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. For the three months ended March 31, 2026, we did not experience an unusual number of rainy days, and our total revenue increased by 11% compared to the same period in 2025, driven by higher customer demand across all revenue streams.

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. For the six months ended June 30, 2026, (i) we did not experience an unusual number of rainy days, and (ii) due to the fact that Remington was closed for renovation starting May 2025 and that in May and June 2026 Remington was in full operations, as a result our total revenue increased by 13% compared to the same period in 2025, driven by higher customer demand as well as higher prices across all revenue streams.

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 has 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.

Current wording

The DTE Agreement was renewed in November 2025 and the renewed contractual price has been fully reflected during the six months ended June 30, 2026. The 10% higher contractual price is a reflection of the inflationary environment that has subsequently negatively impacted the labor, fertilizer and chemical markets.

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 March 31, 2026, and results of operations and cash flows for the three months ended March 31, 2026 and 2025. The unaudited condensed consolidated balance sheet as of December 31, 2025 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, 2025 and 2024, 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 June 30, 2026, and results of operations and cash flows for the six months ended June 30, 2026 and 2025. The unaudited condensed consolidated balance sheet as of December 31, 2025 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, 2025 and 2024, and related notes included in the Company’s audited consolidated financial statements.

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 March 31, 2026 and December 31, 2025, the Company recorded contract liabilities - deferred revenue of $164,683 and $145,980, 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 June 30, 2026 and December 31, 2025, the Company recorded contract liabilities - deferred revenue of $190,959 and $145,980, respectively.

Previous wording

Revenues disaggregated by major revenue streams for the three months ended March 31, 2026 and 2025 are disclosed in the table below:

Current wording

Revenues disaggregated by major revenue streams for the three months and six months ended June 30, 2026 and 2025 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 increase in revenue period over period by $141,007 or 11% was mainly due to the increase in all revenue stream.

Current wording

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall increase in revenue period over period by $247,233 or 13% was mainly due to the increase in one-time green fees, sales of food and beverage, sales of merchandise and ancillary revenue.

Previous wording

Increase in revenue from sales of food and beverage by $19,002 or 8% from $225,803 for the three months ended March 31, 2025 to $244,805 for the three months ended March 31, 2026, which was contributed by the increase in quantities sold by 4% from approximately 37,000 for the three months ended March 31, 2025 to approximately 38,000 for the three months ended March 31, 2026 and the average unit price remained stable at $6 per unit for the three months ended March 31, 2025 and $6 for the three months ended March 31, 2026. The increase in quantity sold was in line with increase in golf operations.

Current wording

Increase in revenue from sales of food and beverage by $33,820 or 9% from $373,390 for the six months ended June 30, 2025 to $407,210 for the six months ended June 30, 2026, which was contributed by the increase in quantities sold by 8% from approximately 59,000 for the six months ended June 30, 2025 to approximately 64,000 for the six months ended June 30, 2026 and the average unit price remained stable at $6 per unit for the six months ended June 30, 2026 and 2025. The increase in quantity sold was in line with increase in golf operations.

Previous wording

Revenue from golf operations increased by $100,633 or 10% from $1,028,940 for the three months ended March 31, 2025 to $1,129,573 for the three months ended March 31, 2026, which was driven by the increase in both one-time green fees from golf operations by $64,032 or 6% and annual membership dues from golf operations by $36,601 or 107%.

Current wording

Revenue from golf operations increased by $77,532 or 19% from $415,868 for the three months ended June 30, 2025 to $493,400 for the three months ended June 30, 2026, which was driven by the increase in one-time green fees from golf operations by $116,011 or 38% and offset by a decrease in annual membership dues from golf operations by $38,479 or 35%.

Previous wording

Revenue from annual membership dues accounted for 5% and 3% of total revenue for the three months ended March 31, 2026 and 2025. Such increase was mainly due to the increase in demand from customers who paid annual membership dues for the three months ended March 31, 2026.

Current wording

Revenue from annual membership dues accounted for 10% and 18% of total revenue for the three months ended June 30, 2026 and 2025. It decreased by $38,479 or 35% mainly due to the decrease in demand from customers who paid annual membership dues for the three months ended June 30, 2026.

