited)		11,917,452		11,917		32,599,985		(29,507,313	)		3,104,589

For the nine months ended April 30, 2025 and 2024

	Ordinary Share				Additional paid in		Accumulated
	Shares		Amount		capital		deficit			Total
Balance as at July 31, 2024		11,917,452		11,917		32,599,985		(30,858,148	)		1,753,754
Net loss for the period		-		-		-		(3,859,571	)		(3,859,571	)
Capital contribution		-		-		3,611,000		-			3,611,000
Issuance of ordinary shares		5,400,000		5,400		5,451,369		-			5,456,769
Issuance of warrants		-		-		1,447,950		-			1,447,950

Balance as at April 30, 2025 (unaudited)		17,317,452		17,317		43,110,304		(34,717,719	)		8,409,902
				-		-		-			-
Balance as at July 31, 2023		9,627,452		9,627		29,196,350		(27,666,624	)		1,539,353
Issuance of ordinary shares pursuant to a private placement		1,905,522		1,906		2,341,886					2,343,792
Issuance of ordinary shares to settle payroll payable due to a management		384,478		384		349,491		-			349,875
Waive of liabilities by a related party		-		-		712,258		-			712,258
Net loss for the period		-		-		-		(1,840,689	)		(1,840,689	)

Balance as at April 30, 2024 (unaudited)		11,917,452		11,917		32,599,985		(29,507,313	)		3,104,589

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

ATIF HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the nine months ended April 30,
	2025			2024
Cash flows from operating activities:	(unaudited)			(unaudited)

Net loss	$	(3,859,571	)		(1,840,689	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		6,282			89,007
Amortization of right of use assets		9,000			265,042
Loss on disposal of property and equipment		53,765			-
Loss from early termination of an operating lease		13,000			7,600
Loss from investment in trading securities		2,538,592			338,255
Changes in operating assets and liabilities:
Accounts receivable		(50,000	)		450,000
Accounts receivable - related parties		-			600,000
Deposits		3,000			(13,000	)
Prepaid expenses and other current assets		100,133			214,846
Deferred revenue		-			(70,000	)
Taxes payable		-			(14,515	)
Accrued expenses and other current liabilities		(948,969	)		178,994
Lease liabilities		-			(289,728	)
Net cash used in operating activities		(2,134,768	)		(84,188	)

Cash flows from investing activities:
Purchases of property and equipment		-			(5,086	)
Investment in short-term investments		362,075			(446,674	)
Loans made to a related party		-			(317,710	)
Collection of borrowings from a related party		300,000			20,000
Net cash provided by (used in) investing activities		662,075			(749,470	)

Cash Flows from Financing Activities:
Proceeds from issuance of ordinary shares		6,904,719			2,343,792
Net cash provided by financing activities		6,904,719			2,343,792

Effect of Exchange Rate Changes on Cash		-			-

Net increase in Cash		5,432,026			1,510,134
Cash, beginning of period		1,249,376			606,022
Cash, end of period	$	6,681,402			2,116,156
Check
Supplemental disclosure of cash flow information:
Cash paid for interest expenses	$	-			-
Cash paid for income tax	$	-			14,515

Supplemental disclosure of Non-cash financing activities
Issuance of ordinary shares to settle payroll payable due to a management	$	-			349,875
Waive of liabilities by a related party		-			712,258
Disposal of right-of-use assets with decrease of operating lease obligations		-			799,232
Capital contribution from a shareholder in the form of trading securities	$	3,611,000			-

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

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

ATIF Holdings Limited (“ATIF” or the “Company”), formerly known as Eternal Fairy International Limited and Asia Times Holdings Limited, was incorporated under the laws of the British Virgin Islands (“BVI”) on January 5, 2015, as a holding company to develop business opportunities in the People’s Republic of China (the “PRC” or “China”). The Company adopted its current name on March 7, 2019. The Company is primarily engaged in providing business advisory and financial consulting services to small and medium-sized enterprise customers.

As of April 30, 2025 the Company’s unaudited condensed consolidated financial statements reflect the operating results of the following entities:

Name of Entity	Date of Incorporation	Place of Incorporation	% of Ownership	Principal Activities
Parent company:
ATIF Holdings Limited (“ATIF”)	January 5, 2015	British Virgin Islands	Parent	Investment holding
Wholly owned subsidiaries of ATIF
ATIF Inc. (“ATIF USA”)	October 26, 2020	USA	100%	Consultancy and information technology support
ATIF Investment LLC (“ATIF Investment”)	April 25, 2022	BVI	100%	Consultancy and information technology support
ATIF BD	December 22, 2021	USA	100% owned by ATIF USA	Consultancy and information technology support
ATIF BC	October 6, 2022	USA	100% owned by ATIF USA	Consultancy and information technology support
ATIF BM	October 6, 2022	USA	100% owned by ATIF USA	Consultancy and information technology support

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

The unaudited condensed consolidated balance sheets as of April 30, 2025 and for the unaudited condensed consolidated statement of operations and comprehensive loss for the three and nine months ended April 30, 2025 and 2024 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended July 31, 2024, which was filed with the SEC on November 13, 2024.

In the opinion of the management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended July 31, 2024. The results of operations for the three and nine months ended April 30, 2025 and 2024 are not necessarily indicative of the results for the full years.

The unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Liquidity and going concern

For the nine months ended April 30, 2025 and 2024, the Company reported a net loss of approximately $3.9 million and $1.8 million, respectively, and operating cash outflows approximately $2.1 million and approximately $0.08 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. Because of a history of net losses from operations, cash out from operating activities, and the requirement of additional capital to fund our current operating plan at April 30, 2025, these factors indicate the existence of an uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern.

In January 2025, the Company issued and sold 3,820,000 ordinary shares to certain non-affiliated institutional investors at a price of US$1.25 per share for gross proceeds of US$4.8 million. The Company recorded net proceeds of approximately $4.8 million.

In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of US$1 per share, and pre-funded warrants to purchase up to 887,553 Ordinary Shares, and in a concurrent private placement, restricted warrants to purchase an aggregate of up to 2,467,553 Ordinary Shares to certain non-affiliated institutional investors for gross proceeds of US$2.5 million. The Company recorded net proceeds of approximately $2.1 million.

As of April 30, 2025, the Company had cash of approximately $6.7 million, short-term investments in trading securities of approximately $1.1 million and due from a related party of $0.6 million, which were highly liquid. On the other hand, the Company had current liabilities of approximately $0.3 million. The Company’s cash and short-term investments in trading securities 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 accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Use of Estimates

In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the condensed 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.

Accounts Receivable, net

On August 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of the guidance had no impact on the allowance for credit losses for accounts receivable.

After the adoption of ASU 2016-13, The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the condensed consolidated statements of operations and comprehensive loss. The Company uses loss-rate methods to estimate allowance for credit loss. The Company assesses collectability by reviewing accounts receivable on an individual basis because the Company had limited customers and each of them has difference characteristics, primarily based on business line and geographical area. In determining the amount of the allowance for credit losses, the Company multiplied the loss rate with the amortized cost of accounts receivable. The loss rate refers to the corporate default rate published by credit rating companies, which considers current economic conditions, reasonable and supportable forecasts of future economic conditions. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 condensed consolidated statements of operations and comprehensive income (loss), according to ASC 321 “Investments — Equity Securities”. During the nine months ended April 30, 2025 and 2024, 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. In addition, during the nine months ended April 30, 2025, the Company was also granted ordinary shares of a listed company as capital contribution from a shareholder. The Company initially accounted for the share as “investment in trading securities” at fair value by reference to the prevailing market price on shares grant date, and subsequently measure the share awards at fair value. For the three months ended April 30, 2025 and 2024, the Company recognized a loss of $1,400,028 and $309,521 from investments in trading securities, respectively. For the nine months ended April 30, 2025 and 2024, the Company recognized a loss of $2,538,592 and $338,255 from investments in trading securities, 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.

Fair value of investment in trading securities are based on quoted prices in active markets. The carrying amounts of the Company’s other financial instruments including cash and cash equivalents, accounts receivable due from a related party, deposits, due from related parties, 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 and long-term payable, fair value approximates their carrying value at the year-end as the interest rates used to discount the host contracts approximate market rates. For the three and nine months ended April 30, 2025 and 2024, there are no transfers between different levels of inputs used to measure fair value.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”).

To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

For the three and nine months ended April 30, 2025 and 2024, the Company primarily generated revenues from consulting services to customers who would like to go public.

The Company provides various consulting services to its members, especially to those who have the intention to be publicly listed in the stock exchanges in the United States and other countries. The Company categorizes its consulting services into three Phases:

Phase I consulting services primarily include due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and recommendations. Management estimates that Phase I normally takes about three months to complete based on its past experience.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition (continued)

Phase II consulting services primarily include reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s recommendation. Management estimates that Phase II normally takes about eight months to complete based on its past experience.

Phase III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction; assistance in preparation of customers’ public filings for IPO or reverse merger transactions; and assistance in answering comments and questions received from regulatory agencies. Management believes it is very difficult to estimate the timing of this phase of service as the completion of Phase III services is not within the Company’s control.

Each phase of consulting services is stand-alone and fees associated with each phase are clearly identified in service agreements. Revenue from providing Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase as the Company’s performance obligations related to these services are carried out over the whole duration of each Phase. Revenue from providing Phase III consulting services to customers is recognized upon completion of the reverse merger transaction or IPO transaction when the Company’s promised services are rendered and the Company’s performance obligations are satisfied. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the balance sheet.

Depending on the complexity of the underlying service arrangement and related terms and conditions, significant judgments, assumptions, and estimates may be required to determine when substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions, and estimates regarding contracts executed in any specific period.

Income Taxes

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of April 30, 2025. As of April 30, 2025, all of the Company’s income tax returns for the tax years ended December 31, 2019 through December 31, 2023 remain open for statutory examination by relevant tax authorities.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Segment reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is Dr. Kamran Khan, 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 April 30, 2025 and July 31, 2024, which is the consulting service business.

Risks and Uncertainty

(a) Credit risk

As of April 30, 2025, the Company held cash and cash equivalents of $6,681,402 deposited in the banks located in the U.S., which were insured by FDIC up to $250,000.

(b) Concentration risk

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

The Company has a concentration of its revenues and receivables with specific customers. For the three months ended April 30, 2025, one customer accounted for 100% of the Company’s consolidated revenue. For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company’s consolidated revenue, respectively. For the three months ended April 30, 2024, one customer accounted for 100% of the Company’s consolidated revenue. For the nine months ended April 30, 2024, two customers accounted for 71% and 17% of the Company’s consolidated revenue, respectively.

