AUC — H1 2026 Financial Report Analysis

Overview

ATIF Holdings is a small Nasdaq-listed consulting firm that helps companies go public in the US. It was set up in 2015 to serve Chinese companies, but it now has its principal office in Irvine, California, and is incorporated in the British Virgin Islands. Its fiscal year ends July 31, so this report covers the first half of fiscal 2026 (August 1, 2025 to January 31, 2026). The numbers come from the unaudited interim statements and management's discussion furnished on Form 6-K on June 5, 2026.

On the income statement this was a better half. Revenue rose to $1.6 million from $0.2 million, and the net loss shrank to $0.28 million from $2.27 million. The balance sheet tells a different story. In October 2025 the company raised $29.3 million by selling 9 million shares with warrants to non-US buyers. By January 31 it had prepaid almost all of that, plus most of its existing cash, to an unnamed "third-party agent": $35.9 million to buy "a specified type of ICO token" (ICO is short for initial coin offering, a sale of new crypto tokens). Cash fell from $8.95 million to $1.49 million. The consulting business is now a small part of the company. What ATIF is worth depends mostly on that crypto prepayment.

At a glance

• $35.9 million (89% of total assets) is a prepayment for crypto tokens that had not been delivered by period-end. On April 2, 2026 the agent delivered 160 million "AIAPP" tokens, which the company valued at about $23 million when they arrived. That is a partial delivery, and the accounting treatment was still being decided.
• The $1.6 million of revenue brought in no cash in the half. Accounts receivable (money customers owe) rose by exactly $1.6 million, and the matching $1.04 million cost owed to an outside consulting firm was also unpaid.
• Management's discussion warns of "substantial doubt" about the company's ability to continue as a going concern, even after the $29.3 million raise. The cash had already gone into the token contract.

The numbers

Percentage changes in revenue, net loss and EPS are marked n/m (not meaningful). Revenue grew from a $0.2 million base that came from a single customer. Both years were losses. The weighted average share count rose from 674,768 to 6,987,286, so per-share comparisons say more about dilution than about the business.

What drove the consulting results

Management says revenue grew "primarily attributable to increase in revenue from consulting services to clients in Hong Kong, the U.S. and Singapore." Four customers each paid an equal share of the $1.6 million, which works out to $0.4 million apiece. Last year one customer accounted for all revenue. The work booked this half was mainly "phase II and phase III", ATIF's terms for the later stages of a listing project: restructuring, finding a shell company for a reverse merger, and drafting filings. Phase III fees are recognized only when a client's listing or reverse merger completes, which makes revenue lumpy from period to period.

Gross margin, the share of revenue left after the direct cost of delivering the service, fell from 100% to 35%. This is not a pricing problem. Last year ATIF booked no cost of revenue. This year it recorded $1.04 million of fees owed to an outside consulting firm under an April 2025 "framework agreement" to deliver client projects. In practice ATIF now subcontracts much of the work and keeps about a third of each fee.

The operating loss narrowed mostly because selling expenses dropped from $0.12 million to zero (management cites lower amortization of TV promotion videos) and G&A fell by $0.13 million. Below the operating line, losses on the stock portfolio ATIF holds fell from $1.14 million to $0.08 million, because only $31,902 of those securities was left. That accounts for about half of the $1.99 million improvement in net loss. It came from having less left to lose, not from the business doing better.

What the headline numbers hide

1. Almost all of the company's assets are a crypto prepayment. Note 5 says ATIF signed "procurement authorization contracts with a third-party agent" on August 1 and October 28, 2025, authorizing it to buy "a specified type of ICO token" worth about $35,920,947. The tokens were to be delivered to a company-controlled wallet within 12 months. ATIF paid the full amount up front. The filing does not name the agent or, as of January 31, the token. A subsequent-events note says that on April 2, 2026 ATIF received 160 million AIAPP tokens with "an aggregate fair value of approximately USD 23,000,000", described as "partial fulfillment." The company was "evaluating the accounting treatment", meaning whether to classify them as intangible assets, digital assets or financial instruments. Two things follow:

• The filing does not say how much of the $35.9 million the April delivery was meant to cover. So it cannot tell us whether the $23 million value is more or less than what was paid for those tokens, or what is still owed.
• A token from a new offering usually has a thin trading market, and its value can move a long way in either direction. With $38.7 million of shareholder equity, a large write-down of the token position would wipe out most of the book value.

2. The token purchase was booked as an operating cash outflow. The $35.9 million sits in "prepaid expenses and other current assets", so it reduces operating cash flow, which fell to -$36.8 million. Spending on an investment asset would normally be reported under investing activities. Read the cash flow statement accordingly. The consulting business did not burn $36.8 million. About $0.9 million of the outflow relates to operations, and the rest is the token prepayment.