Previous wording

One-time green fees from golf operations accounted for 72% and 75% of total revenue for the three months ended March 31, 2026 and 2025, respectively. Increase in one-time green fees by 6% resulted from the increase in average price per round by 7% from $45 per round for the three months ended March 31, 2025 to $48 per round for the three months ended March 31, 2026 and the total number of rounds remained stable at approximately 22,000 rounds during the three months ended March 31, 2025 and approximately 22,000 rounds during the three months ended March 31, 2026.

Current wording

One-time green fees from golf operations accounted for 59% and 51% of total revenue for the three months ended June 30, 2026 and 2025, respectively. Increase in one-time green fees by 38% resulted from the increase in total number of rounds by 30% from approximately 10,000 rounds during the three months ended June 30, 2025 to approximately 13,000 rounds during the three months ended June 30, 2026 and the average price per round increased from $30 per round for the three months ended June 30, 2025 to $32 per round for the three months ended June 30, 2026. The increase 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 increased by 89% in the second quarter.

Previous wording

Increase in revenue from sales of merchandise by $13,784 or 31% from $44,504 for the three months ended March 31, 2025 to $58,288 for the three months ended March 31, 2026, which was contributed by the increase in sales of men’s wear, golf balls and headwear by 31% as a result of the increase in sales to customers playing golf during the three months ended March 31, 2026.

Current wording

Increase in revenue from sales of merchandise by $7,464 or 36% from $20,904 for the three months ended June 30, 2025 to $28,368 for the three months ended June 30, 2026, which was contributed by the increase in sales of golf balls, men’s wear and gloves by 34% as a result of the increase in sales to customers playing golf during the three months ended June 30, 2026.

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 increase by $7,588 or 26% was mainly due to increase in demand for rental services for activities and events during the three months ended March 31, 2026.

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 increase by $6,412 or 36% was mainly due to the increase in demand for rental services for activities and events during the three months ended June 30, 2026.

Previous wording

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management, operating team, cashier and administrative personnel. The increase in salaries and benefits by $1,042,188 or 380% was primarily due to the recognition of stock-based compensation of $996,000 in relation to the restricted stocks issued to directors as direct compensation for their services and the increase in directors fee and an increase in compensation paid to existing and former directors for services provided during the period, including transition and operational support services, by approximately $50,000.

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 $1,059,838 or 203% was primarily due to the recognition of stock-based compensation of $996,000 in relation to the restricted stocks issued to directors as direct compensation for their services and the increase in directors fee and compensation paid to existing and former directors for services provided during the period, including transition and operational support services, by approximately $90,000.

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 $817,162 or 343% from $238,124 for the three months ended March 31, 2025 to $1,055,286 for the three months ended March 31, 2026 was mainly attributable to the recognition of stock-based compensation of $438,750 to the consultant of the Company as part of their compensation, the increase in legal and consulting fees by approximately $159,000, travelling expenses by approximately $75,000, director’s and officer’s liability insurance by approximately $24,000 and advertising and marketing expenses by approximately $10,000.

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 $1,185,855 or 209% from $567,828 for the six months ended June 30, 2025 to $1,753,683 for the six months ended June 30, 2026 was mainly attributable to the recognition of stock-based compensation of $540,000 to the consultant of the Company as part of their compensation, the increase in legal, professional and consulting fees by approximately $318,000, travelling expenses by approximately $90,000, director’s and officer’s liability insurance by approximately $43,000 and advertising and marketing expenses by approximately $10,000.

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 $975,334 for the three months ended March 31, 2025 to $2,928,364 for the three months ended March 31, 2026, which was primarily due to the increases in golf operating costs, 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 $1,028,735 for the three months ended June 30, 2025 to $1,471,927 for the three months ended June 30, 2026, which was primarily due to the increases in golf operating costs, salaries and benefits and other general and administrative expenses during the current period with details discussed below.

Previous wording

Golf operating expenses consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating expenses by $72,549 or 22% from $323,259 for the three months ended March 31, 2025 to $395,808 for the three months ended March 31, 2026 which was attributable to the contractual price for the maintenance contract with Down-to-Earth, which increased as a result of the contract renewal.

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 $54,791 or 17% from $326,232 for the three months ended June 30, 2025 to $381,023 for the three months ended June 30, 2026 which was attributable to the contractual price for the maintenance contract with Down-to-Earth, which increased as a result of the contract renewal as well as an increase in operating lease costs due to leasing additional golf carts and equipment.

