Aureus Greenway Holdings Inc

Previous wording

Our businesses are subject to seasonality and typically the first quarter of each year is our busiest season of the year. Then, even during our busy season, our business activities are affected by weather conditions. In 2025, we believe that we experienced more than average rainy days during the first two months causing our revenue to be under pressure.

Current wording

Our businesses are subject to seasonality and typically the first quarter of each year is our busiest season of the year. Then, even during our busy season, our business activities are affected by weather conditions. In 2025, we experienced more than average rainy days during the first three months ended March 31, 2025 causing our revenue to be under pressure.

Previous wording

The DTE Agreement was renewed in 2022 and the renewed contractual price has been fully reflected in Q1 2025, the higher contractual price is a reflection of the inflationary environment that subsequently impacted the labor, fertilizer and chemical markets. The maintenance cost and contract with DTE may be subject to further increases in 2025 if the inflationary environment continues to impact our maintenance needs.

Current wording

The DTE Agreement was renewed in 2022 and the renewed contractual price has been fully reflected in Q1 2025, the higher contractual price is a reflection of the inflationary environment that subsequently impacted the labor, fertilizer and chemical markets. The maintenance cost and contract with DTE was further renewed in November 2025 and the contractual price has been increased by approximately 10% starting from November 2025.

Previous wording

As disclosed in our prospectus dated February 11, 2025, some of the net proceeds from the initial public offering will be used for renovation and upgrading of our golf courses, clubhouse and facilities. We have completed the roof replacement and exterior painting of our clubhouse located at Kissimmee Bay Country Club and there is no disruption to daily golf operations. Regarding Remington Golf Club, the greens are currently under renovation and upgrading. The golf course at Remington Golf Club has been temporarily closed for renovation starting from May 17, 2025 and the expected re-opening date will be in late September 2025. Therefore, the renovation project will cause an adverse effect on our business and results of operations and the impact was partially reflected in our results for the six months ended June 30, 2025.

Current wording

As disclosed in our prospectus dated February 11, 2025, some of the net proceeds from the initial public offering will be used for renovation and upgrading of our golf courses, clubhouse and facilities. We have completed an extensive renovation both interior and exterior of our clubhouse located at Kissimmee Bay Country Club through careful planning and scheduling, there had been no disruption to daily business operations. However, in case of Remington Golf Club, the golf club had to be temporarily closed for renovation starting from May 17, 2025. The renovation was successfully completed and the golf club has re-opened on October 3, 2025. During the renovation period, we removed all old greens at Remington Golf Club and installed brand new state of the art TifEagle greens. The renovation project had caused an adverse effect on our businesses revenue at Remington Golf Club. The results of operations and the financial impact has been reflected in our results for Q3 as well as the nine months ended September 30, 2025.

Previous wording

The unaudited condensed consolidated financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted in accordance with SEC rules and regulations. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of June 30, 2025, and results of operations and cash flows for the six months ended June 30, 2025 and 2024. The unaudited condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by the U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, and related notes included in the Company’s audited consolidated financial statements.

Current wording

The unaudited condensed consolidated financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted in accordance with SEC rules and regulations. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of September 30, 2025, and results of operations and cash flows for the nine months ended September 30, 2025 and 2024. The unaudited condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by the U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, and related notes included in the Company’s audited consolidated financial statements.

Previous wording

We have identified certain accounting policies that are significant to the preparation of our Group’s financial information. Some of our accounting policies involve subjective assumptions and estimates, as well as complex judgements relating to accounting items. In each case, the determination of these items requires management judgements based on information and financial data that may change in future periods. When reviewing our financial statements, you should consider: (i) our selection of accounting policies; and (ii) the results to changes in conditions and assumptions. We set forth below those accounting policies that we believe are of critical importance to us or involve the most significant estimates and judgements used in the preparation of our Group’s financial statements. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the consolidated financial statements include allowance for expected credit loss, allowance for deferred tax assets, the impairment assessment of property and equipment and estimated incremental borrowing rate of lease. Actual results may differ from these estimates.

