Powerus Corp 10-Q for FY2026 Q2
Powerus Corp (PUSA)
About this 10-Q
Powerus Corp filed this 10-Q on August 13, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $708.46K
- up 17.6% from $602.23K a year earlier
- Net loss
- $39.26K
- compared with a net loss of $289.26K a year earlier
- Diluted EPS
- -$0.00
- compared with -$0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For
the quarterly period ended:
OR
| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from ______ to _______.
Commission
file number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) |
(Address of principal executive offices, including zip code)
Registrant’s
telephone number, including area code
Securities registered under Section 12(b) of the Exchange Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No
As of August 13, 2026 there were of the registrant’s shares of common stock issued and outstanding.
TABLE OF CONTENTS
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Forward-Looking Statements
This quarterly report (the “Quarterly Report”) of Aureus Greenway Holdings Inc. (“we,” “us,” “our,” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and completion of business operations in the future; projected costs; expectations regarding demand and use of our golf country clubs; estimated costs related to maintain our facilities; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; and trends relating to our industry.
We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with competitors, new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:
| ● | general economic and business conditions, including changes in interest rates; |
| ● | competition from other golf country clubs, costs associated with maintaining our golf country clubs and other economic conditions; |
| ● | the effect of an outbreak of disease or similar public health threat, such as a pandemic, on the Company’s business; |
| ● | the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise; |
| ● | breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers; |
| ● | the ability of our infrastructure systems or information security systems to operate effectively; |
| ● | actions by government authorities, including changes in government regulation; |
| ● | uncertainties associated with legal proceedings; |
| ● | changes in the size of the golf country club industry; |
| ● | future decisions by management in response to changing conditions; |
| ● | the Company’s ability to execute prospective business plans; |
| ● | misjudgments in the course of preparing forward-looking statements; |
| ● | the Company’s ability to raise sufficient funds to carry out its proposed business plan; |
| ● | inability to keep up with advances in the golf country club industry; |
| ● | inability to advertise or market services and products at our golf country clubs or develop new services or add new products that address additional market opportunities to generate revenue and positive cash flows; |
| ● | dependency on certain key personnel and any inability to retain and attract qualified personnel; |
| ● | inability to succeed in establishing, maintaining and strengthening our brand; |
| ● | disruption of supply or shortage of raw materials relating to the upkeep and maintenance of our golf country clubs; |
| ● | the unavailability, reduction or elimination of government and economic incentives; |
| ● | failure to manage future growth effectively; and |
| ● | the other risks and uncertainties detailed from time to time in our filings with the United States Securities and Exchange Commission (“SEC”). |
Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.
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AUREUS GREENWAY HOLDINGS INC. AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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PART I
| ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
AUREUS GREENWAY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2026 AND DECEMBER 31, 2025
(Expressed in U.S. dollars, except for the number of shares)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Investment in convertible note | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Deferred tax assets | ||||||||
| Prepaid expenses | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable, other payables and accrued liabilities | $ | $ | ||||||
| Contract liabilities - deferred revenue | ||||||||
| Due to related parties | ||||||||
| Operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Operating lease liabilities - non-current | ||||||||
| Deferred tax liabilities | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock: shares authorized; $ par value, shares of series A preferred stock designated; shares issued and outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Common stock: shares authorized; $ par value, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholder’s Equity | ||||||||
| Total Liabilities and Stockholder’s Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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AUREUS GREENWAY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Expressed in U.S. dollars, except for the number of shares)
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Golf operations | $ | $ | $ | $ | ||||||||||||
| Sales of food and beverage | ||||||||||||||||
| Sales of merchandise | ||||||||||||||||
| Ancillary revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Operating costs: | ||||||||||||||||
| Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Other general and administration expenses | ||||||||||||||||
| Total operating costs | ||||||||||||||||
| (Loss) income from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Interest income from investment in convertible note | ||||||||||||||||
| Other income | ||||||||||||||||
| Total other income, net | ||||||||||||||||
| (Loss) income before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax (benefits) expenses | ( | ) | ( | ) | ||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common stock (Note 13) | ||||||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common stocks outstanding | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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AUREUS GREENWAY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
| Preferred Stock | Common Stock | Additional paid-in | Subscription | Accumulated | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | receivables | deficit | Total | |||||||||||||||||||||||||
| Balance, December 31, 2024 (Audited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Issue of common stocks | - | |||||||||||||||||||||||||||||||
| Proceeds from stockholders for settlement of subscription receivables | - | - | ||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Balance, March 31, 2025 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Balance, December 31, 2025 (Audited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Issue of common stocks and pre-funded warrants (net of commission to placing agent) in private placement | - | |||||||||||||||||||||||||||||||
| Recognition of stock-based compensation | - | |||||||||||||||||||||||||||||||
| Proceeds from exercise of pre-funded warrants and placement agent warrants | ||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2026 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Proceeds from exercise of pre-funded warrants, common A warrants and placement agent warrants | - | |||||||||||||||||||||||||||||||
| Recognition of stock-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net Income (loss) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 (Unaudited) | $ | ( | ) | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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AUREUS GREENWAY HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
| 2026 | 2025 | |||||||
| For the six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Unpaid director’s remuneration | ||||||||
| Stock-based compensation | ||||||||
| Interest income from convertible note | ( | ) | ||||||
| Gain on disposal of club memberships | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Inventories | ||||||||
| Deferred tax assets | ||||||||
| Accounts payable, other payables and accrued liabilities | ( | ) | ( | ) | ||||
| Contract liabilities - deferred revenue | ( | ) | ||||||
| Deferred tax liabilities | ( | ) | ( | ) | ||||
| Net Cash Provided by (Used in) Operating Activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Receipt of short-term investment | ||||||||
| Investment in convertible note | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Advances for property | ( | ) | ||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issue of common stocks and pre-funded warrants | ||||||||
| Proceeds from exercise of pre-funded warrants, common A warrants and placing agent warrants | ||||||||
| Proceeds from related party loan | ||||||||
| Repayments to related party loan | ( | ) | ( | ) | ||||
| Repayments of bank and other borrowings | ( | ) | ||||||
| Deferred offering costs | ( | ) | ||||||
| Net Cash Provided by (Used in) Financing Activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Supplemental non-cash financing activity: | ||||||||
| Prepaid offering costs net off with additional paid-in capital | $ | $ | ||||||
| Stock-based compensation by issuance of restricted shares | ||||||||
| Initial recognition of lease obligations related to right-of-use assets | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Aureus Greenway Holdings Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2026 and 2025
Note 1 - Organization and Business
Business
Aureus Greenway Holdings Inc. (the “Company” or “Aureus”) was incorporated on December 22, 2023 in the state of Nevada. We conduct business activities principally through our wholly-owned subsidiaries, Chrome Fields I, Inc. and Chrome Fields II, Inc. engaging in operation of golf course and selling of merchandise and food and beverages.
As
of June 30, 2026, the Company owns and operates two golf clubs in Florida that consisting of over
Pine Ridge Group Limited (“Pine Ridge”) was acquired by Mr. Cheung Chi Ping from independent third parties on December 31, 2013.
Aureus Merger Sub Inc. was incorporated on February 24, 2026 in the State of Delaware. On March 8, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Autonomous Power Corporation (“Powerus”) and Aureus Merger Sub Inc.. Pursuant to the Merger Agreement, Aureus Merger Sub Inc. will merge with and into Powerus, with Powerus surviving as a wholly owned subsidiary of the Company. Upon completion of the Merger, the Company will change its name to “Powerus Corporation”.