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 $232,618 for the three months ended March 31, 2026 was mainly due to the increase in (i) interest income from investment in convertible note; (ii) dividend income generated from cash deposit in money market accounts; and (iii) bank interest income.

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 $797,137 for the six months ended June 30, 2026 was mainly due to the increase in (i) interest income from investment in convertible note; (ii) dividend income generated from cash deposit in money market accounts; and (iii) bank interest income.

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 months ended March 31, 2026 and 2025.

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 six months ended June 30, 2026 and 2025.

Previous wording

As of March 31, 2026, the Company had $811,392 of net operating losses (“NOLs”) which can be carried forward indefinitely.

Current wording

As of June 30, 2026, the Company had $1,087,981 of net operating losses (“NOLs”) which can be carried forward indefinitely.

Previous wording

The Company recorded income tax expenses of $91,035 for the three months ended March 31, 2026 and income tax expenses of $144,329 for the three months ended March 31, 2025. Please refer to Note 12 – Income Tax to the Unaudited Condensed Consolidated Financial Statements for more details.

Current wording

Please refer to Note 12 – Income Tax to the Unaudited Condensed Consolidated Financial Statements for more details.

Previous wording

Our net loss for the three months ended March 31, 2026 was $1,259,899 while our net income for the three months ended March 31, 2025 was $266,212. The change from net income to net loss was mainly due to the increase in our operating costs was higher than the increase in our revenue and our other income during the three months ended March 31, 2026.

Current wording

Our net loss for the six months ended June 30, 2026 and 2025 was $1,299,161 and $23,049, respectively. The increase in net loss by $1,276,112 or 5,537% was mainly due to the increase in our operating costs was higher than the increase in our revenue and our other income during the six months ended June 30, 2026.

Previous wording

Accounts receivable mainly represent amounts due from customers paid by credit cards for provision of golf operations services and sales of merchandise and food and beverages which are recorded net of allowance for expected credit loss. The balances remained stable as of March 31, 2026 and December 31, 2025.

Current wording

Accounts receivable mainly represent credit cards or cash deposits in transit, amounts due from customers paid by credit cards for provision of golf operations services and sales of merchandise and food and beverages which are recorded net of allowance for expected credit loss. Increase in balance was mainly due to the more customers who paid by credit cards near the period end.

Previous wording

As of March 31, 2026, the carrying amount of the investment in convertible note was $20,049,315. No event of default had occurred, and the Company has not triggered the conversion feature.

Current wording

As of June 30, 2026, the carrying amount of the investment in convertible note was $20,547,945. No event of default had occurred, and the Company has not triggered the conversion feature.

Previous wording

Our inventories consist of merchandise goods such as golf balls, gloves, men’s wear and women’s wears, food and beverages. The Company keeps low inventories since the turnaround time is short.

Current wording

Our inventories consist of merchandise goods such as golf balls, gloves, men’s wear and women’s wears. The Company keeps low inventories since the turnaround time is short.

Previous wording

Prepaid expenses represent the prepayment for (i) the consultancy service of $293,750; (ii) the prepaid annual listing fee to Nasdaq of $62,966; (iii) the director’s and officer’s liability insurance premium of $41,200; and (iv) other prepaid expenses of $81,500 which was classified as current portion. These prepaid amounts are recognized as expenses over the respective service periods as the related benefits are received.

Current wording

Prepaid expenses represent the prepayment for (i) the consultancy service of $256,250; (ii) the prepaid annual listing fee to Nasdaq of $44,890; and (iii) the director’s and officer’s liability insurance premium of $8,879. These prepaid amounts are recognized as expenses over the respective service periods as the related benefits are received.

Previous wording

On March 17, 2025, the Company entered into a Strategic Services Agreement with Cross Border Capital Limited (“CBCL”), a Hong Kong-based advisory firm, pursuant to which CBCL agreed to provide the Company with business development leads for the acquisition of golf properties in Asia, golf property management contracts, and strategic corporate relationships in China, Japan, South Korea, Taiwan, and Singapore, for a period of 36 months ending March 14, 2028. The total fee under the agreement is $450,000, all of which was paid during fiscal year 2025. The agreement also provides for a success fee equal to 10% of the total contract value or profits of any transaction completed in connection with CBCL’s services. The total amount in the contract will be amortized ratably to the service period since the services are expected to be provided evenly throughout the contract period. During the three months ended March 31, 2026, $37,500 of consultancy service fee was recognized in statement of operations and the remaining prepaid amount was recognized as prepaid expenses with current portion of $150,000 and non-current portion of $143,750.