Current wording

We have identified certain accounting policies that are significant to the preparation of our Group’s financial information. Some of our accounting policies involve subjective assumptions and estimates, as well as complex judgements relating to accounting items. In each case, the determination of these items requires management judgements based on information and financial data that may change in future periods. When reviewing our financial statements, you should consider: (i) our selection of accounting policies; and (ii) the results to changes in conditions and assumptions. We set forth below those accounting policies that we believe are of critical importance to us or involve the most significant estimates and judgements used in the preparation of our Group’s financial statements. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the consolidated financial statements include allowance for expected credit loss, allowance for deferred tax assets, the impairment assessment of property and equipment, estimated incremental borrowing rate of lease and assumptions used for the valuation of stock-based compensation. Actual results may differ from these estimates.

Previous wording

The Company sells annual green fee subscriptions to local patrons. The performance obligation of the annual subscription is for the Company to provide a patron with access to the golf course and cart, subject to availability of a tee time for a patron to play a single round on the 18-hole course; the round of golf is expected to be completed before sunset of the day of the booking of that tee time. The Company recognizes revenue from these annual subscriptions on a monthly basis over twelve months. The annual subscriptions are non-refundable. Payments for subscriptions in the form of cash or credit card are received in advance, and are recorded as contract liabilities-deferred revenue, and recognized to revenue at the end of each month. Management believes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the customers each month. That is, the benefit consumed by the customers is substantially similar for each month, even though the exact volume of services may vary. The Company concludes that the annual green fees subscription satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The annual subscriptions fees are fixed and there is no variable consideration, significant financing components or noncash consideration. There is no contract asset related to these annual green fee subscriptions. As of June 30, 2025 and December 31, 2024, the Company recorded contract liabilities - deferred revenue of $154,386 and $162,226, respectively.

Current wording

The Company sells annual green fee subscriptions to local patrons. The performance obligation of the annual subscription is for the Company to provide a patron with access to the golf course and cart, subject to availability of a tee time for a patron to play a single round on the 18-hole course; the round of golf is expected to be completed before sunset of the day of the booking of that tee time. The Company recognizes revenue from these annual subscriptions on a monthly basis over twelve months. The annual subscriptions are non-refundable. Payments for subscriptions in the form of cash or credit card are received in advance, and are recorded as contract liabilities-deferred revenue, and recognized to revenue at the end of each month. Management believes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the customers each month. That is, the benefit consumed by the customers is substantially similar for each month, even though the exact volume of services may vary. The Company concludes that the annual green fees subscription satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The annual subscriptions fees are fixed and there is no variable consideration, significant financing components or noncash consideration. There is no contract asset related to these annual green fee subscriptions. As of September 30, 2025 and December 31, 2024, the Company recorded contract liabilities - deferred revenue of $126,471 and $162,226, respectively.

Previous wording

The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded during the six months ended June 30, 2025 and 2024, respectively.

Current wording

The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded during the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Revenues disaggregated by major revenue streams for the three months and six months ended June 30, 2025 and 2024 are disclosed in the table below:

Current wording

Revenue disaggregated by major revenue streams for the three months and nine months ended September 30, 2025 and 2024 are disclosed in the table below:

Previous wording

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $271,569 or 12% was mainly due to the decrease in all revenue streams.

Current wording

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $371,590 or 14% was mainly due to the decrease in all revenue streams.

Previous wording

Revenue from golf operations decreased by $234,801 or 14% from $1,679,609 for the six months ended June 30, 2024 to $1,444,808 for the six months ended June 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $229,639 or 15%.

Current wording

Revenue from golf operations decreased by $304,035 or 15% from $1,974,651 for the nine months ended September 30, 2024 to $1,670,616 for the nine months ended September 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $292,257 or 17% and the decrease in annual membership dues from golf operations by $11,778 or 5%.

Previous wording

One-time green fees from golf operations accounted for 67% and 69% of total revenue for the six months ended June 30, 2025 and 2024, respectively. Decrease in one-time green fees by 15% resulted from the decrease in total number of rounds by 11% from approximately 36,000 rounds during the six months ended June 30, 2024 to approximately 32,000 rounds during the six months ended June 30, 2025 as well as the decrease in average price per round by 5% from $42 per round for the six months ended June 30, 2024 to $40 per round for the six months ended June 30, 2025 due to lower price was offered to the players as a result of less tourists visiting Florida during the current period because the inflation hinders the customers sentiment to play golf. The decrease in revenue was also due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club decreased by 17% in the second quarter.

