UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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the quarterly period ended
OR
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by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒. No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
There is no public trading market for the shares of Common Stock of DFP Holdings Limited. As a result, the aggregate market value of the common units held by non-affiliates of DFP Holdings Limited cannot be determined.
As of February 14, 2025, there were shares of Common Stock, $ par value per share, outstanding.
DFP HOLDINGS LIMITED
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED DECEMBER 31, 2024
INDEX
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of DFP Holdings Limited, a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results.
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions, and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward - looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
| 3 |
PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
DFP HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 (UNAUDITED) AND SEPTEMBER 30, 2024
(Expressed in U.S. Dollars)
| As of December 31, 2024 | As of September 30, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Prepaid expenses-related party | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Lease deposits | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Deferred revenue | ||||||||
| Due to officer | ||||||||
| Income tax payable | ||||||||
| Operating lease liability – current portion | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Operating lease liability – non-current portion | ||||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred Stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common Stock, $ par value; shares authorized; shares issued and outstanding at December 31, 2024 and September 30, 2024, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 4 |
DFP HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Expressed in U.S. Dollars)
(Unaudited)
Three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | $ | ||||||
| OPERATING COSTS AND EXPENSES: | ||||||||
| Cost of revenues | ||||||||
| General and administrative expenses | ||||||||
| General and administrative expenses-related party | ||||||||
| Total operating costs and expenses | ||||||||
| INCOME (LOSS) FROM OPERATIONS | ( | ) | ||||||
| OTHER INCOME: | ||||||||
| Interest income | ||||||||
| NET INCOME (LOSS) BEFORE INCOME TAXES | ( | ) | ||||||
| Income taxes | ( | ) | ||||||
NET INCOME (LOSS) | ( | ) | ||||||
| Other comprehensive (loss) income: | ||||||||
| -Foreign currency translation (loss) gain | ( | ) | ||||||
| COMPREHENSIVE INCOME (LOSS) | $ | $ | ( | ) | ||||
| NET INCOME (LOSS) PER SHARE-basic and diluted | $ | $ | ) | |||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING-basic and diluted | ||||||||
See accompanying notes to the condensed consolidated financial statements.
| 5 |
DFP HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Expressed in U.S. Dollars)
Three months ended December 31, 2024 (Unaudited)
| Common Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Stockholders’ Equity | |||||||||||||||||||
| Balance as of September 30,2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Balance as of December 31, 2024 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Three months ended December 31, 2023 (Unaudited)
| Common Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Stockholders’ Equity | |||||||||||||||||||
| Balance as of September 30,2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common Stock issued for cash | ||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of December 31, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
DFP HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Expressed in U.S. Dollars)
(Unaudited)
| Three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | - | |||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Prepaid expenses-related party | ||||||||
| Decrease in right-of-use asset | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Deferred revenue | ( | ) | ||||||
| Operating lease liability | ( | ) | ||||||
| Income tax payable | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from sale of common stock | ||||||||
| Advances from (repayment to) officer | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes in cash and cash equivalents | ( | ) | ||||||
| Net increase in cash, cash equivalents, and restricted cash | ||||||||
| Cash, cash equivalents, and restricted cash, beginning of year | ||||||||
| Cash, cash equivalents and restricted cash, end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | $ | ||||||
| Noncash investing and financing activities: | ||||||||
| Right-of-use asset and lease liability recorded for new leases | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 7 |
DFP HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Expressed in U.S. Dollars)
(Unaudited)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business
DFP
Holdings Limited, a Nevada corporation (the “Company”), was incorporated in the State of Nevada on
On March 8, 2022, the Company’s wholly owned subsidiary, DFP Holdings Limited, was formed in Seychelles (“DFP Seychelles”). DFP Seychelles is an intermediate holding company, and operates business through its wholly owned subsidiary, DFP Holdings Limited, a company incorporated in Taiwan (“DFP Taiwan”).
On
May 24, 2022, the Company acquired
Going concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements,
the Company has an accumulated deficit of $
Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan to increase its customer base and realize increased revenues. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Risks & uncertainties resulting from inflation, COVID-19, and geopolitical instability
As a result of the COVID-19 pandemic and actions taken to slow its spread, the ongoing military conflict between Russia and Ukraine, and other geopolitical and macroeconomic factors beyond our control, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
If equity and credit markets deteriorate, it may affect our ability to raise equity capital, borrow on our existing facilities, access our existing cash, or make any additional necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.
| 8 |
Basis of presentation
The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Tide Holdings Limited (TIDE), DFP Holdings Limited (“DFP Seychelles”), and DFP Holdings Limited (Taiwan) (“DFP Taiwan”). Intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. Significant estimates include estimates for assumptions used in impairment testing of long-term assets, and the accrual of potential liabilities.