Current wording

On March 17, 2025, the Company entered into a Strategic Services Agreement with Cross Border Capital Limited (“CBCL”), a Hong Kong-based advisory firm, pursuant to which CBCL agreed to provide the Company with business development leads for the acquisition of golf properties in Asia, golf property management contracts, and strategic corporate relationships in China, Japan, South Korea, Taiwan, and Singapore, for a period of 36 months ending March 14, 2028. The total fee under the agreement is $450,000, all of which was paid during fiscal year 2025. The agreement also provides for a success fee equal to 10% of the total contract value or profits of any transaction completed in connection with CBCL’s services. The total amount in the contract will be amortized ratably to the service period since the services are expected to be provided evenly throughout the contract period. During the six months ended June 30, 2026, $75,000 of consultancy service fee was recognized in statement of operations and the remaining prepaid amount was recognized as prepaid expenses with current portion of $150,000 and non-current portion of $106,250.

Previous wording

Regarding the annual listing fee starting from February 12, 2026 with gross payment of $72,500 and prepaid obligation insurance for directors and officers starting from July 25, 2025 with gross payment of $129,994, the service contract has one year term and the prepaid amount was amortized throughout the contract period starting from the date of contract and the amortization costs were recognized as other general and administration expenses while the remaining balance amounting to $104,166 in aggregate was recognized as current portion of prepaid expenses.

Current wording

Regarding the annual listing fee starting from February 12, 2026 with gross payment of $72,500 and prepaid obligation insurance for directors and officers starting from July 25, 2025 with gross payment of $129,994, the service contract has one year term and the prepaid amount was amortized throughout the contract period starting from the date of contract and the amortization costs were recognized as other general and administration expenses while the remaining balance amounting to $53,769 in aggregate was recognized as current portion of prepaid expenses.

Previous wording

Accounts payable and accrued liabilities represented the payable to the vendors for the course upkeep costs, credit cards charge payables, sales tax payables and property tax payable. Decrease in accounts payable and accrued liabilities balance by $262,210 or 38% from $688,927 as of December 31, 2025 to $426,717 as of March 31, 2026 was mainly due to the decrease in accrued expenses by approximately $147,000 as a result of settlement of accrued audit fee by $115,000 and decrease in property tax payable by approximately $78,000 due to the settlement of $104,000 during the current period.

Current wording

Accounts payable and accrued liabilities represented the payable to the vendors for the course upkeep costs, credit cards charge payables, sales tax payables and property tax payable. Decrease in accounts payable and accrued liabilities balance by $276,665 or 40% from $688,927 as of December 31, 2025 to $412,262 as of June 30, 2026 was mainly due to the decrease in accrued expenses by approximately $88,000, decrease in accrued salaries of approximately $60,000, decrease in property tax payable by approximately $52,000 and decrease in accounts payable of approximately $43,000 during the current period.

Previous wording

Contract liabilities – deferred revenue represented the annual membership dues received in advance before the usage of golf course by the customers. The increase in this balance by $18,703 or 13% was mainly due to the annual membership dues being received in advance outweighed the revenue recognized during the three months ended March 31, 2026.

Current wording

Contract liabilities – deferred revenue represented the annual membership dues received in advance before the usage of golf course by the customers. The increase in this balance by $44,979 or 31% was mainly due to the annual membership dues being received in advance outweighed the revenue recognized during the six months ended June 30, 2026.

Previous wording

The operating leases liabilities represented the leases for corporate office, golf cars and golf equipment for terms of four to five years. The operating leases – current remained stable at $230,357 and $242,256 as of March 31, 2026 and December 31, 2025, respectively.

Current wording

The operating leases liabilities represented the leases for golf cars and golf equipment for terms of four to five years. The operating leases – current remained stable at $218,343 and $242,256 as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

*On January 28, 2026, Mr. Cheung Ching Ping resigned as Chairman of the Board and a Director of the Board, effective asof January 29, 2026.