As of June 30, 2026, the Merger had not been consummated. The Merger remains subject to customary closing conditions, including the effectiveness of a registration statement on Form S-4 filed with the SEC (see Note 16 – Subsequent Events), approval for listing of the Company’s common stock on Nasdaq, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the absence of any order or legal requirement that enjoins or otherwise prevents the consummation of the Merger.
Chrome Field I, Inc. (“Chrome I”) was incorporated on December 24, 2013 in the State of Delaware. Chrome I is the sole member of FSC Clearwater, LLC (“Clearwater I”) which was incorporated in the State of Florida on January 21, 2014. Clearwater I owns and operates Kissimmee Bay Country Club, a privately-owned golf course that is open to the general public.
Chrome Field II, Inc. (“Chrome II”) was incorporated on April 13, 2014 in the State of Delaware. Chrome II is the sole member of FSC Clearwater II, LLC (“Clearwater II”) which was incorporated in the State of Florida on March 20, 2014. Clearwater II owns and operates Remington Golf Club, a privately-owned golf course that is open to the general public.
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As at the date of this report, details of the subsidiaries of the company are as follows:
Schedule of Subsidiaries of Company
| Name | Place of formation | Ownership | Principal activity | |||
Pine Ridge Group Limited (“Pine Ridge”) |
(directly) |
|||||
| Aureus Merger Sub Inc. | (directly) |
|||||
Chrome Fields I, Inc. (“Chrome I”) |
(indirectly) |
|||||
Chrome Fields II, Inc. (“Chrome II”) |
(indirectly) |
|||||
FSC Clearwater, LLC (“Clearwater I”) |
(indirectly) |
|||||
FSC Clearwater II, LLC (“Clearwater II”) |
(indirectly) |
Initial Public Offering
On
February 13, 2025, the Company announced the closing of its initial public offering (“IPO”) of common stocks, US$
par value per stock at an offering price of $ per share for a total of US$
The common stock of the Company began trading on the Nasdaq Capital Market afterwards under the ticker symbol “AGH” from February 13, 2025. Subsequently, the Company changed its Nasdaq ticker symbol from “AGH” to “PUSA”, effective May 15, 2026.
Warrants
On
July 23, 2025, the Company has entered into definitive securities purchase agreements with accredited and institutional investors for
the issuance and sale of units consisting of common stock (each a share of “Common Stock”) (or pre-funded warrants (“Pre-funded
Warrants”) to purchase in lieu thereof) together with common A warrants and common B warrants (each of the common A and common
B warrants a “Common Warrant”) to purchase the same number of shares of common stock (or Pre-funded Warrants) of the Company
at a price of $ per unit, on a brokered private placement basis, for aggregate gross proceeds of approximately $
On
July 25, 2025 the Company issued
In
connection with the Private Placement, the Company also issued
| 10 |
Moreover,
in connection with the Private Placement, the Company entered into a placement agent agreement with the placing agents, who agreed to
use reasonable best efforts to facilitate the Private Placement. The compensation to the placing agents includes (i) a cash consideration
of $
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The consolidated financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All significant inter-company transactions and balances between members of the Group are eliminated upon consolidation.
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, consisting only of normal recurring adjustments, considered necessary for a fair presentation 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.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
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This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions made by management 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 could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
Recently Adopted Accounting Standards
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable. The Company adopted this standard from January 1, 2025, which did not have a material impact on its unaudited consolidated financial statements and related disclosures.
Cash and Cash Equivalents
Cash
and cash equivalents include cash at bank and demand deposits which have original maturities less than three months and are unrestricted
as to withdrawal or use. As of June 30, 2026 and December 31, 2025, the Company had cash of $
Periodically,
the Company may maintain cash and cash equivalent balances at financial institutions in excess of applicable insured or protected limits.
The amount in excess of the Federal Deposit Insurance Corporation insurance limits or Securities Investor Protection Corporation insurance
limits as of June 30, 2026, was approximately $
Accounts Receivable, net
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 losses. The credit cards payment is to be settled either
within few days after the year end date due to the timing difference for the payment transfer from credit card center to the bank accounts
of the Company or within one month after the services were utilized by the customers who have authorized the Company to make the payment
through their credit cards. The Company reviews accounts receivable periodically for collectability and establishes an allowance for
expected credit losses and records provision for allowance for expected credit losses expense when deemed necessary. The Company records
an allowance for expected credit losses that is based on historical trends, customer knowledge, any known disputes, future expectation,
future economic situation consideration and considers the aging of the accounts receivable balances combined with management’s
estimate of future potential recoverability. Accounts receivable are written off against the allowance after all attempts to collect
a receivable have failed. As of June 30, 2026 and December 31, 2025, the Company recognized $
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Investment in convertible note
The Company accounts for its investment in convertible note at amortized cost because the Company did not elect the fair value option under ASC 825. The carrying amount includes principal and accrued interest, less any allowance for expected credit losses under ASC 326. Interest income is recognized over the contractual term of the note using the effective interest method. The Company evaluates the note for expected credit losses at each reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, including the issuer’s credit profile, repayment capacity, contractual terms, and other relevant information.
Prepaid expenses
Prepaid
expenses represent the prepayment for (i) the consultancy service of $
Regarding
the consultancy service expense, the Company has engaged a third-party consultant to provide business development regarding the acquisition
of a new golf property and golf property management in Asia for a total consideration of $
Regarding
the annual listing fee starting from February 12, 2026 with gross payment of $
As
of June 30, 2026 and December 31, 2025, the Company had
Inventories, net
The Company’s inventories consist of merchandise goods such as golf balls, gloves, men’s wear and women’s wears and the Company values inventories using the lower of cost, determined using FIFO, and net realizable value, which is generally based on the selling price expectations of the merchandise goods. The Company regularly reviews inventories to determine if the carrying value of the inventory exceeds net realizable value and, when determined necessary, record a reserve to reduce the carrying value to net realizable value. Changes in customer merchandise preference, current and anticipated demand, consumer spending, weather patterns, economic conditions, business trends or merchandising strategies could cause the Company’s inventory to be exposed to obsolescence or slow-moving merchandise. All goods are aged less than one year and the Company will offer discounts to customers to boost the selling but higher than that of purchase price. As of June 30, 2026 and December 31, 2025, no obsolescent goods were noted.
Property and Equipment, net
Property and equipment, net are stated at cost less accumulated depreciation and any impairment losses. Property and equipment, consisting of land, buildings and recreational facilities, properties improvements, equipment, furniture and fixture. The Company capitalizes costs that materially add value and appreciably extend the useful life of an asset. With respect to golf course improvements (included in land improvements), only costs associated with original construction, complete replacements, or the addition of new trees, sand traps, fairways or greens are capitalized while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Land is not depreciated.
| 13 |
Depreciation is calculated using the straight-line method based on the following estimated useful lives:
Schedule of Property and Equipment Estimated Useful Lives
| Depreciable land improvements | ||||
| Building and recreational facilities | ||||
| Properties improvements | ||||
| Equipment, furniture and fixture |
The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Impairment for Long-Lived Assets
Long-lived
assets, representing property and equipment with finite lives, are reviewed for impairment whenever events or changes in circumstances
(such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying
value of an asset may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future
cash flows expected to result from the use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent
that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less
than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset
and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through sale or abandonment,
are reported at the lower of carrying value or fair value less costs to sell. If an impairment is identified, The Company would reduce
the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate,
to comparable market values. As of June 30, 2026 and December 31, 2025,
Warrants
The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” and ASC 815,
“Derivatives and Hedging”. The assessment considers whether the warrants are freestanding financial instruments pursuant
to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity
classification under ASC 815, including whether the warrants are indexed to the Company’s common stock, among other conditions
for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance
and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in
the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of
the warrants is estimated using an appropriate valuation model. Such warrant classification is also subject to re-evaluation at each
reporting period. Offering costs associated with warrants classified as liabilities are expensed as incurred and are presented as offering
cost related to warrant liability in the statement of operations. Offering costs associated with the sale of warrants classified as equity
are charged against proceeds. As of June 30, 2026 and December 31, 2025, all warrants issued are classified within stockholders’
equity. The placing agent warrant is classified as equity and its fair value was $
Management evaluated the terms of all warrants issued during the year, including common warrants, pre-funded warrants, and placement agent warrants, and concluded that such instruments are indexed to the Company’s own stock and do not contain provisions that would require net cash settlement or otherwise preclude equity classification under ASC 815-40. Accordingly, all warrants issued during the year were classified as equity instruments.