Current wording

One-time green fees from golf operations accounted for 64% and 66% of total revenue for the nine months ended September 30, 2025 and 2024, respectively. Decrease in one-time green fees by 17% resulted from the decrease in total number of rounds by 14% from approximately 44,000 rounds during the nine months ended September, 2024 to approximately 38,000 rounds during the nine months ended September 30, 2025 as well as the decrease in average price per round by 5% from $40 per round for the nine months ended September 30, 2024 to $38 per round for the nine months ended September 30, 2025. The decrease in revenue was due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club decreased by 32% for the period.

Previous wording

Decrease in revenue from sales of food and beverage by $18,695 or 5% from $392,085 for the six months ended June 30, 2024 to $373,390 for the six months ended June 30, 2025, which was contributed by the decrease in quantities sold by 6% from approximately 63,000 for the six months ended Jue 30, 2024 to approximately 59,000 for the six months ended June 30, 2025 and the average unit price remained stable at $6 per unit for the six months ended June 30, 2025 and 2024. The decrease in quantity sold was in line with decrease in golf operations.

Current wording

Decrease in revenue from sales of food and beverage by $35,043 or 7% from $499,792 for the nine months ended September 30, 2024 to $464,749 for the nine months ended September 30, 2025, which was contributed by the decrease in quantities sold by 8% from approximately 80,000 for the nine months ended September 30, 2024 to approximately 74,000 for the nine months ended September 30, 2025 and the average unit price remained stable at $6 per unit for the nine months ended September 30, 2025 and 2024. The decrease in quantity sold was in line with decrease in golf operations.

Previous wording

Decrease in revenue from sales of merchandise by $10,416 or 14% from $75,824 for the six months ended June 30, 2024 to $65,408 for the six months ended June 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear and gloves by 16% as a result of the decrease in sales to customers playing golf during the six months ended June 30, 2025.

Current wording

Decrease in revenue from sales of merchandise by $14,723 or 16% from $91,451 for the nine months ended September 30, 2024 to $76,728 for the nine months ended September 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear and gloves by 20% as a result of the decrease in sales to customers playing golf during the nine months ended September 30, 2025.

Previous wording

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The decrease by $7,657 or 14% was mainly due to the decrease in demand for rental services for activities and events during the six months ended June 30, 2025.

Current wording

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The decrease by $17,789 or 24% was mainly due to the decrease in demand for rental services for activities and events during the nine months ended September 30, 2025.

Previous wording

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $46,305 or 7% was mainly due to the decrease in one-time green fees from golf operations and being partially offset by an increase in annual membership dues.

Current wording

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $100,021 or 23% was mainly due to the decrease in all revenue streams.

Previous wording

Revenue from golf operations decreased by $42,860 or 9% from $458,728 for the three months ended June 30, 2024 to $415,868 for the three months ended June 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $77,755 or 20% and offset by an increase in annual membership dues from golf operations by $34,895 or 46%.

Current wording

Revenue from golf operations decreased by $69,234 or 23% from $295,042 for the three months ended September 30, 2024 to $225,808 for the three months ended September 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $62,618 or 29% and the decrease in annual membership dues from golf operations by $6,616 or 8%.

Previous wording

Revenue from annual membership dues accounted for 18% and 12% of total revenue for the three months ended June 30, 2025 and 2024. It increased by $34,895 or 46% mainly due to the increase in demand from customers who paid annual membership dues for the three months ended June 30, 2025.

Current wording

Revenue from annual membership dues accounted for 22% and 18% of total revenue for the three months ended September 30, 2025 and 2024. It decreased by $6,616 or 8% mainly due to the decrease in demand from customers who paid annual membership dues for the three months ended September 30, 2025 because one of our golf courses was closed since May 2025.