Current wording

*On January 28, 2026, Mr. Cheung Ching Ping resigned as Chairman of the Board and a Director of the Board, effective as of January 29, 2026.

Previous wording

During the three months ended March 31, 2026, our net cash provided by operating activities was approximately $385,085, primarily arising from net loss of $1,259,899, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash item mainly consisted of depreciation of $63,750, stock-based compensation of $1,434,750, interest income receivable from investment in convertible note of $49,315 and gain on disposal of club memberships of $2,502. Changes in operating assets and liabilities mainly include (i) a decrease in prepaid expenses of $326,509 mainly due to the disposal of three club membership with carrying amount of $378,834; (ii) a decrease in accounts payable, other payables and accrued liabilities of $262,210 due to decrease in accrued expenses and property tax payable; (iii) a decrease in deferred tax assets of $94,228; and (iv) a increase in contract liabilities of $18,703 due to the annual membership dues being received in advance outweighed the revenue recognized during the three months ended March 31, 2026.

Current wording

During the six months ended June 30, 2026, our net cash provided by operating activities was approximately $91,804, primarily arising from net loss of $1,299,161, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash item mainly consisted of depreciation of $127,586, stock-based compensation of $1,536,000, interest income receivable from investment in convertible note of $547,945 and gain on disposal of club memberships of $2,502. Changes in operating assets and liabilities mainly include (i) a decrease in prepaid expenses of $495,905 mainly due to the disposal of three club membership with carrying amount of $378,834; (ii) a decrease in accounts payable, other payables and accrued liabilities of $276,665 due to decrease in accrued expenses and property tax payable; (iii) a decrease in deferred tax assets of $20,932; and (iv) an increase in contract liabilities of $44,979 due to the annual membership dues being received in advance outweighed the revenue recognized during the six months ended June 30, 2026.

Previous wording

During the three months ended March 31, 2025, our net cash used in operating activities was approximately $81,193, primarily arising from net income of $266,212, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash item mainly consisted of depreciation of $50,784. Changes in operating assets and liabilities mainly include (i) an increase in accounts receivables of $41,948 due to more customers who paid by credit cards near the period end; (ii) an increase in prepaid expenses of $447,981 due to the prepaid consultancy fee, prepaid annual listing fee to Nasdaq and prepaid director’s and officer’s liability insurance premium during the current period as mentioned above; and (iii) an decrease in accounts payable, other payables and accrued liabilities of $90,902 due to decrease in accrued expenses and property tax payable; and being partially offset by (iv) a decrease in deferred tax assets of $133,858 due to the utilization of NOLs for the current period; and (v) an increase in contract liabilities of $63,444 due to a large portion of annual membership dues being received during the current period of 2025 for services to be used by customers partly in fiscal year 2025.

Current wording

During the six months ended June 30, 2025, our net cash used in operating activities was approximately $337,364, primarily arising from net loss of $23,049, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash items mainly consisted of depreciation of $102,797 and unpaid director’s remuneration of $60,000. Changes in operating assets and liabilities mainly include (i) an increase in prepaid expenses of $490,560 due to the prepaid consultancy fee, prepaid annual listing fee to Nasdaq and prepaid director’s and officer’s liability insurance premium during the current period as mentioned above; (ii) a decrease in accounts payable and accrued liabilities of $64,846 due to the decrease in property tax payable by approximately $52,000; and (iii) a decrease in deferred tax assets of $95,059 due to the utilization of NOLs in the current period.

Previous wording

During the three months ended March 31, 2026, cash flows used in investing activities were mainly for the investment in convertible note of $20,000,000 and purchase of property and equipment of $27,014 for the building improvements.

Current wording

During the six months ended June 30, 2026, cash flows used in investing activities were mainly for the investment in convertible note of $20,000,000 and purchase of property and equipment of $33,040 for the building improvements.

Previous wording

During the three months ended March 31, 2026, cash provided by financing activities was the result of net proceeds from issue of common stocks of $8,073,933, proceeds from the exercise of placing agent warrants of 601,500, and was partially offset by net repayments of related party loans of $181,843.

Current wording

During the six months ended June 30, 2026, cash provided by financing activities was the result of net proceeds from issue of common stocks and pre-funded warrants of $8,073,933, proceeds from the exercise of pre-funded warrants, common A warrants and placing agent warrants of $5,615,990, and was partially offset by net repayments of related party loans of $216,598.