As of April 30, 2025, one customer accounted for 100% of the Company’s consolidated accounts receivable. As of July 31, 2024, one related party customer accounted for 100% of the Company’s consolidated accounts receivable.

For the three and nine months ended April 30, 2025 and 2024, substantially all of the Company’s revenues was generated from providing going public related consulting services to customers. The Company plans to mitigate the risks by transitioning its consulting services from the PRC based customers to more international customers.

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 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (the “SEC”) Regulation S-X 210.4-08(h), Rules of General Application — General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is in the process of evaluating the impact of ASU 2023-09 on the consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — Codification Amendments in Response to SEC’s Disclosure Update and Simplification Initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows — Overall, 250-10 Accounting Changes and Error Corrections — Overall, 260-10 Earnings Per Share — Overall, 270-10 Interim Reporting — Overall, 440-10 Commitments — Overall, 470-10 Debt — Overall, 505-10 Equity — Overall, 815-10 Derivatives and Hedging — Overall, 860-30 Transfers and Servicing — Secured Borrowing and Collateral, 932-235 Extractive Activities — Oil and Gas — Notes to Financial Statements, 946-20 Financial Services — Investment Companies — Investment Company Activities, and 974-10 Real Estate — Real Estate Investment Trusts — Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of the above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is in the process of evaluating the impact of ASU 2023-06 on the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which focuses on improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. A public entity shall disclose for each reportable segment the significant expense categories and amounts that are regularly provided to the CODM and included in reported segment profit or loss. ASU 2023-07 also requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Entities are permitted to disclose more than one measure of a segment’s profit or loss if such measures are used by the CODM to allocate resources and assess performance, as long as at least one of those measures is determined in a way that is most consistent with the measurement principles used to measure the corresponding amounts in the consolidated financial statements. ASU 2023-07 is applied retrospectively to all periods presented in financial statements, unless it is impracticable. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which emphasizes the importance of providing more granular and detailed expense information in financial statements. The update requires entities to disaggregate expenses by nature and function on the income statement, offering a clearer picture of an entity’s cost structure and operational efficiency. This enhanced disclosure is intended to improve the transparency and comparability of financial reporting. Entities must apply the new guidance retrospectively to all periods presented in the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of these changes on its financial reporting and will implement the necessary adjustments to comply with the updated standards.

Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Company’s condensed consolidated results of operations or financial position.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following:

	April 30, 2025		July 31, 2024
	(unaudited)
Prepayment for advertising service fee (a)	$	-	$	120,000
Others		22,091		2,224
Total	$	22,091	$	122,224

(a)	Prepayment for advertising services represent the advance payments made by the Company to a third party advertising company for producing advertising contents. These prepayments were expensed in the second quarter when the services were performed.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	April 30, 2025		July 31, 2024
	(unaudited)
Furniture, fixtures and equipment	$	-	$	209,290
Less: accumulated depreciation		-		(149,243	)
Property and equipment, net	$	-	$	60,047

Depreciation expense was $nil and $9,669 for the three months ended April 30, 2025 and 2024, respectively. Depreciation expense was $6,282 and $29,007 for the nine months ended April 30, 2025 and 2024, respectively.

In November 2024, the lease agreement with related party lessor was terminated prematurely, resulting in the disposal of all furniture, fixtures, and equipment located at the leased premises. Loss on disposal of the property and equipment was $53,765, which was recorded as other (expense) income in the consolidated statements of operations and comprehensive loss as of April 30, 2025.

NOTE 5 – INVESTMENTS IN TRADING SECURITIES

As of April 30, 2025 and July 31, 2024, the balance of investments in trading securities represented (i) certain equity securities of listed companies purchased through various open market transactions by the Company during the relevant periods. The investments are initially recorded at cost, and subsequently measured at fair value with the changes in fair value recorded in other income (expenses), net in the condensed consolidated statement of operations and comprehensive loss, and (ii) 7,850,000 ordinary shares of a listed company granted by a shareholder as capital contribution. The ordinary shares were granted on October 28, 2024 and were subject to 1933Act restrictions until March 2025. As of April 30, 2025, the fair value of the 7,850,000 ordinary shares was $1,134,482. The Company initially accounted for the share as “investment in trading securities” at fair value by reference to the prevailing market price on shares grant date, and subsequently measure the share awards at fair value.

For the three months ended April 30, 2025 and 2024, the Company recognized a decrease in fair value of investments of $1,400,028 and $309,521, respectively. For the nine months ended April 30, 2025 and 2024, the Company recognized a decrease in fair value of investments of $2,538,592 and $338,255, respectively.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – OPERATING LEASES

The Company leased offices space under one non-cancelable operating lease with a related party lessor (Note 10). This lease agreement was terminated in November 2024, resulting in a loss from early termination amounting to $13,000. The loss comprised prepaid rental and lease deposit that were non-recoverable upon early termination, was recorded under other (expense) income in the consolidated statement of operations and comprehensive loss for the nine months ended April 30, 2025.

Rent expenses for the three months ended April 30, 2025 and 2024 were $nil and $45,400, respectively. Rent expenses for the nine months ended April 30, 2025 and 2024 were $12,000 and $291,771, respectively.