Revenue recognition
The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, following the five-step model prescribed by ASC 606, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
The Company’s revenue primarily consists of revenue from delivering online and in-person media and leadership training courses. Revenue is recognized in the period in which the services are delivered, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company also recognizes revenue from subscription services for media and leadership training ratably over the subscription period. The Company recognizes deferred revenue at each period end for contracts that have been paid but which the related service has not been performed or delivered. The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue.
The Company also generates revenue from a monthly subscription service, which provides customers in Taiwan with an account that enables access and connectivity to the Malaysian TikTok platform. Subscribers pay a recurring monthly fee for continued access to the service. The Company recognizes revenue from subscription services ratably over the subscription period. Subscription contracts automatically renew each month unless the subscriber provides advance notice of cancellation for the following period.
Beginning in the current fiscal quarter ended December 31, 2024, the Company began recording sales of products though the Company’s mobile application. Revenue and costs of sales are recognized when control of the products transfers to the Company’s customer, which generally occurs upon shipment of the purchased products.
The following table provides information about disaggregated revenue:
| As of and for the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Media and leadership training revenues | $ | $ | ||||||
| Subscription revenues | ||||||||
| Products sale revenues | ||||||||
| Total revenue | $ | $ | ||||||
Cost of revenue
Cost of service revenue primarily consists of commissions, advertising and promotion fee, facility rentals directly attributable to the courses rendered, and cost of products.
| As of and for the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Commissions | $ | $ | ||||||
| Advertising | ||||||||
| Rental of instructional facilities | ||||||||
| Other | ||||||||
| Total cost of revenue | $ | $ | ||||||
| 9 |
Cash, cash equivalents and restricted cash
Cash equivalents include demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities at purchase of three months or less, including money market funds.
| As of December 31, 2024 | As of September 30, 2024 | |||||||
| Cash and cash equivalents | ||||||||
| Denominated in United States Dollars | $ | $ | ||||||
| Denominated in New Taiwan Dollars | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Cash, cash equivalents and restricted cash | $ | $ | ||||||
Financial
instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of December
31, 2024, substantially all the Company’s cash was held by two major financial institutions located in Taiwan, which management
believes is of high credit quality. At December 31, 2024,
Restricted Cash
Restricted cash represents accounts designated as collateral required by the bank. Since our course fees are usually paid by our customers using credit card transactions, banks are concerned about potential chargebacks from our customers. The Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows.
Inventories
During the current fiscal quarter ended December 31, 2024, the Company began purchasing finished goods merchandise for sale and has recorded that merchandise as inventory. The inventory is stated at the lower of cost or net realizable value. For the three months ended December 31, 2024, there were no write-downs of inventory.
Income taxes
The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.
The Company conducts its business in Taiwan and is subject to tax in Taiwan jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the Taiwan tax authority. The Company’s deferred tax assets relate to the Company’s net operating losses in the U.S. and net operating losses and temporary differences between accounting basis and tax basis for its Taiwan-based subsidiaries which are subject to corporate income tax in Taiwan.
Fair value measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures”, with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities, deferred revenue and due to officer, approximate their fair values because of the short-term nature of these financial instruments.
| 10 |
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiary maintains its books and records in its functional currency, New Taiwan Dollars (“NT$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive income or loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
| As of and for the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Period-end NT$ : US$1 exchange rate | ||||||||
| Period-average NT$ : US$1 exchange rate | ||||||||
The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
At December 31, 2024 the Company has potentially dilutive securities, such as options or warrants, outstanding.
Concentrations
For
the three months ended December 31, 2024 and 2023, no customer accounted for
For
the three months ended December 31, 2024, no service provider accounted for
Segments
Our Chief Executive Officer (“CEO”) is our chief operating decision maker (“CODM”). Our CEO evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because our CODM evaluates financial performance on a consolidated basis, we have determined that we operate as a single reportable segment composed of the consolidated financial results of DFP Holdings, Limited.