Previous wording

One-time green fees from golf operations accounted for 51% and 59% of total revenue for the three months ended June 30, 2025 and 2024, respectively. Decrease in one-time green fees by 20% resulted from the decrease in total number of rounds by 23% from approximately 13,000 rounds during the three months ended June 30, 2024 to approximately 10,000 rounds during the three months ended June 30, 2025 and the average price per round remained stable at $30 per round for the three months ended June 30, 2024 and 2025. The decrease in revenue was also due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club decreased by 17% in the second quarter.

Current wording

One-time green fees from golf operations accounted for 45% and 49% of total revenue for the three months ended September 30, 2025 and 2024, respectively. Decrease in one-time green fees by 29% resulted from the decrease in total number of rounds by 25% from approximately 8,000 rounds during the three months ended September 30, 2024 to approximately 6,000 rounds during the three months ended September 30, 2025 and the average price per round remained stable at $26 and $27 per round for the three months ended September 30, 2024 and 2025 respectively. The decrease in revenue was also due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club decreased by 100% in the third quarter.

Previous wording

Increase in revenue from sales of food and beverage by $763 or 1% from $146,824 for the three months ended June 30, 2024 to $147,587 for the three months ended June 30, 2025, which was contributed by the increase in average unit price by 17% from $6 per unit for the three months ended June 30, 2024 to $7 for the three months ended June 30, 2025, being offset by the decrease in quantities sold by 4% from approximately 23,000 for the three months ended June 30, 2024 to approximately 22,000 for the three months ended June 30, 2025. The decrease in quantity sold was in line with decrease in golf operations.

Current wording

Decrease in revenue from sales of food and beverage by $16,348 or 15% from $107,707 for the three months ended September 30, 2024 to $91,359 for the three months ended September 30, 2025, which was contributed by the decrease in quantities sold by 12% from approximately 17,000 for the three months ended September 30, 2024 to approximately 15,000 for the three months ended September 30, 2025 and the average unit price remained stable at $6 per unit for the three months ended September 30, 2024 and 2025. The decrease in quantity sold was in line with decrease in golf operations.

Previous wording

Decrease in revenue from sales of merchandise by $3,828 or 15% from $24,732 for the three months ended June 30, 2024 to $20,904 for the three months ended June 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear and gloves by 17% as a result of the decrease in sales to customers playing golf during the three months ended June 30, 2025.

Current wording

Decrease in revenue from sales of merchandise by $4,307 or 28% from $15,627 for the three months ended September 30, 2024 to $11,320 for the three months ended September 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear by 39% as a result of the decrease in sales to customers playing golf during the three months ended September 30, 2025.

Previous wording

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. It remained stable for the three months ended June 30, 2025 and 2024.

Current wording

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The decrease by $10,132 or 55% was mainly due to the decrease in demand for rental services for activities and events during the three months ended September 30, 2025.

Previous wording

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $1,816,837 for the six months ended June 30, 2024 to $2,004,069 for the six months ended June 30, 2025, which was primarily due to the increase in salaries and benefits and other general and administrative expenses and partially offset by the decreases in golf operating costs during the current period with details discussed below.

Current wording

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $2,533,469 for the nine months ended September 30, 2024 to $5,215,247 for the nine months ended September 30, 2025, which was primarily due to the increase in salaries and benefits and other general and administrative expenses and partially offset by the decreases in golf operating costs during the current period with details discussed below.

Previous wording

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Decrease in golf operating costs by $57,204 or 8% from $706,695 for the six months ended June 30, 2024 to $649,491 for the six months ended June 30, 2025 which was attributable to the decrease in golf course maintenance related expenses as a result of decrease in number of rounds by golf players and resulted in reduction in course maintenance and improvements projects carried out by Down-to-Earth prior to the renovation project started.

Current wording

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Decrease in golf operating costs by $45,811 or 4% from $1,030,225 for the nine months ended September 30, 2024 to $984,414 for the nine months ended September 30, 2025 which was attributable to the decrease in golf course maintenance related expenses as a result of decrease in number of rounds by golf players and resulted in reduction in course maintenance and improvements projects carried out by Down-to-Earth prior to the renovation project started.

Previous wording

The increase in cost of food and beverage by $11,004 or 10% from $114,040 for the six months ended June 30, 2024 to $125,044 for the six months ended June 30, 2025 was mainly due to higher raw material prices for food and beverages during the period.