NOTE 7 – ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES, AND OTHER LONG-TERM LIABILITIES

Accounts payable, accrued expenses and other current liabilities consisted of the following:

	April 30, 2025		July 31, 2024
	(unaudited)
Accounts payable, accrued expenses and other current liabilities:
Accrued litigation fee, current (a)	$	-	$	750,000
Investment securities payable		-		69,621
Others		8,088		137,436
	$	8,088	$	957,057
Current portion of long-term payables:
Accrued litigation fee (a)	$	250,000	$	-
Long-term payables
Accrued litigation fee, noncurrent (a)	$	-	$	250,000

(a)

On September 24, 2024, the Company and Boustead Securities, LLC (“Boustead”) entered into a settlement agreement, pursuant to which the Company would compensate Boustead in the amount of $1,000,000. The compensation is payable in three instalments, with first instalment of $250,000 payable with execution of settlement agreement, the second instalment of $500,000 payable before March 1, 2025, and the final instalment of $250,000 payable before December 31, 2025. In September 2024 and February, the Company made the first and second payments totaling $750,000. Accordingly, the Company recorded accrued litigation fees of $nil and $750,000 as current liabilities as of April 30, 2025 and July 31, 2024, respectively. The remaining $250,000 was recorded as current portion of long-term payables and noncurrent liabilities as of April 30, 2025 and July 31, 2024, respectively.

NOTE 8 – COMMON STOCK

On January 15, 2025, the Company entered into certain securities purchase agreement with certain non-affiliated institutional investors pursuant to which the Company agreed to sell 3,820,000 of its ordinary shares in a registered direct offering, for gross proceeds of approximately $4.7 million. The purchase price for each Ordinary Share is $1.25.

On February 4, 2025, the Company entered into certain securities purchase agreement with certain non-affiliated institutional investor pursuant to which the Company agreed to sell (1) 1,580,000 ordinary shares, par value $0.001 per share, and (2) certain pre-funded warrants to purchase up to 887,553 Ordinary Shares in a registered direct offering, and (3) in a concurrent private placement, restricted warrants to purchase an aggregate of up to 2,467,553 Ordinary Shares, for aggregate gross proceeds of approximately $2.5 million. The purchase price for each Ordinary Share is $1

As of April 30, 2025, the Company had 100,000,000,000 authorized ordinary shares, and 17,317,452 ordinary shares were issued and outstanding, respectively.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – WARRANTS

On February 4, 2025, the Company entered into certain securities purchase agreement with certain non-affiliated institutional investor (the “Purchaser”) pursuant to which the Company agreed to sell (1) 1,580,000 ordinary shares, par value $0.001 per share (the “Ordinary Shares”), and (2) certain pre-funded warrants to purchase up to 887,553 Ordinary Shares (the “Pre-Funded Warrants”) in a registered direct offering, and (3) in a concurrent private placement, restricted warrants to purchase an aggregate of up to 2,467,553 Ordinary Shares (the “Restricted Warrants”), for aggregate gross proceeds of approximately $2.5 million (the “Offering”).

Each Pre-Funded Warrant is exercisable for one Ordinary Share at an exercise price of USS0.01. The Company are offering the Pre-Funded Warrants to the Purchaser whose purchase of the Ordinary Shares in this offering would otherwise result in such purchase, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchase, 9.99%) of outstanding Ordinary Shares immediately following the consummation of this offering. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

Each Restricted Warrant is exercisable six months after the date of issuance at an exercise price of $1.20 per Ordinary Share and expires five and a half years from the date of issuance.

The following table summarizes information relating to outstanding and exercisable warrants as of April 30, 2025:

	Nine Months Ended
	April 30, 2025
	Number		Weighted average exercise price
Outstanding and exercisable at beginning of the period		-	$	-
Issued during the period - Pre-Funded Warrants		887,553		0.01
Issued during the period - Restricted Warrants		2,467,553		1.2
Exercised during the period		-
Outstanding and exercisable at end of the period		3,355,106	$	0.89

	Warrants Outstanding						Warrants Exercisable
	Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Pre-Funded Warrants		887,553		-	$	0.01		887,553	$	0.01
Restricted Warrants		2,467,553		5.27	$	1.2		-	$	-

NOTE 10 – ADDITIONAL PAID-IN CAPITAL

On October 28, 2024, the Company was granted 7,850,000 ordinary shares of a listed company by a shareholder as capital contribution. The ordinary shares were subject to 1933 Act restrictions until March 2025. The Company initially accounted for the share as “investment in trading securities” at fair value of $3,611,000, with corresponding account charged to “additional paid-in capital”.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – RELATED PARTY TRANSACTIONS

1)	Nature of relationships with related parties

The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions during the three and nine months ended April 30, 2025 and 2024, or recorded balances as of April 30, 2025 and July 31, 2024:

Name		Relationship with the Company
Mr. Jun Liu		The former Chief Executive Officer of the Company
Huaya		Wholly owned by Mr. Pishan Chi, the former Chief Executive Officer of the Company
Asia International Securities Exchange Co., Ltd.		Wholly owned by Mr. Jun Liu
Zachary Group LLC (“Zachary Group”)		Wholly owned by Mr. Jun Liu

2)	Transactions with related parties

In June 2022, the Company entered into an office lease agreement (“Lease Agreement”) with Zachary Group. Pursuant to the agreement, the Company would lease the office space for a lease term of 5 years, matured in May 2027. The monthly rental fee was $20,000, payable on a monthly basis. On March 1, 2024, the Company and Zachary Group modified the lease agreement to reduce the lease term and office space. The modified agreement was for a lease term of 2 years through February 2026, and monthly rental fee was $3,000, payable on a monthly basis. On November 30, 2024, the Company entered into an agreement with Zachary Group and agreed that the Lease Agreement would be terminated effective November 1, 2024.