The
placement agent warrants were classified as equity and their grant-date fair value of $
| 14 |
Fair Value of Financial Instruments
The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:
| ● | Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. | |
| ● | Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. | |
| ● | Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation. |
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.
The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, operating lease liabilities, and investment in convertible note.
For disclosure purposes under ASC 825-10-50, the Company estimates that the fair value of the investment in convertible note approximates its carrying amount of $20,547,945 as of June 30, 2026. The note bears a fixed 10% interest rate and matures on March 23, 2027. Since the note was issued during the first quarter of 2026 and no significant changes in the issuer’s credit profile, financial condition, or relevant market conditions have occurred from issuance through June 30, 2026, management believes that the carrying value (principal plus accrued interest) remains a reasonable approximation of fair value. Additionally, the note is not convertible at the holder’s option absent an event of default, and no such event has occurred. Because there is no quoted market price for the note or observable market inputs for an identical or similar instrument, the fair value estimate is classified within Level 3 of the fair value hierarchy.
The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values due to the short-term nature of these instruments.
Leases
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Group as of June 30, 2026 and December 31, 2025 are accounted for as operating leases.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses the Company’s incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
| 15 |
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.
Accounts Payables, Other Payables and Accrued Liabilities
Accounts payable, other payables and accrued liabilities represented the payable to the vendors for the course upkeep costs, credit cards charge payables, sales tax payables, property tax payable, accrued salaries and other accrual and payable for the operation of the ordinary course of business.
Related Parties
The Company adopted ASC Topic 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.
The details of related party transactions during the six months ended June 30 ,2026 and 2025 and balances as of June 30, 2026 and December 31, 2025 are set out in Note 8.
Revenue Recognition
All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:
| ● | executed contracts with the Company’s customers that it believes are legally enforceable; | |
| ● | identification of performance obligations in the respective contract; | |
| ● | determination of the transaction price for each performance obligation in the respective contract; | |
| ● | allocation the transaction price to each performance obligation; and | |
| ● | recognition of revenue only when the Company satisfies each performance obligation. |
The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services are transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.
In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are incurred as the Company satisfies the related performance obligations.
| 16 |
Revenue from golf operations
There are two types of service charges maintained by the Company, the players can either (1) subscribe to the entertainment services for a period of time of one year at a discount (i.e. annual subscription green fees); or (2) purchase the services at the counter by one-time payment (i.e. one-time green fees). The golf courses are open to public and hence our customers include both local and overseas citizens. The charges comprise of both the cart fee and fees for playing in the golf course, which is fixed without variable consideration, and the customers either pay via cash or credit card. The entire service fee from customers is non-refundable and required to be paid in advance.
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 $
One-time green fees require the Company to provide to a patron access to a designated 18-hole golf course and cart to play a single round of golf subject to non-hazardous weather conditions that is expected to be completed before sunset of the day of booking of that tee time. Management believes access to the golf course and the card constitute a single performance obligation as either service is not available to be purchased separately. Payments for tee times are non-refundable and are received via cash or credit card immediately prior to the initiation of the patron playing the round of 18-hole golf; therefore, and one-time green fees are not refundable. Typically, in the event that weather is not expected to permit the patron to play and complete the single round of golf, the Company will not undertake the transaction and take payment from the patron. The one-time green fees are fixed and there is no variable consideration.
Sales of merchandise, food and beverage
Golf course patrons regularly buy golf balls, clothing, paraphernalia, and gloves, or will enjoy food and beverage offered at the clubhouses. Patrons make orders at the counter. The price is fixed without variable consideration. The Company recognizes revenue when the merchandise or food and beverage are delivered, net of discounts, if any and control of the product has been passed to the customer. If the clothing or wearables have product defects, they are subject to exchange, but all sales are final and not subject to return. Product delivery is evidenced by a payment receipt record. Payments are settled via cash or credit card. The respective revenue is recognized at a point in time. There are no warranties, sales returns and refunds after the orders are delivered to the customers at the counter.
Ancillary revenue
Ancillary revenue represented the lease of its clubhouse for several hours for events held by associations or individuals such as golf tournaments and lease of golf club to individuals for one day playing golf in the Company’s golf course. The revenue was recognized upon services were rendered (i.e. on daily basis when the venue or golf club was used that day). Deposit was received in advance for booking of clubhouse and recognized as contract liabilities – deferred income upon receipt and recognized as revenue in the statements of income when service was rendered or no show after booking. Deposit received is non-refundable.
| 17 |
Operating Costs
Golf operating costs consist of costs associated with golf course upkeep expenses and are expended as incurred.
Other General and Administrative Expense
Other General and administrative expense consists of audit fees for initial public offering, costs associated with corporate and administrative functions that support development and operations.
Income Tax
The Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
As
of June 30, 2026 and December 31, 2025, the Company had
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, 2026 and 2025, respectively.
The Company computes earnings per share, or EPS, in accordance with ASC Topic 260, Earnings per Share (“ASC 260”). ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common stock outstanding for the period. Diluted EPS presents the dilutive effect on a per common stock basis of the potential common stocks (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stocks that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
Segment Information
ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CEO is the CODM. Management, including the CODM, reviews operation results by revenue, operating expenses, income (loss) from operations and net income (loss). Income (loss) from operations is the measure of profit or loss used by the CODM in assessing performance and making resource-allocation decisions. Based on management’s assessment, the Company has determined that it has only one operating segment as defined by ASC 280, because the Company provides golf operations, sales of merchandise, food and beverage and provides ancillary services to customers in most instances, and has only one team to provide products and services to customers. All assets of the Company are located in Florida and all revenue is generated from Florida.