Current wording

The increase in cost of food and beverage by $5,569 or 4% from $146,762 for the nine months ended September 30, 2024 to $152,331 for the nine months ended September 30, 2025 was mainly due to higher raw material prices for food and beverages during the period.

Previous wording

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Increase in cost of merchandise sales by $1,885 was mainly due to the increase in purchasing cost of merchandise goods by our suppliers because inflation increases their production and operational costs.

Current wording

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Decrease in cost of merchandise sales by $417 was in line with the decrease in revenue from sales of merchandise.

Previous wording

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $145,297 or 38% was primarily due to the increase in salaries paid to the Chief Financial Officer by approximately $90,000 and the directors fee paid to the audit committee members by approximately $71,000 and partially offset by the decrease in director’s remuneration paid to Mr. Chi Ping Cheung by approximately $10,000.

Current wording

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $2,145,148 or 415% was primarily due to the increase in stock-based compensation by $1,841,632 in relation to the grant of stock options, the increase in salaries paid to the Chief Financial Officer by approximately $118,000 and the increase in directors’ fee by approximately $225,000.

Previous wording

Our depreciation mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $102,797 and $100,038 for the six months ended June 30, 2025 and 2024 respectively.

Current wording

Our depreciation mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $158,049 and $150,391 for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $83,491 or 17% from $484,337 for the six months ended June 30, 2024 to $567,828 for the six months ended Jue 30, 2025 was mainly attributable to the increase in rental expenses, travelling expenses and director’s and officer’s liability insurance.

Current wording

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $569,631 or 88% from $646,711 for the nine months ended September 30, 2024 to $1,216,342 for the nine months ended September 30, 2025 was mainly attributable to the increase in professional fees by approximately $273,000, rental expenses by approximately $70,000, travelling expenses by approximately $83,000, director’s and officer’s liability insurance by approximately $68,000 and charitable donations by approximately $68,000.

Previous wording

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $743,312 for the three months ended June 30, 2024 to $1,028,735 for the three months ended June 30, 2025, which was primarily due to the increases in salaries and benefits and other general and administrative expenses during the current period with details discussed below.

Current wording

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $716,632 for the three months ended September 30, 2024 to $3,211,178 for the three months ended September 30, 2025, which was primarily due to the increases in salaries and benefits and other general and administrative expenses during the current period with details discussed below.

Previous wording

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating costs by $10,768 or 3% from $315,464 for the three months ended June 30, 2024 to $326,232 for the three months ended June 30, 2025 which was attributable to the increase in equipment repairs and maintenance by approximately $8,000 during the period.

Current wording

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating costs by $11,393 or 4% from $323,530 for the three months ended September 30, 2024 to $334,923 for the three months ended September 30, 2025 which was attributable to the increase in landscaping by approximately $14,000 during the period.

Previous wording

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Increase in cost of merchandise sales by $2,703 mainly due to the increase in purchasing cost of merchandise goods by our suppliers because inflation increases their production and operational costs.

Current wording

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Decrease in cost of merchandise sales by $2,302 was in line with the decrease in revenue from sales of merchandise.

Previous wording

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $107,158 or 76% was primarily due to the increase in salaries paid to the Chief Financial Officer by approximately $15,000, the increase in the directors fee paid to the audit committee members by approximately $39,000 and the increase in director’s remuneration paid to Mr. Chi Ping Cheung by approximately $30,000.

Current wording

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $1,999,851 or 1,434% was primarily due to the increase in stock-based compensation by $1,841,632 in relation to the grant stock options, the increase in salaries paid to the Chief Financial Officer by approximately $28,000 and the increase in the directors’ fee by approximately $155,000.

Previous wording

Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $52,013 and $50,031 for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $55,252 and $50,353 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $146,882 or 80% from $182,822 for the three months ended June 30, 2024 to $329,704 for the three months ended June 30, 2025 was mainly attributable to the increase in professional fees by approximately $92,000, rental expenses by approximately $30,000, travelling expenses by approximately $18,000 and director’s and officer’s liability insurance by approximately $14,000.