Previous wording

During the three months ended March 31, 2025, cash provided by financing activities was the result of net proceeds from issue of common stocks of $10,654,093 and partially offset by net repayments of related party loans of $2,336,160, repayments of bank and other borrowings of $192,378 and payment of deferred offering costs during the period right before the successful listing.

Current wording

During the six months ended June 30, 2025, cash provided by financing activities was the result of net proceeds from issue of common stocks of $10,654,093 and partially offset by net repayments of related party loans of $2,336,160, repayments of bank and other borrowings of $192,378 and payment of deferred offering costs of $171,180 during the period right before the successful listing.

Previous wording

We incurred capital expenditures of $27,014 and $14,924 for the three months ended March 31, 2026 and 2025, respectively, which mainly related to the clubhouse improvements and purchase of pump station, respectively.

Current wording

We incurred capital expenditures of $33,040 and $455,518 for the six months ended June 30, 2026 and 2025, respectively, which mainly related to the clubhouse improvements and purchase of pump station, respectively.

Previous wording

In order to meet the debt obligations and operating needs of our business, our management expects to satisfy the cash flow needs and through (i) maintaining stable relationships with banks in order to renew the bank borrowings upon maturity or to arrange for additional banking facilities for use when necessary; (ii) closely monitoring the collection status of accounts receivable and actively following up with our customers for settlements; (iii) diversifying and broadening our customer base to avoid reliance on particular customers and to expand our sources of revenue and cash flow; (iv) effectively managing accounts payable and negotiating for longer credit periods from suppliers, when necessary; (v) obtaining financial support from our Controlling Shareholder and investors to meet short-term operating expenses; and (vi) continuing to focusing on improving operational efficiency and cost reductions and enhancing efficiency.

Current wording

In order to meet the debt obligations and operating needs of our business, our management expects to satisfy the cash flow needs and through (i) closely monitoring the collection status of accounts receivable and actively following up with our customers for settlements; (ii) diversifying and broadening our customer base to avoid reliance on particular customers and to expand our sources of revenue and cash flow; (iii) effectively managing accounts payable and negotiating for longer credit periods from suppliers, when necessary; and (iv) continuing to focusing on improving operational efficiency and cost reductions and enhancing efficiency.

Previous wording

As of March 31, 2026, the Company held $17.5 million cash and cash equivalents and $20.1 million investment in convertible note. This investment in convertible note is not a cash equivalent. It matures on March 23, 2027, bears interest at 10% per annum, and is not convertible at the holder’s option unless an event of default occurs. Accordingly, the note does not contribute to the Company’s short-term liquidity for working capital or operating needs. Management expects the note to be settled in cash at maturity (or earlier prepayment) and does not rely on it to fund ongoing operations.

Current wording

As of June 30, 2026, the Company held $22.2 million cash and cash equivalents and $20.5 million investment in convertible note. This investment in convertible note is not a cash equivalent. It matures on March 23, 2027, bears interest at 10% per annum, and is not convertible at the holder’s option unless an event of default occurs. Accordingly, the note does not contribute to the Company’s short-term liquidity for working capital or operating needs. Management expects the note to be settled in cash at maturity (or earlier prepayment) and does not rely on it to fund ongoing operations.

Previous wording

Taking into consideration the successful IPO listing on the Nasdaq Capital Market in February 2025, the private placement in July 2025, the Company’s existing cash and cash equivalents of $17.5 million, expected cash flows from operations, and the measures described above, management believes that the Company has sufficient liquidity to meet its anticipated cash needs for at least the next twelve months from the date of this report. The investment in convertible note does not impair liquidity, as it is separate from the Company’s cash resources and will not require any cash outlay by the Company prior to its maturity.

Current wording

Taking into consideration the successful IPO listing on the Nasdaq Capital Market in February 2025, the private placement in July 2025, the Company’s existing cash and cash equivalents of $22.2 million, expected cash flows from operations, and the measures described above, management believes that the Company has sufficient liquidity to meet its anticipated cash needs for at least the next twelve months from the date of this report. The investment in convertible note does not impair liquidity, as it is separate from the Company’s cash resources and will not require any cash outlay by the Company prior to its maturity.