| 18 |
The
following table presents summary information of the Company’s
Schedule of Segment Information
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenue | ||||||||||||||||
| Reconciliation to net (loss) income before taxes | ||||||||||||||||
| Operating costs: | ||||||||||||||||
| Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below) | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Other general and administration expenses* | ||||||||||||||||
| Total operating costs | ||||||||||||||||
| Measure of segment profit or loss : | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other reconciliation items | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Interest income from investment in convertible note | ||||||||||||||||
| Other income | ||||||||||||||||
| Total other income, net | ||||||||||||||||
| (Loss) income before income tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax (benefits) expenses | ( | ) | ( | ) | ||||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Breakdown of other income: | ||||||||||||||||
| Dividend income from money market accounts | ||||||||||||||||
| Bank interest income | ||||||||||||||||
| Credit card/customer service charges | ||||||||||||||||
| Other miscellaneous income | ||||||||||||||||
| Other Income | ||||||||||||||||
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Other segment disclosures | ||||||||
| Total Assets | ||||||||
| * |
| 19 |
Commitments and Contingencies
In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Recently Issued Accounting Pronouncements
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to compare entities subject more easily to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently evaluating the impact the adoption of ASU 2023-06 will have on its unaudited consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740), Improvements to Income Tax Disclosures, which provides guidance on the requirements such as the requirement that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. For public business entities (PBEs), the new requirements will be effective for annual periods beginning after December 15, 2024. For entities other than public business entities (non-PBEs), the requirements will be effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The ASU should be applied prospectively. Retrospective application is permitted. We are currently evaluating the impact the adoption of ASU 2023-09 will have on its unaudited consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income (Topic 220-40): Expense Disaggregation Disclosures (“ASU 2024-03”). This update requires, among other things, more detailed disclosure about types of expenses in commonly presented expense captions such as cost of sales and selling, general, and administrative expenses, and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its unaudited consolidated financial statements and related disclosures.
| 20 |
Note 3 – Investment in Convertible Note
On
March 23, 2026, the Company received a convertible promissory note from Autonomous Power Corporation with an original principal amount
of $
The convertible note was issued in connection with the Company’s pending merger with Powerus pursuant to the Merger Agreement. The primary business purpose of this financing was to provide Powerus with interim working capital to sustain its operations, support business development, and maintain business continuity pending the closing of the merger. While the execution and timing of the convertible note are commercially linked to the merger process, the convertible note is a standalone, legally enforceable debt instrument governed by its own terms and conditions. The purchase of the convertible note does not modify or otherwise affect the exchange ratio, purchase price, or any other material terms of the Merger Agreement.
The repayment of the convertible note and the Company's right to convert it are not contingent upon the consummation or failure of the merger. If the merger is completed, the convertible note will become an intercompany receivable/payable within the consolidated group and will be eliminated in consolidation upon the closing of the merger. If the merger is not completed, Powerus remains legally obligated to repay the outstanding principal plus accrued interest at maturity or upon earlier prepayment, in accordance with the contractual terms of the convertible note.
The
convertible note is not convertible at the Company’s option unless an event of default occurs. Upon an event of default, the Company
may convert all or any portion of the payment amount into shares of the issuer’s common stock at a fixed conversion price of $
The Company did not elect the fair value option under ASC 825. Accordingly, the investment in convertible note is measured at amortized cost, which includes outstanding principal plus accrued interest, less any allowance for expected credit losses under ASC 326. The Company evaluates the collectability of the investment in convertible note at each reporting period based on available information, including contractual terms, current conditions, and reasonable and supportable forecasts. As of June 30, 2026, no event of default had occurred and management determined that no allowance for expected credit losses was required.
The following table summarizes the movement of the investment in convertible note:
Schedule of Investment in Convertible Note
June 30, 2026 | June 30, 2025 | |||||||
| For the six months ended | ||||||||
June 30, 2026 | June 30, 2025 | |||||||
(unaudited) | (unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Purchase of convertible note | ||||||||
| Interest income accrued | ||||||||
| Less: allowance for expected credit losses | ||||||||
| Ending balance | $ | $ | ||||||
Interest
income from the convertible note was $
Note 4 – Inventories, net
As of June 30, 2026 and December 31, 2025, the inventories of finished goods consisted of the following:
Schedule of Inventories
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Purchased goods | $ | $ | ||||||
| Less: Impairment of obsolete goods | ||||||||
| Inventories, net | $ | $ | ||||||
| 21 |
Note 5 – Property and Equipment, net
As of June 30, 2026 and December 31, 2025, the property and equipment consisted of the following:
Schedule of Property and Equipment
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Land | $ | $ | ||||||
| Buildings and recreational facilities | ||||||||
| Properties improvements | ||||||||
| Furniture and equipment | ||||||||
| Property and equipment, gross | ||||||||
| Less - accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expenses for the six months ended June 30, 2026 and 2025, were $
Note 6 – Accounts Payables, Other Payables and Accrued Liabilities
As of June 30, 2026 and December 31, 2025, the accounts payable, other payables and accrued liabilities consisted of the following:
Schedule of Accounts Payable and Accrued Liabilities
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accounts payable | $ | $ | ||||||
| Other payables | ||||||||
| Credit cards payables | ||||||||
| Sales tax payable | ||||||||
| Property tax payable | ||||||||
| Other accrued expenses | ||||||||
| Accrued salaries | ||||||||
| Accounts payable, other payables and accrued liabilities | $ | $ | ||||||
Note 7 – Leases
During
the six months ended June 30, 2026 and 2025, the Company had eight and six operating lease agreements for a period of
The components of leases related expenses charged to statements of income were as follows:
Schedule of Lease Expense
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Operating lease cost | $ | $ | ||||||||||||||
Supplemental cash flow information related to leases was as follows:
Schedule of Supplemental Cash Flow Information Related to Leases
| 2026 | 2025 | |||||||
| For the six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Weighted average discount rate | % | % | ||||||
| Weighted average remaining lease term (years) | ||||||||
| 22 |
Supplemental balance sheet information related to leases was as follows:
Schedule of Supplemental Balance Sheet Information Related to Leases
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Operating lease right-of-use asset | $ | $ | ||||||
| Operating lease liabilities: | ||||||||
| Current portion | ||||||||
| Non-current portion | ||||||||
| Operating lease liability | $ | $ | ||||||
Future minimum lease payments under operating leases as of June 30, 2026 were as follows:
Schedule of Future Minimum Lease Payments Under Operating Leases
| Period ending December 31, | ||||
| 2026 (excluding six months ended June 30, 2026) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total future minimum lease payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Operating lease liabilities | $ | |||
Note 8 – Related Party Transactions
Relationships with related parties
Schedule of Relationships with Related Parties
| Name | Relationship | |
| Mr. Cheung Ching Ping* | ||
| Mr. Cheung Chi Ping** |
| * | ||
| ** |
On
March 23, 2026, the board of directors approved the disposal of all three golf club memberships. The Company entered into two separate
agreements to dispose (i) one golf club membership with a carrying amount of $
| 23 |
Amounts due to related parties
Amounts due to related parties consist of the following:
Schedule of Amount Due to Related Parties
| June 30, | December 31, | |||||||||
| Name | Nature | 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||||
| Mr. Cheung Ching Ping | Director’s remuneration(1) | |||||||||
| Mr. Cheung Ching Ping | Payment of operating costs on behalf of the Company | |||||||||
| Mr. Cheung Chi Ping | Director’s remuneration(2) | |||||||||
| Mr. Cheung Chi Ping | Repayment of borrowings on behalf of the Company | |||||||||
| $ | $ | |||||||||
Notes:
| (1) | |
| (2) |
Note 9 – Revenue
Revenues disaggregated by major revenue streams and timing of revenue recognition for the three and six months ended June 30, 2026 and 2025 are disclosed in the table below:
Schedule of Disaggregation of Revenue
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Over time: | ||||||||||||||||
| Golf operations – annual subscription green fees | $ | $ | ||||||||||||||
| Point in time: | ||||||||||||||||
| Golf operations – one-time green fees | ||||||||||||||||
| Sales of food and beverage | ||||||||||||||||
| Sales of merchandise | ||||||||||||||||
| Ancillary revenue | ||||||||||||||||
| Total revenue - Point in time | ||||||||||||||||
| Total revenue | $ | $ | ||||||||||||||
Stock options
On July 29, 2025, the Company adopted the 2025 Equity Incentive Plan (“2025 Plan”) with a contractual term of ten years which provides for the granting of stock options to the Company’s employees, officers, directors and consultants to purchase shares of the Company’s common stock in order to attract and retain qualified personnel, directors and consultants and align their interests with those of the Company’s shareholders. The Board of Directors of the Company approved the 2025 Plan on July 29, 2025 and August 13, 2025, respectively. Pursuant to the 2025 Plan, the Company may grant up to an aggregate of stock options. Each stock option is exercisable for one share of common stock.
| 24 |
A total of stock options were granted to the directors of the Company, of which stock options at an exercise price of $ and stock options at an exercise price of $ and have a contractual term of ten years from the date of grant. A total of stock options were granted to the employees and consultants of the Company at an exercise price of $ and have a contractual term of from the date of grant. All of the stock options shall vest at the date of grant.