For the three months ended April 30, 2025 and 2024, the Company recorded rental expenses of $nil and $26,000, respectively. For the nine months ended April 30, 2025 and 2024, the Company recorded rental expenses of $12,000 and $146,000, respectively.

For the nine months ended April 30, 2025, the Company extended a loan of $93,013 to Mr. Jun Liu and subsequently collected loan of same amount from him.

For the three and nine months ended April 30, 2024, the Company repaid loans of $nil and $17,710 to Asia International Securities Exchange Co., Ltd, respectively. The loans were interest free and was repayable on demand.

3)	Balances with related parties

As of April 30, 2025 and July 31, 2024, the balances due from related parties were as follows:

	April 30, 2025		July 31, 2024
	(unaudited)
Accounts receivable:
Asia International Securities Exchange Co., Ltd.	$	-	$	200,000
	$	-	$	200,000
Due from related parties:
Asia International Securities Exchange Co., Ltd. (a)	$	-	$	900,000
Mr. Jun Liu		600,000
	$	600,000	$	900,000

a)	The balance due from Asia International Securities Exchange Co., Ltd. represented a prepayment for security purchase. However the transaction was subsequently canceled. The Company fully collect the prepayments.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – TAXES

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

British Virgin Islands

Under the current laws of the British Virgin Islands, the Company and ATIF Investment are not subject to tax on income or capital gains in the British Virgin Islands. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed.

USA

For the US jurisdiction, ATIF Inc., ATIF BC, ATIF BM 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%. ATIF BD has $nil State coporation tax, but franchise tax instead. The Company also evaluated the impact from the recent tax reforms in the United States, including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Health and Economic Recovery Omnibus Emergency Solutions Act (“HERO Act”), which both were passed in 2020, no material impact on the Company is expected based on the analysis. The Company will continue to monitor the potential impact going forward.

For the three and nine months ended April 30, 2025 and 2024, the Company did not incur income tax expenses.

The Company’s deferred tax assets primarily derived from the net operating loss (“NOL”). 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 April 30, 2025 and July 31, 2024, management believes that the realization of the deferred tax assets appears to be uncertain and may not be realizable in the near future. Therefore, a 100% valuation allowance has been provided against the deferred tax assets.

Uncertain tax positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of April 30, 2025 and July 31, 2024 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – CONTIGENCIES

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Pending Legal Proceeding with Boustead Securities, LLC (“Boustead”)

On May 14, 2020, Boustead filed a lawsuit against the Company and LGC for breaching the underwriting agreement Boustead had with each of the Company and LGC, in which Boustead was separately engaged as the exclusive financial advisor to provide financial advisory services to the Company and LGC.

Boustead’s Complaint alleges four causes of action against the Company, including breach of contract; breach of the implied covenant of good faith and fair dealing; tortious interference with business relationships and quantum meruit.

On October 6, 2020, ATIF filed a motion to dismiss Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On October 9, 2020, the United States District Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10, 2020. Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020. Boustead’s amended complaint asserts the same four causes of action against ATIF and LGC as its original complaint. The Company filed another motion to dismiss Boustead’s amended complaint on December 8, 2020.

On August 25, 2021, the United States District Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first amended complaint. In its order and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes of action against ATIF as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion seeking leave to file a second amended complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s motion for leave and Boustead filed the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all other causes of action alleged in the original complaint. On January 18, 2022, the Company filed a motion to dismiss Boustead’s second amended complaint. Boustead filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.

On July 6, 2022, the Court denied our motion to dismiss the second amended complaint. Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s claims in California. Briefing on the Company’s motion to compel concluded on August 23, 2022. Since the agreement between ATIF and Boustead contains a valid arbitration clause that applies to Boustead’s breach of contract claim, and the parties have not engaged in discovery, on February 14, 2023, the Court ordered that ATIF’s motion to compel arbitration is granted and this case is stayed pending arbitration.

On March 10, 2023, Boustead, filed Demand for Arbitration against ATIF (the Respondent) before JAMS in California and the assigned JAMS case Ref. No. is 5220002783. On May 25, 2023, ATIF filed its answer to deny Boustead’s Demand for Arbitration, which was unsuccessful and the arbitration process was initiated. The arbitrator ordered a motion to be filed by Boustead for a determination of contact interpretation, prior to extensive discovery into issues such as the alleged merits and damages, and to determine whether the contract interpretation should allow the matter to further proceed. Boustead had filed the Motion for Contract Interpretation Determination. ATIF filed its opposition to that Motion on October 16, 2023. The hearing on the motion was held on November 8, 2023, during which the arbitrator extended the hearing to February 29, 2024. The arbitrator also established December 15, 2023, as the deadline for Boustead to submit its reply regarding the contract interpretation issues raised by the Company. Simultaneously, the Company was granted until February 12, 2024, to present its response brief.