3. No cash collected from customers. Receivables rose from $0.75 million to $2.35 million, an increase of exactly the $1.6 million booked as revenue. Since no allowance or write-off was recorded, ATIF collected nothing from customers on a net basis over the six months, including the $0.75 million owed at July 31. Three customers each owe 27.6% of the balance. The management discussion still calls the receivables "highly liquid", which is hard to square with zero collections. On the cost side, the $1.04 million owed to the consulting firm was accrued but not paid either.

4. Going-concern warning, worded differently in two places. The notes say management "believes that these factors are being proactively managed." The management discussion goes further and says the losses, cash outflows and need for more capital "indicate the existence of an uncertainty that raises substantial doubt about our ability to continue as a going concern." The company's own case for its liquidity is that $1.5 million of cash plus $2.35 million of receivables cover $1.7 million of current liabilities. That depends on the receivables actually being collected (see point 3).

5. Dilution, and more of it after the period. The October offering sold 9,000,000 units at $3.26, each with a warrant to buy another share at $4.89. That took the share count from 1,313,373 to 10,313,373. The September 2026 6-K says 22,128,378 shares were outstanding after ATIF issued 2,815,005 shares to buy GoldCoin Labs. Without those, the count would be 19,313,373, exactly 9,000,000 more than at January 31. That matches the number of $4.89 warrants, but the filings we read do not say how those shares were issued.

6. Related parties and governance. The formal related-party balance is tiny: $565 owed to then-CFO Shibin Yu. However, the $600,000 "prepayment for consulting service fee" is money paid in advance to Mr. Liu Jun, the former CEO, for advisory services, and it has sat unchanged on the balance sheet since July 2025. A $328,747 refundable advance from a Mr. Li Meng, for a cancelled advisory deal, is still unpaid. The former CEO is also named in a pending J.P. Morgan Securities lawsuit seeking $5.06 million over a stock trade by a fund manager ATIF sold in 2022. That case is stayed pending FINRA arbitration, and no provision has been recorded. The Boustead Securities settlement ($1 million) was fully paid by December 2025. After the period, the CFO resigned on July 14, 2026, and CEO Dr. Kamran Khan also became interim CFO.

7. Sloppy statements. Several parts of the filing do not agree with each other:

• The equity statement splits the raise into $14.8 million for shares and $14.5 million for warrants, while Note 14 puts the whole $29.31 million into paid-in capital.
• Note 16 says the dissolved subsidiary ATIF BC "is presented as discontinued operations", but the income statement shows no discontinued-operations line.
• Statement headings refer to six-month periods in "2026, 2025 and 2024" when only two periods are shown.

None of these changes the totals. Together with an unnamed counterparty holding most of the company's assets, they are reason to treat the reported figures cautiously.

Takeaway: The smaller loss is not the main news. Less than four months after raising $29.3 million, ATIF had handed $35.9 million (89% of its assets) to an unnamed agent to buy a newly issued crypto token. It received tokens it valued at about $23 million in April and was still owed the rest. Customers paid none of the $1.6 million of consulting revenue during the half. Whether this company has value now depends on the AIAPP token's price and the agent delivering the rest, not on consulting.

Outlook

Management gives no revenue or earnings guidance. The MD&A says it plans to fund operations "primarily from cash generated from our operations and cash on hand." It also says it wants to expand consulting into Malaysia, Vietnam and Singapore while keeping its focus on North America. It reports $0.6 million of contracted consulting work not yet delivered, so revenue already under contract is small.

Since the period ended, ATIF has moved further into crypto. On July 30, 2026 it agreed to buy GoldCoin Labs, a BVI company incorporated in December 2025, for 2,815,005 new shares. Those shares were priced at $20 million based on ATIF's recent average trading price. GoldCoin is developing a "tokenized digital representation of physical gold" (one token per gram, backed 1:1 by gold held by a custodian). It is a division of Metra Group, a company ATIF had earlier tried to buy outright. The deal closed on September 9, 2026. The 6-K describes GoldCoin's products as still "subject to applicable regulatory requirements, custody and reserve arrangements, technology development and market adoption", so ATIF paid $20 million of stock for a business that is still being developed.

Our view: The consulting business is small (four clients, about a third of each fee kept after subcontracting), and none of this half's fees had been collected. What happens next depends on three things the next filing, the fiscal 2026 annual report on Form 20-F (fiscal year ended July 31, 2026; last year's was filed in December after a late-filing notice), should show:

1. How the AIAPP tokens are classified and valued at July 31, and whether there is an impairment, meaning a write-down to market value.
2. Whether the rest of the token order was delivered within the contracts' 12-month delivery windows, which ran out in August and October 2026, and what the company paid for the tokens it received.
3. Whether the $2.35 million of receivables were collected.

Until there are audited figures on these points, the balance sheet tells you more about ATIF than its income statement does.