During the year ended December 31, 2025, and stock options were exercised and forfeited respectively and the outstanding balance was as of December 31, 2025.
The following table summarizes the Company’s activity with respect to its stock options under the 2025 Plan for the six months ended June 30, 2026:
Schedule of Stock Options Activity
| Shares | Weighted-average exercise price | |||||||
| Outstanding as of January 1, 2026 | ||||||||
| Granted | - | |||||||
| Exercised | - | |||||||
| Forfeited or cancelled | - | |||||||
| Outstanding at June 30, 2026 | ||||||||
| Exercisable as of June 30, 2026 | ||||||||
The fair value of options is estimated on the date of grant using the Binomial Option Pricing Model using the assumptions noted in the table below. The fair value assessment is based on the valuation performed by an independent third-party valuer. The fair value of stock options at the grant date was fully charged to the consolidated statements of operations under salaries and benefits at the date of grant.
Schedule of Fair Value of Each Option Award Estimated Assumption
| Risk-free rate | % | |||
| Expected life | years | |||
| Expected dividend yield | % | |||
| Expected volatility | % | |||
| Expected exercise multiple | to |
Restricted shares
On January 29, 2026, the Company granted Mr. Matthew Saker shares of restricted shares of common stock as direct compensation for his services as interim chief executive officer and granted each of Mr. Christopher Schraft, Mr. Vuk Jeremic and Ms. Xinyue Jasmine Geffner restricted shares of common stock as direct compensation for their services as independent directors.
In addition, on March 1, 2026, the Company granted a consultant restricted shares of common stock as equity compensation in accordance with a consulting services agreement for investor relations. The agreement provides that shares were issued upon execution of the agreement (the “First Tranche”), and the remaining shares are to be issued on the first anniversary of the agreement, subject to continued service and no earlier termination for cause (the “Second Tranche”).
As
a result, share-based compensation of $ and $ was recognized in the consolidated statements of operations for the six months
ended June 30, 2026 and 2025, respectively. Of the $ share-based compensation recognized for the six months ended June 30, 2026,
approximately $
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As of June 30, 2026, there was approximately $ of unrecognized compensation cost related to the Second Tranche of the consultant equity award ( unissued restricted shares). This cost is expected to be recognized over the remaining service period through February 28, 2027.
Note 11 – Stockholders’ Equity
Preferred stock
The Company has authorized shares of preferred stock with a par value of $. preferred shares have been designated.
Series A Preferred Stock
The
Company has designated preferred shares, par value $, as Series A Preferred Stock. Initially,
On
January 17, 2024, shares of Series A Preferred Stock was issued to Ace Champion Investments Limited (“Ace Champion”),
shares of Series A Preferred Stock was issued to Chrome Fields Asset Management LLC (“Chrome Fields Asset”), wholly-owned
by Mr. Cheung Chi Ping and shares of Series A Preferred Stock was issued to Trendy View Assets Management (“Trendy View”),
at an aggregate cash consideration of $
On
July 23, 2025, the Company also entered into a stock purchase agreement (the “Private SPA”) among the Company, Ace Champion,
Trendy View, and Chrome Fields Asset (collectively, the “Sellers”), and certain buyers (the “Buyers”). Pursuant
to the Private SPA, Ace Champion, Trendy View and Chrome Fields Asset agreed to sell , and shares of the
Company’s series A preferred stock, respectively, and the Buyers agreed to purchase shares of the Company’s series
A preferred stock, par value $ per share. Under the Private SPA, the shares of series A preferred stock were sold at $ per share.
The transaction closed on
As a result, as of June 30, 2026 and December 31, 2025, shares of Series A Preferred Stock are issued and outstanding. This has been retrospectively reflected in the unaudited condensed consolidated financial statements as discussed in Note 1.
Common stock
The Company has authorized shares of common stock with a par value of $ per share. Each share of common stock entitles the holder to one vote, in person or proxy, on any matter on which an action of the shareholders of the Company is sought.
The Company issued shares of common stock for the exchange of ordinary shares owned by the shareholder of our acquired subsidiary, Pine Ridge.
On
January 17, 2024, the Company allotted shares of common stock at par value $ of the Company to Ace Champion, a company
formed under the laws of the British Virgin Islands, which is wholly-owned by Mr. Cheung Ching Ping, brother of Mr. Cheung Chi Ping;
and the Company allotted shares of common stock at par value $ to Trendy View, a company formed under the laws of the
British Virgin Islands, which is wholly-owned by Mr. Cheung Yick Chung and Ms. Chan Lee, parents of Mr. Cheung Chi Ping. Total consideration
for the subscription was $
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On
June 11, 2024, the Board of Directors approved to effect a
On
February 13, 2025, the Company announced the closing of its initial public offering (“IPO”) of shares of common
stock, US$ par value per stock share at an offering price of US$ per share for a total of US$
On September 16, 2025, the Company issued shares of common stock at par value $ to American Ventures LLC .
On October 1, October 3 and December 18, 2025, the Company issued an aggregate of shares of common stock at par value $ to American Ventures LLC upon the exercise of an equivalent number of pre-funded warrants issued by the Company in the July 2025 Private Placement.
On October 17, November 7 and November 13, 2025, the Company issued a total of shares of common stock to certain employees and consultants of the Company through the exercise of stock options to convert to equivalent number of common stocks of the Company under the 2025 Plan.
On January 29, 2026, the Company granted Mr. Matthew Saker shares of restricted shares of common stock, par value per share, of the Company as direct compensation for his services as interim chief executive officer.
On January 29, 2026, the Company granted each of Mr. Christopher Schraft, Mr. Vuk Jeremic and Ms. Xinyue Jasmine Geffner restricted shares of common stock, par value $ per share, of the Company as direct compensation for their services as independent directors.
On February 4, March 12, March 17, April 6, May 29, June 2 and June 4, 2026, the Company issued an aggregate of shares of common stock at par value $ to American Ventures LLC upon the exercise of an equivalent number of pre-funded warrants issued by the Company in the July 2025 Private Placement.
On March 1, 2026, the Company granted a consultant restricted shares of common stock ( upon execution, on the first anniversary, subject to no earlier termination for cause), par value $ per share, of the Company as equity compensation in accordance with a consulting services agreement for investor relations.
On
March 10, 2026, the Company closed a private placement of
shares (including
common stock and
pre-funded warrants) at $
per share, generating gross proceeds of $
On
March 12, March 13, March 16 and March 25, May 15, May 19, May 20, May 26, June 2 and June 4, 2026, placement agent warrants of
On April 9, April 24, April 28, May 5, June 2 and June 29, 2026, common A warrants of , , , , and were exercised and converted into a total of shares of common stock of the Company at par value of $, respectively.