Current wording

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $486,140 or 299% from $162,374 for the three months ended September 30, 2024 to $648,514 for the three months ended September 30, 2025 was mainly attributable to the increase in professional fees by approximately $253,000, rental expenses by approximately $30,000, travelling expenses by approximately $53,000, director’s and officer’s liability insurance by approximately $46,000 and charitable donations by approximately $68,000.

Previous wording

Other income (expense) mainly includes interest expenses regarding the bank and other borrowings incurred, bank interest income, dividend from money market accounts and additional service charges from customers who paid by credit cards. The increase in other income (expense) by $154,013 for the six months ended June 30, 2025 and $87,254 for the three months ended June 30, 2025 was mainly due to the dividend income generated from the cash deposit in money market accounts upon successful listing of common stocks in Nasdaq.

Current wording

Other income (expense) mainly includes interest expenses regarding the bank and other borrowings incurred, bank interest income, dividend from money market accounts and additional service charges from customers who paid by credit cards. The increase in other income (expense) by $354,467 for the nine months ended September 30, 2025 and $226,024 for the three months ended September 30, 2025 was mainly due to the dividend income generated from the cash deposit in money market accounts upon successful listing of common stocks in Nasdaq.

Previous wording

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new federal statutory rate of 21% to the income tax amount recorded for the three and six months ended June 30, 2025 and 2024.

Current wording

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new federal statutory rate of 21% to the income tax amount recorded for the three and nine months ended September 30, 2025 and 2024.

Previous wording

As of June 30, 2025, the Company had $498,464 of net operating losses (“NOLs”) which can be carried forward indefinitely.

Current wording

As of September 30, 2025, the Company had $949,608 of net operating losses (“NOLs”) which can be carried forward indefinitely.

Previous wording

The Company recorded income tax expenses of $90,811 for the six months ended June 30, 2025 and income tax expenses of $137,837 for the six months ended June 30, 2024. The effective tax rate increased from 34.6% for the six months ended June 30, 2024 to 134.0% for the six months ended June 30, 2025, which was mainly due to the increase in operating costs of approximately $270,000 incurred by the Company which is not subject to income tax. The Company recorded income tax benefits of $53,518 and $22,145 for the three months ended June 30, 2025 and 2024, respectively, the increase in income tax benefits was mainly due to the reversal of deferred tax liabilities for the period.

Current wording

The Company recorded income tax benefits of $29,631 for the nine months ended September 30, 2025 and income tax expenses of $66,129 for the nine months ended September 30, 2024. The effective tax rate decreased from 54.7% for the nine months ended September 30, 2024 to 1.1% for the nine months ended September 30, 2025, which was mainly due to the overprovision of DTA for the first half. The Company recorded income tax benefits of $120,442 and $71,708 for the three months ended September 30, 2025 and 2024, respectively. The increase in income tax benefits was mainly due to the reversal of deferred tax liabilities for the period.

Previous wording

Our net loss for the six months ended June 30, 2025 was $23,049 while our net income for the six months ended June 30, 2024 was $260,283. The decrease in net income by $283,332 or 109% was mainly due to the decrease in our revenue and the increase in our operating costs, being partially offset by the increase in our other income during the six months ended June 30, 2025.

Current wording

Our net loss for the nine months ended September 30, 2025 was $2,548,470 while our net income for the nine months ended September 30, 2024 was $54,671. The decrease in net income by $2,603,141 or 4,761% was mainly due to the decrease in our revenue, the increase in our operating costs and the increase in our other expenses during the nine months ended September 30, 2025.

Previous wording

Our net loss for the three months ended June 30, 2025 and 2024, was $289,261 and $69,101, respectively. The increase in net loss by $220,160 or 319% was mainly due to the decrease in our revenue and the increase in our operating costs, being partially offset by the increase in our other income during the three months ended June 30, 2025.

Current wording

Our net loss for the three months ended September 30, 2025 and 2024, was $2,525,421 and $205,612, respectively. The increase in net loss by $2,319,809 or 1,128% was mainly due to the decrease in our revenue, the increase in our operating costs and the increase in our other expenses during the three months ended September 30, 2025.