ATIF HOLDINGS LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – CONTIGENCIES (continued)

On September 24, 2024, the Company and Boustead entered into a settlement agreement, pursuant to which the Company shall pay a total amount of $1,000,000 to Boustead. The payment is made in three instalments, the first instalment of $250,000 is payable upon execution of the settlement agreement, the second instalment of $500,000 is payable before March 1, 2025, and the final instalment of $250,000 is payable before December 31, 2025. The Company made the first and second instalment payments totaling 750,000 as schedule.

Pending Legal Proceeding with J.P Morgan Securities LLC (“JPMS”)

On December 22, 2023, J.P Morgan Securities LLC (“JPMS”) filed a lawsuit in the Superior Court of California, County of Orange, bearing Case Number 30-2023-01369978-CU-FR-CJC against ATIF Holdings Limited (“Holdings”), ATIF Inc., ATIF-1 GP, LLC (ATIF-1 GP”), and two officers of Holdings and ATIF Inc., Jun Liu and Zhiliang “Ian” Zhou, alleging and asserting that it is entitled to recover $5,064,160 in damages plus interest and attorneys’ fees relating to a stock transaction by ATIF-1 GP.

The parties have agreed to attempt to mediate the dispute before proceeding to litigation. A mediation was held on May 6, 2024, but the parties could not come to a resolution. The Defendants’ time to respond to the lawsuit was May 20, 2024. On May 15, 2024, the Defendants filed a Petition with the Superior Court of California seeking to compel arbitration under the operative agreements and stay the underlying State Court action. On or about August 16, 2024, the parties agreed that JPMS and ATIF-1 GP, LLC would submit any disputes between the two of them only, to FINRA arbitration, and stay the California state court case pending such arbitration. At this time, the management is still in the process of evaluating the claims and defenses.

On January 22, 2025, Jun Liu resigned from his position as the Chief Executive Officer, director and Chairman of the board of directors of the “Company, effective immediately.

NOTE 14 – SUBSEQUENT EVENTS

None.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read together with the Company’s annual report on Form 10-K for the fiscal year ended July 31, 2024 and the consolidated financial statements and notes included therein (collectively, the “2024 Annual Report”), as well as the Company’s condensed consolidated financial statements and the related notes included in this report. Pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, the Company has presumed that readers have access to and have read the disclosure under the same heading contained in the 2024 Annual Report. This discussion and analysis contains forward-looking statements. Please see the cautionary note regarding these statements at the beginning of this report.

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.

As of the date of this report, and in alignment with our long-term optimism about the Bitcoin (BTC) industry, we have begun our strategic expansion into the BTC sector with a five-year plan to accumulate 1,000 BTC through a combination of direct purchases and mining operations. We have tentatively selected West Texas as the primary location for our planned mining operations, driven by several key factors including Texas' favorable regulatory environment for digital asset mining, abundant and affordable land, and a well-developed, deregulated electricity market with competitive power costs. We have also engaged an industry professional to be responsible for the operation of the BTC business. As of the date of this report the Company has purchased 0.19 BTC in the open market. In the future, we plan to recruit more professionals and allocate more resources to further expand and develop this business.

Our financial consulting services

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. 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 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 three months ended April 30, 2025 and 2024, we provided consulting services to one customer. For the nine months ended April 30, 2025 and 2024, we provided consulting services to two and four customers, respectively, which primarily engaged the Company to provide consulting services relating to going public in the US through IPO, reverse merger and acquisition.

Our total revenue generated from consulting services amounted to $0.25 million and $0.2 million for the three months ended April 30, 2025 and 2024, respectively. Our total revenue generated from consulting services amounted to $0.45 million and $0.35 million for the nine months ended April 30, 2025 and 2024, 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. 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 market competition.

We 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.

Results of Operations

Comparison of Operation Results for the Three Months ended April 30, 2025 and 2024

The following table summarizes the results of our operations for the three months ended April 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

	For the three months ended April 30,						Changes
	2025			2024			Amount Increase (Decrease)			Percentage Increase (Decrease)

Revenues		250,000			200,000			50,000			25	%

Operating expenses
Selling expenses		-			(86,000	)		86,000			(100	)%
General and administrative expenses		(439,012	)		(635,282	)		196,270			(31	)%
Total operating expenses		(439,012	)		(721,282	)		282,270			(39	)%

Loss from operations		(189,012	)		(521,282	)		332,270			(64	)%

Other (expenses) income
Interest (expenses) income		-			-			-
Other (expense) income		-			23,215			(23,215	)		(100	)%
Loss from investment in trading securities		(1,400,028	)		(309,521	)		(1,090,507	)		352	%
Total other (expense) income		(1,400,028	)		(286,306	)		(1,113,722	)		389	%

Loss before income taxes		(1,589,040	)		(807,588	)		(781,452	)		97	%

Income tax expenses		-			-			-
Net loss		(1,589,040	)		(807,588	)		(781,452	)		97	%

Revenues. Our total revenue increased by $50,000, or 25%, from $0.2 million for the three months ended April 30, 2024, to $0.25 million for the three months ended April 30, 2025.

For the three months ended April 30, 2025, we provided IPO assistance services to one customer and recognized revenues of $0.25 million. For the three months ended April 30, 2024, we provided IPO assistance services to one customer and recognized revenues of $0.2 million.

Selling expenses. Our selling expenses primarily consisted of advertising and promotion expenses. For the three months ended April 30, 2025, our selling expenses was $nil, representing a decrease of $86,000, or 100%, from $86,000 for the three months ended April 30, 2024. The decrease was primarily due to a decrease of amortization expenses of for TV promotion videos.