As a result, as of June 30, 2026 and December 31, 2025, and shares of common stock are issued and outstanding respectively.
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Warrants
On
July 23, 2025, the Company entered into definitive securities purchase agreements with accredited and institutional investors for the
issuance and sale of units consisting of common stock (each a share of “Common Stock”) (or pre-funded warrants (“Pre-funded
Warrants”) to purchase in lieu thereof) together with common A warrants and common B warrants (each of the common A and common
B warrants a “Common Warrant”) to purchase the same number of shares of common stock (or Pre-funded Warrants) of the Company
at a price of $ per unit, on a brokered private placement basis, for aggregate gross proceeds of approximately $
On
July 25, 2025, the Company issued
In
connection with the Private Placement, the Company also issued
Moreover,
in connection with the Private Placement, the Company entered into a placement agent agreement with the placing agents, who agreed to
use reasonable best efforts to facilitate the Private Placement. The compensation to the placing agents includes (i) a cash consideration
of $
As
of June 30, 2026, a total of
On
March 10, 2026, the Company closed a private placement of
shares (including
common stock and
pre-funded warrants) at $
per share, generating gross proceeds of $
Note 12 – Income Tax
The Company provides for income tax under ASC 740, “Income Taxes” under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
The Company is incorporated in the State of Nevada and is not subject to tax on income or capital gains under current Nevada law. In addition, upon payments of dividends by these entities to their shareholders, no Nevada withholding tax will be imposed.
The
components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new federal statutory rate of
| 28 |
Taxation in the statements of operations represents:
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Tax provision for the period: | ||||||||||||||||
| Current | $ | $ | $ | $ | ||||||||||||
| Deferred | ||||||||||||||||
| ● Federal statutory tax | ||||||||||||||||
| - Deferred tax assets | ||||||||||||||||
| - utilization of NOLs brought forward | ||||||||||||||||
| - overprovision of DTA for first quarter | ( | ) | ( | ) | ||||||||||||
| - Deferred tax liabilities | ||||||||||||||||
| - (reversal) recognition for the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Deferred tax assets Liabilities | ( | ) | ( | ) | ||||||||||||
| ● State of Florida tax | ||||||||||||||||
| - Deferred tax assets | ||||||||||||||||
| - utilization of NOLs brought forward | ||||||||||||||||
| - overprovision of DTA for first quarter | ( | ) | ( | ) | ||||||||||||
| - Deferred tax liabilities | ||||||||||||||||
| - (reversal) recognition for the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Deferred tax assets Liabilities | ( | ) | ( | ) | ||||||||||||
| Total income tax (benefits) expenses | ( | ) | ( | ) | $ | $ | ||||||||||
A reconciliation of the effective income tax rates reflected in the accompanying unaudited condensed consolidated statements of operations to the federal statutory rate of 21% for the three and six months ended June 30, 2026 and 2025 are as follows:
Schedule of Reconciliation of Statutory Federal Income Tax Rate and Effective Income Tax Rate
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Federal statutory tax rate | % | % | % | % | ||||||||||||
| Effect of state of Florida tax | % | % | ( | )% | % | |||||||||||
| State tax effect of jurisdictional mix* | % | ( | )% | ( | )% | % | ||||||||||
| Effect of British Virgin Islands tax | % | % | % | % | ||||||||||||
| Permanent difference | ( | )% | % | ( | )% | % | ||||||||||
| Effective tax rate | % | % | ( | )% | % | |||||||||||
| * |
| 29 |
Significant components of the deferred tax assets and deferred tax liabilities are presented below:
Schedule of Deferred Tax Assets and Liabilities
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred tax liabilities: | ||||||||
| Accelerated depreciation | ||||||||
| Federal statutory tax: | ||||||||
| Beginning of the period/year | $ | $ | ||||||
| (Reversal) recognized during the period/year | ( | ) | ( | ) | ||||
| End of the period/year | ||||||||
| State of Florida tax: | ||||||||
| Beginning of the period/year | ||||||||
| (Reversal) recognized during the period/year | ( | ) | ( | ) | ||||
| End of the period/year | ||||||||
| Deferred tax liabilities | $ | $ | ||||||
| Deferred tax assets: | ||||||||
| Net operating losses | ||||||||
| Federal statutory tax: | ||||||||
| Beginning of the period/year | $ | $ | ||||||
| Recognized during the period/year | ||||||||
| Utilized during the period/year | ( | ) | ||||||
| End of the period/year | ||||||||
| State of Florida tax: | ||||||||
| Beginning of the period/year | $ | |||||||
| Recognized during the period/year | ||||||||
| Utilized during the period/year | ( | ) | ||||||
| End of the period/year | ||||||||
| Less: valuation allowance | ||||||||
| Deferred tax assets, net | $ | $ | ||||||
The Group evaluated the recoverable amounts of deferred tax assets to the extent that future taxable profits will be available against which the net operating loss and temporary difference can be utilized.
As
of June 30, 2026, the Company had $
The NOLs carry forwards are subject to certain limitations due to the change in control of the Company pursuant to Internal Revenue Code Section 382.
Schedule of Net loss Per Common Stock
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Basic and diluted weighted average number of common stocks outstanding | ||||||||||||||||
| Loss per common stock | ||||||||||||||||
| Basic | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Basic loss per common stock is computed by dividing net loss by the weighted average number of common stocks outstanding during the period. Diluted loss per common stock is the same as basic loss per common stock for all periods presented because the inclusion of all potential common stocks ( stock options and warrants) would have been anti-dilutive, as it would have reduced the net loss per share.
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Note 14 – Risk and Uncertainties
Credit Risk
The Company’s principal financial assets are cash and cash equivalents, investment in convertible note and accounts and other receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. The Company has not experienced losses on their accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.
Management believes that the Company is not exposed to any significant credit risk with respect to its cash.
The credit risk of the investment in convertible note is the potential loss from the issuer’s default with the entire $20 million concentrated in a single private company and therefore the investment in convertible note creates concentration risk. Management evaluated ASC 326 and concluded that no allowance was recorded because: (i) the note is held at amortized cost and no allowance for expected credit losses is required under ASC 326 based on the issuer’s creditworthiness and financial condition as of the origination date, with no evidence of credit deterioration in the short period since issuance; (ii) no event of default has occurred or is considered probable; and (iii) the fixed 10% interest rate provides a reasonable return commensurate with the risk assumed. Management monitors the issuer’s credit quality on an ongoing basis and believes any potential credit losses would be immaterial to the consolidated financial statements.
The Company mitigates its credit risk on receivables by actively managing and monitoring its receivables. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. Since all accounts receivable as of June 30, 2026 and December 31, 2025 are aged within one year and collected all receivables subsequent to period end, minimum credit risk was noted for accounts receivable.
Vendor concentration risk
As
of June 30, 2026 and December 31, 2025, the Company owed
For
the six months ended June 30, 2026 and 2025, one vendor accounted for
For
the three months ended June 30, 2026 and 2025, one vendor accounted for
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as its financial liabilities carry interest at fixed rates.
The Company is not materially exposed to interest rate risk on the investment in convertible note because the note is measured at amortized cost, not fair value. Changes in market interest rates do not affect the carrying amount or interest income recognized, provided no impairment occurs. Additionally, the fixed 10% rate is locked in until maturity, and the Company intends to hold the note to maturity.
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Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of twelve months, including through operations and financial support from the Company’s stockholders and financial institutions. the Company is continuing to focus on improving operational efficiency and cost reductions and enhancing efficiency, as well as servicing of financial obligations: this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Management believes that the Company’s existing cash and cash equivalents, together with cash flows from operations, are sufficient to meet its liquidity needs for the next twelve months, and the Company does not have any going concern uncertainties .