Our CODM uses consolidated net income (loss) as the sole measure of segment profit or loss. Significant segment expenses include salaries and related, commissions, and operating expenses (see Note 5).
Reclassification
In
presenting the Company’s consolidated statement of operations and comprehensive income (loss) for the three months ending December
31, 2023, the Company presented $
Recent accounting pronouncements
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which includes amendments that require disclosure in the notes to financial statements of specified information about certain costs and expenses, including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. The amendments are effective for the Company’s annual periods beginning January 1, 2027, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is in the process of evaluating this ASU to determine its impact on the Company’s disclosures.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The amendments expand a public entity’s segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, requiring other new disclosures, and requiring enhanced interim disclosures. ASU 2023-07 requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company adopted ASU 2023-07 on October 1, 2024, for the 2025 annual and interim periods on a retrospective basis. This ASU results in the Company including the additional required disclosures. Refer to Note 5 for more information.
The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements.
| 11 |
NOTE 2 – OPERATING LEASES
Prior
to July 1, 2024, the Company rented office space under a short-term lease with a term of
The components of rent expense and supplemental cash flow information related to leases for the period are as follows:
| For the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Lease Cost | ||||||||
| Operating lease cost | $ | $ | ||||||
| Other Information | ||||||||
| Weighted average remaining lease term – operating leases (in years) | ||||||||
| Weighted average discount rate for operating lease | % | |||||||
At December 31, 2023, there was no operating lease right-of-use asset or liability recorded for the short-term lease.
At December 31, 2024, the supplemental balance sheet information related to leases is as follows:
Operating lease right-of-use asset for the year ended September 30, 2024 is as follows:
| Right-of-use assets, net as of September 30, 2024 | $ | |||
| Less: amortization | ( | ) | ||
| Foreign exchange translation | ( | ) | ||
| Right-of-use assets, net as of December 31, 2024 | ||||
| Operating lease liabilities for the year ended December 31, 2024 is as follows: | ||||
| Lease liability at September 30, 2024 | $ | |||
| Add: imputed interest | ||||
| Less: principal repayment | ( | ) | ||
| Foreign exchange translation | ( | ) | ||
| Lease liability at December 31, 2024 | $ | |||
| Lease liability current portion | $ | |||
| Lease liability non-current portion | ||||
| Total operating lease liability | $ |
Maturities of the Company’s lease liabilities are as follows:
Year ending September 30:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total lease payments | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of operating lease liabilities | $ |
| 12 |
NOTE 3 - STOCKHOLDERS’ EQUITY
As of December 31, 2024 the Company has shares of commons stock authorized and shares of common stock issued and outstanding, respectively.
During
the three months ended December 31, 2024, the Company did t
issue any shares of common stock. During the three months ended December 31, 2023, the Company issued shares of common stock for total proceeds
of $
NOTE 4 - RELATED PARTY TRANSACTIONS
Mr.
Hsu Shou Hung (“Mr. Hsu”), a founder of the Company, is currently the Company’s Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer, and sole director. As of December 31, 2024, Mr. Hsu collectively owns shares, or
At
December 31, 2024 and September 30, 2024, $
Mr.
Lin Yi Hsiu (“Mr. Jeff Lin”) is Chief Executive Officer and a director of Leader Capital Holdings Corp. (“LCHC”),
a
LCHC and its wholly owned subsidiary, LOC Weibo Co., Limited (“LOC”) (collectively, “Leader”) provide IT and maintenance services to the Company, respectively.
For the three months ended December 31, 2024 and 2023, the Company incurred the following fees to Leader:
| For the three months ended December 31, | ||||||||||
| Paid to: | Description | 2024 | 2023 | |||||||
| LCHC | IT services | $ | $ | |||||||
| LOC | IT services | |||||||||
| Total | $ | $ | ||||||||
NOTE 5 - SEGMENT REPORTING
The Company’s chief operating decision maker (“CODM”) has been identified as the Company’s Chief Executive Officer (“CEO”). The Company’s CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because the CODM evaluates financial performance on a consolidated basis, the Company has determined that it has a single operating segment composed of the consolidated financial results of DFP Holdings, Limited. All of our revenue is derived from one country which is in Taiwan.
