18. CONCENTRATIONS OF RISKS

(a) Major customers

For the years ended December 31, 2025 and 2024, no customer accounted for 10.0% or more of the Company’s total revenues.

As of December 31, 2025, no customer accounted for 10.0% or more of the Company’s balance of accounts receivable and one company accounted for approximately 79.7% as of December 31, 2024.

(b) Major vendors

For the year ended December 31, 2025, three vendors accounted for approximately 55.6%, 20.3% and 11.1% of the Company’s total purchases. For the year ended December 31, 2024, two vendors accounted for approximately 59.8% and 17.5% of the Company’s total purchases.

As of December 31, 2025, two vendors accounted for approximately 63.3% and 27.1% of the Company’s total balance of accounts payable, respectively. CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 27.1% of the Company’s total balance of accounts payable. As of December 31, 2024, three vendors accounted for approximately 44.3%, 31.8% and 22.9% of the Company’s total balance of accounts payable, respectively. CTA Nutriceuticals (Asia) Sdn Bhd, a related company, accounted for approximately 22.9% of the Company’s total balance of accounts payable.

(c) Commission Expenses to Sales Distributors and Stockists

For the year ended December 2025, one sales distributor accounted for approximately 39.9% of the Company’s total commission expense. For the year ended December 2024, one sales distributor accounted for approximately 21.2% of the Company’s total commission expense.

(d) Credit risk

As of December 31, 2025, the Company has entrusted Bi Cheng Investment Limited (“Bi Cheng”), a company incorporated and based in the People’s Republic of China (“PRC”) to manage a significant portion of its liquid assets, totaling approximately $23,816,398. These funds are maintained in accounts controlled by Bi Cheng in the PRC.

The Company is subject to credit risk arising from the possibility that Bi Cheng may fail to fulfill its contractual obligations, including the safekeeping and liquidity of the entrusted funds. In assessing the risk, management considers the financial condition and reputation of Bi Cheng.

While the Company has contractual rights to recover the entrusted funds and conducts periodic monitoring, there can be no assurance that such funds will be fully recoverable in a timely manner due to uncertainties in the legal, regulatory, and foreign exchange frameworks in the PRC. These uncertainties may affect the Company’s ability to access or repatriate the funds, particularly in adverse economic or political conditions.

No allowance for credit loss was recorded as of December 31, 2025, as management believes that the risk of loss is not probable based on current information. However, the Company continues to monitor developments and may revise its assessment should conditions materially change.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of December 31, 2025 and 2024, $136,200 and $2,030,048 were deposited with financial institutions, respectively, $297 and $1,806,401 of these balances are not covered by deposit insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Financial instruments that are potentially subject to credit risk consist of accounts receivable, cash, prepayments and deposits and amount due from related parties. The Company believes the concentration of credit risk in its account receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for credit loss based upon factors surrounding the credit risk of specific customers, historical trends and other information. Historically, the Company did not have any bad debt on its account receivable. The Company maintains its cash with financial institutions and, as such, believes the credit risk associated with cash deposits is minimal. Prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases or service providers for future services. For any prepayments and deposits determined by management that such advances will not be in receipts of inventories, services, or refundable, the Company will recognize an allowance for credit loss for such advances. Management reviews its prepayments and deposits on a regular basis to determine if the allowance for credit loss is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for credit losses after management has determined that the likelihood of collection is not probable. The amount due from related parties represents payment made by the Company on behalf of related parties, the management considers the credit risk to be low due to the related parties made repayments within reasonable timeframe.

(e) Exchange rate risk

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

AGAPE ATP CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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