Note 15 – Commitments and Contingencies
Lease Commitments
Litigation
From time to time, the Company is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, the Company does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Company’s view of these matters may change in the future. the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews the need for any such liabilities on a regular basis.
Note 16 – Subsequent Events
The Company evaluated all events and transactions that occurred after June 30, 2026 up through August 13, 2026, which is the date that these unaudited condensed consolidated financial statements were issued. Other than the matter described below, there were no material subsequent events requiring disclosure in these unaudited condensed consolidated financial statements.
On
July 17, 2026,
On July 30, 2026, the Company filed a Registration Statement on Form S-4 with SEC in connection with its proposed business combination with Autonomous Power Corporation. The registration statement has not yet become effective, and the merger remains subject to customary closing conditions, including the effectiveness of the registration statement and other regulatory approvals.
| 32 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Introductory Note
Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company,” “we,” “us” or “our” are references to the combined business Aureus Greenway Holdings Inc. and its subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.
General Overview of Operations
We own and operate two public golf country clubs in Florida that we acquired in 2014. Our golf country clubs include two golf-courses with over 13,000 yards of combined fairways, clubhouses boasting food and beverage options, aquatic golf ranges, and pro shops to assist any level of golfers. Our two golf country clubs are situated on over 289 acres of multi-service recreational property.
Each of our golf country clubs is organized into four revenue streams: (i) golf operations, (ii) sales of food and beverage; (iii) sales of merchandise; and (iv) ancillary income.
Management’s Plans
Over the next twelve months, we plan to continue to promote, market, manage and operate our golf country clubs with the intent to (i) attract and retain customers across a number of demographic groups to further develop customer loyalty and capture a greater share of customers in the greater Orlando Florida region and (ii) increase revenue from managing and operating our golf country clubs.
We believe attracting and retaining customers while increasing customer engagement and loyalty by providing what we believe to be a high quality golfing experience will drive our revenue. Drivers of our revenue growth will require continued efforts in maintaining and improving upon the quality of our customers’ experiences at our golf country clubs. To that end, we have successfully completed the following major renovations during Q3 of 2025:
| ● | Installing 19 brand new TiffEagle greens at Remington Golf Club; | |
| ● | Extensively renovated the interior and exterior of the Clubhouse at Kissimmee Bay Country Club |
Key Factors Affecting our Results of Operations
| a. | Seasonality and weather |
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.
| b. | Cost of maintenance due to inflation |
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.
| 33 |
Basis of Presentation
The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. They include the financial statements of the Company and its subsidiaries. All transactions and balances among these entities have been eliminated upon consolidation.
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.
Critical Accounting Policies, Judgments and Estimates
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.
Accounts Receivable, net
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 losses. The credit cards payment is to be settled either within few days after the year end date due to the timing difference for the payment transfer from credit card center to the bank accounts of the Company or within one month after the services were utilized by the customers who have authorized the Company to make the payment through their credit cards. The Company reviews accounts receivable periodically for collectability and establishes an allowance for expected credit losses and records provision for allowance for expected credit losses expense when deemed necessary. The Company records an allowance for expected credit losses that is based on historical trends, customer knowledge, any known disputes, future expectation, future economic situation consideration and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Accounts receivable are written off against the allowance after all attempts to collect a receivable have failed. As of June 30, 2026 and December 31, 2025, the Company recognized $5,277 and $5,277 as an allowance for expected credit losses on accounts receivable, respectively.
Investment in convertible note
The Company accounts for its investment in convertible note at amortized cost because the Company did not elect the fair value option under ASC 825. The carrying amount includes principal and accrued interest, less any allowance for expected credit losses under ASC 326. Interest income is recognized over the contractual term of the note using the effective interest method. The Company evaluates the note for expected credit losses at each reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, including the issuer’s credit profile, repayment capacity, contractual terms, and other relevant information.
| 34 |
Impairment for Long-Lived Assets
Long-lived assets, representing property and equipment with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell. If an impairment is identified, The Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2026 and December 31, 2025, no impairment of long-lived assets was recognized.
Leases
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Group as of June 30, 2026 and December 31, 2025 are accounted for as operating leases.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.
Revenue Recognition
All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:
| ● | executed contracts with the Company’s customers that it believes are legally enforceable; | |
| ● | identification of performance obligations in the respective contract; | |
| ● | determination of the transaction price for each performance obligation in the respective contract; | |
| ● | allocation the transaction price to each performance obligation; and | |
| ● | recognition of revenue only when the Company satisfies each performance obligation. |
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The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services are transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.
In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are incurred as the Company satisfies the related performance obligations.
Revenue from golf operations
There are two types of service charges maintained by the Company, the players can either (1) subscribe to the entertainment services for a period of time of one year at a discount (i.e. annual subscription green fees); or (2) purchase the services at the counter by one-time payment (i.e. one-time green fees). The golf courses are open to public and hence our customers include both local and overseas citizens. The charges comprise of both the cart fee and fees for playing in the golf course, which is fixed without variable consideration, and the customers either pay via cash or credit card. The entire service fee from customers is non-refundable and required to be paid in advance.
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.
One-time green fees require the Company to provide to a patron access to a designated 18-hole golf course and cart to play a single round of golf subject to non-hazardous weather conditions that is expected to be completed before sunset of the day of booking of that tee time. Management believes access to the golf course and the card constitute a single performance obligation as either service is not available to be purchased separately. Payments for tee times are non-refundable and are received via cash or credit card immediately prior to the initiation of the patron playing the round of 18-hole golf; therefore, and one-time green fees are not refundable. Typically, in the event that weather is not expected to permit the patron to play and complete the single round of golf, the Company will not undertake the transaction and take payment from the patron. The one-time green fees are fixed and there is no variable consideration.
Sales of merchandise, food and beverage
Golf course patrons regularly buy golf balls, clothing, paraphernalia, and gloves, or will enjoy food and beverage offered at the clubhouses. Patrons make orders at the counter. The price is fixed without variable consideration. The Company recognizes revenue when the merchandise or food and beverage are delivered, net of discounts, if any and control of the product has been passed to the customer. If the clothing or wearables have product defects, they are subject to exchange, but all sales are final and not subject to return. Product delivery is evidenced by a payment receipt record. Payments are settled via cash or credit card. The respective revenue is recognized at a point in time. There are no warranties, sales returns and refunds after the orders are delivered to the customers at the counter.
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Ancillary revenue
Ancillary revenue represented the lease of its clubhouse for several hours for events held by associations or individuals such as golf tournaments and lease of golf club to individuals for one day playing golf in the Company’s golf course. The revenue was recognized upon services were rendered (i.e. on daily basis when the venue or golf club was used that day). Deposit was received in advance for booking of clubhouse and recognized as contract liabilities – deferred income upon receipt and recognized as revenue in the statements of income when service was rendered or no show after booking. Deposit received is non-refundable.