General and administrative expenses. Our general and administrative expenses primarily consisted of salary and welfare expenses of management and administrative team, professional expenses, office expenses, operating lease expenses. Our general and administrative expenses decreased by $0.2 million, or 31%, from approximately $0.6 million for the three months ended April 30, 2024, to $0.4 million for the three months ended April 30, 2025. The decrease was primarily due to decrease of payroll expenses from the compensation adjustments following changes in executive leadership roles.

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 three months ended April 30, 2025 and 2024, we recorded an investment loss of approximately $1.4 million and $0.3 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 Inc, ATIF BD, ATIF BC and ATIF BM were established in the U.S and are subject to federal and state income taxes on their business operations. The federal tax rate is 21% and state tax rate is 8.84%. ATIF BD, a corporation registered in Delaware is subject to a franchise tax. 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.

For the three months ended April 30, 2025 and 2024, we did not recognize income tax expenses.

Net income (loss). As a result of foregoing, net loss was approximately $1.6 million for the three months ended April 30, 2025, an increase of loss of approximately $0.8 million from net loss of $0.8 million for the three months ended April 30, 2024.

Comparison of Operation Results for the Nine Months ended April 30, 2025 and 2024

The following table summarizes the results of our operations for the nine months ended April 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

	For the nine months ended April 30,						Changes
	2025			2024			Amount Increase (Decrease)			Percentage Increase (Decrease)

Revenues		450,000			350,000			100,000			29	%

Operating expenses
Selling expenses		(120,000	)		(251,000	)		131,000			(52	)%
General and administrative expenses		(1,390,918	)		(1,824,577	)		433,659			(24	)%
Total operating expenses		(1,510,918	)		(2,075,577	)		564,659			(27	)%

Loss from operations		(1,060,918	)		(1,725,577	)		664,659			(39	)%

Other income (expenses)
Interest (expenses) income		(15	)		23			(38	)		(165	)%
Other (expense) income		(260,046	)		223,120			(483,166	)		(217	)%
Loss from investment in trading securities		(2,538,592	)		(338,255	)		(2,200,337	)		650	%
Total other (expense) income		(2,798,653	)		(115,112	)		(2,683,541	)		2331	%

Loss before income taxes		(3,859,571	)		(1,840,689	)		(2,018,882	)		110	%

Income tax expenses		-			-			-
Net loss		(3,859,571	)		(1,840,689	)		(2,018,882	)		110	%

Revenues. Our total revenue increased by $0.1 million from $0.35 million for the nine months ended April 30, 2024, to $0.45 million in nine months ended April 30, 2025.

During the nine months ended April 30, 2025, we provided IPO assistance services to two customers and recognized revenues of $0.45 million. For the nine months ended April 30, 2024, we provided IPO assistance services to four customers and recognized revenues of $0.35 million.

Selling expenses. Our selling expenses primarily consisted of advertising and promotion expenses. For the nine months ended April 30, 2025, our selling expenses was $120,000, representing a decrease of $131,000, or 52%, from $251,000 for the nine months ended April 30, 2024. The decrease was primarily due to a decrease of amortization expenses for TV promotion videos.

As a percentage of sales, our absolute amount of selling expenses were 27% and 72% of our total revenues for the nine months ended April 30, 2025 and 2024, respectively.

General and administrative expenses. Our general and administrative expenses primarily consisted of salary and welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit and legal fees. Our general and administrative expenses decreased from approximately $1.8 million in the nine months ended April 30, 2024 to approximately $1.4 million in the same period of 2025, which was primarily due to decrease of payroll expenses from the compensation adjustments following changes in executive leadership roles.

As a percentage of sales, our general and administrative expenses were 309% and 521% of our total revenues for the nine months ended April 30, 2025 and 2024, respectively.

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 nine months ended April 30, 2025 and 2024, we recorded an investment loss of approximately $2.5 million and $0.3 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 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. We will continue to monitor the potential impact going forward. For the nine months ended April 30, 2025 and 2024, we did not recognized income tax expenses.

Net loss. As a result of foregoing, net loss was approximately $3.9 million for the nine months ended April 30, 2025, an increase of loss of approximately $2.1 million from net loss of $1.8 million for the nine months ended April 30, 2024.

Liquidity and Capital Resources

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

For the nine months ended April 30, 2025 and 2024, we reported a net loss of approximately $3.9 million and $1.8 million, respectively, and operating cash outflows approximately $2.1 million and approximately $0.08 million. In assessing the ability to continue as a going concern, we monitor and analyze cash and our ability to generate sufficient cash flow in the future to support our operating and capital expenditure commitments. Because of a history of net losses from operations, cash out from operating activities, and the requirement of additional capital to fund our current operating plan at April 30, 2025, these factors indicate the existence of an uncertainty that raises substantial doubt about our ability to continue as a going concern.

In January 2025, we issued and sold 3,820,000 ordinary shares to certain non-affiliated institutional investors at a price of US$1.25 per share for gross proceeds of US$4.8 million. We recorded net proceeds of approximately $4.8 million.

In February 2025, we issued and sold 1,580,000 ordinary shares at a price of US$1 per share, and pre-funded warrants to purchase up to 887,553 Ordinary Shares, and in a concurrent private placement, restricted warrants to purchase an aggregate of up to 2,467,553 Ordinary Shares to certain non-affiliated institutional investors for gross proceeds of US$2.5 million. We recorded net proceeds of approximately $2.1 million.