The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM. Operating expenses include all remaining costs necessary to operate our business, which primarily include external professional services, income taxes, and other administrative expenses:
| As of and for the three months ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | $ | ||||||
| Less: | ||||||||
| Salaries and related | ||||||||
| Commissions | ||||||||
| Operating expenses | ||||||||
| Interest income | ( | ) | ( | ) | ||||
| Net income (loss) | $ | $ | ( | ) | ||||
NOTE 6 - SUBSEQUENT EVENT
On
November 18, 2024, the Company entered into a sale and purchase agreement with DFP Leadership Academy Sdn Bhd, a Malaysia private limited
company owned by Mr. Hsu Shou Hung, the Company’s sole officer and director (the “Seller”). The Company agreed to purchase
DFP Leadership Academy Sdn Bhd for approximately $
| 13 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW
DFP Holdings Limited (the “Company” or “we”) was incorporated in the State of Nevada on December 8, 2021, and has a fiscal year end of September 30.
GOING CONCERN
The Company has an accumulated deficit of $1,751,656 as of December 31, 2024. To date, the operations have been primarily financed through the issuance of common stock. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended September 30, 2024, has also expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements included elsewhere in this Quarterly Report do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan to increase its customer base and realize increased revenues. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates for assumptions used in impairment testing of long-term assets and the accrual of potential liabilities.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, following the five-step model prescribed by ASC 606, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
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RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1 to the Condensed Consolidated Financial Statements.
RESULTS OF OPERATIONS
2024:
For the three months ended December 31, 2024, we generated revenue of $442,777.
For the three months ended December 31, 2024, operating costs and expenses were $378,552, including cost of revenue of $122,932, general and administrative expenses of $238,007, and general and administrative expenses to related party of $17,613, respectively.
2023:
For the three months ended December 31, 2023, we generated revenue of $279,022.
For the three months ended December 31, 2023, operating expenses were $303,577, including cost of revenue of $118,451, general and administrative expenses of $169,725, and general and administrative expenses to related party of $15,401, respectively.
Liquidity and Capital Resources
The Company has an accumulated deficit of $1,751,656 as of December 31, 2024. To date, the operations have been primarily financed through the issuance of common stock. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended September 30, 2024, has also expressed substantial doubt about the Company’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon the Company’s ability to implement its business plans and continue receiving financial support from its officers and shareholders. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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Item 4. Controls and Procedures.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive and financial officer, we are responsible for conducting an evaluation of the effectiveness of the design and operation of our internal controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal period covered by this Report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this Report was being prepared. Based on this evaluation, our principal executive and financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of December 31, 2024 due to material weaknesses in our internal control over financial reporting as described below.
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
The material weaknesses identified include (i) the Company did not maintain a functioning independent audit committee and did not maintain an independent board; (ii) the Company had inadequate segregation of duties; and (iii) the Company had an insufficient number of personnel with an appropriate level of U.S. GAAP knowledge and experience and ongoing training in the application of U.S. GAAP and SEC disclosure requirements commensurate with the Company’s financial reporting requirements.
Notwithstanding the identified material weaknesses, management has concluded that the Financial Statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.
Planned remediation of material weaknesses
Management is actively engaged in developing and implementing remediation plans to address the material weaknesses described above. These remediation efforts are ongoing and include or are expected to include preparation of written documentation of our internal control policies and procedures, and to increase personnel and technical accounting expertise within the accounting function.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Inherent Limitations on Effectiveness of Controls
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design and disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgement in evaluating the benefits of possible controls and procedures relative to the their cost.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not a party to any threatened or pending legal proceedings.
Item 1A. Risk Factors.
Not required by smaller reporting companies. We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Default upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Insider Trading Arrangements
During
the quarter ended December 31, 2024, none of our directors or officers
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Item 6. Exhibits.
The following exhibits are filed or “furnished” herewith:
| Number | Description | |
| 3.1 | Certificate of Incorporation (1) | |
| 3.2 | By-laws (1) | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification of Principal Executive Officer and Principal 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 (embedded within the Inline XBRL document)* |
| (1) | Previously filed and incorporated in the Company’s Registration Statement, Amendment No.3 to Form S-1 (File No. 333-271858) with the Securities and Exchange Commission on September 6, 2023. |
* Filed herewith.
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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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.
| DFP HOLDINGS LIMITED | ||
| (Name of Registrant) | ||
| Date: February 14, 2025 | By: | /s/ Hsu Shou Hung |
| Name: | Hsu Shou Hung | |
| Title: | Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | |
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