As of April 30, 2025, we had cash of approximately $6.7 million, short-term investments in trading securities of approximately $1.1 million and due from a related party of $0.6 million, which were highly liquid. On the other hand, we had current liabilities of approximately $0.3 million. The cash and short-term investments in trading securities could well cover the current liabilities. Our 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.

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 April 30, 2025.

Cash Flow

The following table sets forth summary of our cash flows for the periods indicated:

	For the Nine Months Ended April 30,
	2025 (unaudited)			2024 (unaudited)
Net cash used in operating activities		(2,134,768	)		(84,188	)
Net cash provided by (used in) investing activities		662,075			(749,470	)
Net cash provided by financing activities		6,904,719			2,343,792
Net decrease in cash		5,432,026			1,510,134
Cash, beginning of period		1,249,376			606,022
Cash, end of period	$	6,681,402		$	2,116,156

Operating Activities

Net cash used in operating activities was approximately $2.1 million in nine months ended April 30, 2025. Net cash used in operating activities was primarily comprised of net loss of approximately $3.9 million, adjusted for loss of approximately $2.5 million from investment in trading securities, and net changes in our operating assets and liabilities, principally comprising of a decrease of $0.05 million in accounts receivable and a decrease of approximately $0.9 million in accounts payable, accrued expenses and other current liabilities because we paid litigation liabilities of approximately $0.8 million.

Net cash used in operating activities was $84,188 in the nine months ended April 30, 2024. Net cash used in operating activities was primarily comprised of net loss of approximately $1.8 million, adjusted for loss from investment of trading securities of approximately $0.3 million, and net changes in our operating assets and liabilities, principally comprising of (i) a decrease of accounts receivable of approximately $0.5 million and $0.6 million, respectively, due from third party customers and related party customers as a result of collection of consulting fees from customers, (ii) a decrease of prepaid expenses and other current assets of approximately $0.2 million due to amortization of prepaid advertising service fees, and (iii) an increase of accrued expenses and other current liabilities of approximately of $0.2 million as a result of accrual of payroll expenses and legal service fees.

Investing Activities

Net cash provided by investing activities was $0.7 million for the nine months ended April 30, 2025, primarily consisting of net proceeds from investment in trading securities of approximately $0.4 million and net collection of borrowings from a related party of $0.3 million.

Net cash used in investing activities was approximately $0.7 million in the nine months ended April 30, 2024, primarily used in investment in trading securities of approximately $0.4 million and loans made to related parties of approximately $0.3 million.

Financing Activities

Net cash provided by financing activities was approximately $6.9 million in the nine months ended April 30, 2025, which represented proceeds from issuance of ordinary shares.

Net cash provided by financing activities was approximately $2.3 million in the nine months ended April 30, 2024, which represented proceeds from issuance of ordinary shares.

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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of April 30, 2025. Based on that evaluation, our management has concluded that, as of April 30, 2025, 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 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 U.S. GAAP accounting issues and the related disclosures under U.S. GAAP. 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. 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.

Changes in Internal Control over Financial Reporting

Except as disclosed above, there have been no changes in our internal controls over financial reporting that occurred during three months ended April 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. Except for the litigation disclosed below, we are not currently a party to any legal or arbitration proceeding the outcome of which, if ‘determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows, or financial condition.

On May 14, 2020, Boustead filed a lawsuit against the Company and Leaping Group Co., Ltd. a limited liability organized under the laws of Cayman Islands (“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 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.

Boustead’s Complaint alleged 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, we filed a motion to dismiss Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On October 9, 2020, the United States District Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10, 2020. Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020. Boustead’s first amended complaint asserted the same four causes of action against LGC and us as its original complaint. We filed another motion to dismiss Boustead’s amended complaint on December 8, 2020.

On August 25, 2021, the United States District Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first amended complaint. In its order and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes of action against us as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion seeking leave to file a second amended complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s motion for leave and Boustead filed the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all other causes of action alleged in the original complaint. On January 18, 2022, the Company filed a motion to dismiss Boustead’s second amended complaint. Boustead filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.

On July 6, 2022, the Court denied our motion to dismiss the second amended complaint. Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration. Briefing on the Company’s motion to compel concluded on August 23, 2022 Since the agreement between ATIF and Boustead contains a valid arbitration clause that applies to Boustead’s breach of contract claim, and the parties have not engaged in discovery, on February 14, 2023, the Court ordered that ATIF’s motion to compel arbitration is granted and this case is stayed pending arbitration.

On September 24, 2024, the Company and Boustead entered into a settlement agreement, pursuant to which the Company shall pay a total amount of $1,000,000 to Boustead. The payment is made in three instalments, the first instalment of $250,000 was paid on September 24, 2024, the second instalment of $500,000 was paid on February 27, 2025, and the final instalment of $250,000 is payable before December 31, 2025.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURE.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

Exhibit
Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1*		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

The certifications attached as Exhibits 32.1 and 32.2 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ATIF HOLDINGS LIMITED

June 6, 2025	By:	/s/ Dr. Kamran Khan
		Dr. Kamran Khan
		Chief Executive Officer

	ATIF HOLDINGS LIMITED

June 6, 2025	By:	/s/ Shibin Yu
		Shibin Yu
		Chief Financial Officer

SEC Form 10-Q filed by ATIF Holdings Limited