Results of Operations
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Golf operations | $ | 493,400 | $ | 415,868 | $ | 1,622,973 | $ | 1,444,808 | ||||||||
| Sales of food and beverage | 162,405 | 147,587 | 407,210 | 373,390 | ||||||||||||
| Sales of merchandise | 28,368 | 20,904 | 86,656 | 65,408 | ||||||||||||
| Ancillary revenue | 24,285 | 17,873 | 60,997 | 46,997 | ||||||||||||
| Total revenue | 708,458 | 602,232 | 2,177,836 | 1,930,603 | ||||||||||||
| Operating costs: | ||||||||||||||||
| Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below) | 381,023 | 326,232 | 776,831 | 649,491 | ||||||||||||
| Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below) | 47,434 | 59,162 | 114,906 | 125,044 | ||||||||||||
| Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below) | 14,634 | 12,671 | 44,507 | 35,969 | ||||||||||||
| Salaries and benefits | 266,603 | 248,953 | 1,582,778 | 522,940 | ||||||||||||
| Depreciation | 63,836 | 52,013 | 127,586 | 102,797 | ||||||||||||
| Other general and administration expenses | 698,397 | 329,704 | 1,753,683 | 567,828 | ||||||||||||
| Total operating costs | 1,471,927 | 1,028,735 | 4,400,291 | 2,004,069 | ||||||||||||
| (Loss) income from operations | (763,469 | ) | (426,503 | ) | (2,222,455 | ) | (73,466 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | - | - | - | (4,491 | ) | |||||||||||
| Interest income from investment in convertible note | 498,630 | 547,945 | - | |||||||||||||
| Other income | 149,613 | 83,724 | 390,420 | 145,719 | ||||||||||||
| Total other income, net | 648,243 | 83,724 | 938,365 | 141,228 | ||||||||||||
| (Loss) income before income tax | (115,226 | ) | (342,779 | ) | (1,284,090 | ) | 67,762 | |||||||||
| Income tax (benefits) expenses | (75,964 | ) | (53,518 | ) | 15,071 | 90,811 | ||||||||||
| Net Loss | $ | (39,262 | ) | $ | (289,261 | ) | $ | (1,299,161 | ) | $ | (23,049 | ) | ||||
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Revenue
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:
For the three months ended | For the six months ended | |||||||||||||||||||||||||||||||
| June 30, | Changes | June 30, | Changes | |||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||
| Golf operations | ||||||||||||||||||||||||||||||||
| – annual membership dues | 72,573 | 111,052 | (38,479 | ) | (35 | )% | $ | 143,340 | $ | 145,218 | $ | (1,878 | ) | (1 | )% | |||||||||||||||||
| – one-time green fees | 420,827 | 304,816 | 116,011 | 38 | % | 1,479,633 | 1,299,590 | 180,043 | 14 | % | ||||||||||||||||||||||
| Sales of food and beverage | 162,405 | 147,587 | 14,818 | 10 | % | 407,210 | 373,390 | 33,820 | 9 | % | ||||||||||||||||||||||
| Sales of merchandise | 28,368 | 20,904 | 7,464 | 36 | % | 86,656 | 65,408 | 21,248 | 32 | % | ||||||||||||||||||||||
| Ancillary revenue | 24,285 | 17,873 | 6,412 | 36 | % | 60,997 | 46,997 | 14,000 | 30 | % | ||||||||||||||||||||||
| 708,458 | 602,232 | 106,226 | 18 | % | $ | 2,177,836 | $ | 1,930,603 | $ | 247,233 | 13 | % | ||||||||||||||||||||
Comparison for the six months ended June 30, 2026 and 2025
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.
Revenue from golf operations increased by $178,165 or 12% from $1,444,808 for the six months ended June 30, 2025 to $1,622,973 for the six months ended June 30, 2026, which was driven by the increase in one-time green fees from golf operations by $180,043 or 14%.
Revenue from annual membership dues accounted for 7% and 8% of total revenue for the six months ended June 30, 2026 and 2025. It remained stable for the six months ended June 30, 2026 and 2025.
One-time green fees from golf operations accounted for 68% and 67% of total revenue for the six months ended June 30, 2026 and 2025, respectively. Increase in one-time green fees by 14% resulted from the increase in average price per round by 5% from $40 per round for the six months ended June 30, 2025 to $42 per round for the six months ended June 30, 2026 and the total number of rounds increased from approximately 32,000 rounds during the six months ended June 30, 2025 to approximately 35,000 rounds during the six 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.
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.
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Increase in revenue from sales of merchandise by $21,248 or 32% from $65,408 for the six months ended June 30, 2025 to $86,656 for the six months ended June 30, 2026, which was contributed by the increase in sales of golf balls, men’s wear, gloves and headwear by 32% as a result of the increase in sales to customers playing golf during the six months ended June 30, 2026.
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 $14,000 or 30% was mainly due to the increase in demand for rental services for activities and events during the six months ended June 30, 2026.
Comparison for the three months ended June 30, 2026 and 2025
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 $106,226 or 18% was mainly due to the increase in one-time green fees, sales of food and beverage, sales of merchandise and ancillary revenue.
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%.
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.
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.
Increase in revenue from sales of food and beverage by $14,818 or 10% from $147,587 for the three months ended June 30, 2025 to $162,405 for the three months ended June 30, 2026, which was contributed by the increase in quantities sold by 14% from approximately 22,000 for the three months ended June 30, 2025 to approximately 25,000 for the three months ended June 30, 2026, being offset by the decrease in average unit price by 14% from $7 per unit for the three months ended June 30, 2025 to $6 for the three months ended June 30, 2026. The increase in quantity sold was in line with increase in golf operations.
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.
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.
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Operating expenses
Operating expenses consisted of the following:
For the three months ended | For the six months ended | |||||||||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | Changes | % | 2026 | 2025 | Changes | % | |||||||||||||||||||||||||
| Golf operating costs(1) | 381,023 | 326,232 | 54,791 | 17 | % | $ | 776,831 | $ | 649,491 | $ | 127,340 | 20 | % | |||||||||||||||||||
| Cost of food and beverage sales(1) | 47,434 | 59,162 | (11,728 | ) | (20 | )% | 114,906 | 125,044 | (10,138 | ) | (8 | )% | ||||||||||||||||||||
| Cost of merchandise sales(1) | 14,634 | 12,671 | 1,963 | 15 | % | 44,507 | 35,969 | 8,538 | 24 | % | ||||||||||||||||||||||
| Salaries and benefits | 266,603 | 248,953 | 17,650 | 7 | % | 1,582,778 | 522,940 | 1,059,838 | 203 | % | ||||||||||||||||||||||
| Depreciation | 63,836 | 52,013 | 11,823 | 23 | % | 127,586 | 102,797 | 24,789 | 24 | % | ||||||||||||||||||||||
| Other general and administrative expenses | 698,397 | 329,704 | 368,693 | 112 | % | 1,753,683 | 567,828 | 1,185,855 | 209 | % | ||||||||||||||||||||||
| 1,471,927 | 1,028,735 | 443,192 | 43 | % | $ | 4,400,291 | $ | 2,004,069 | $ | 2,396,222 | 120 | % | ||||||||||||||||||||
| (1) | Exclusive of depreciation and salaries and benefits shown separately above. |
Comparison for the six months ended June 30, 2026 and 2025
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 $2,004,069 for the six months ended June 30, 2025 to $4,400,291 for the six months ended June 30, 2026, which was primarily due to the increase in golf operating costs, salaries and benefits and other general and administrative expenses and during the current period with details discussed below.
Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating expenses by $127,340 or 20% from $649,491 for the six months ended June 30, 2025 to $776,831 for the six 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.
The decrease in cost of food and beverage by $10,138 or 8% from $125,044 for the six months ended June 30, 2025 to $114,906 for the six months ended June 30, 2026 was due to improved procurement pricing and operational efficiency.
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 $8,538 or 24% was in line with the increase in revenue from sales of merchandise.
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.
Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The increase in depreciation was primarily attributable to the depreciation of significant capital additions made during 2025, including the installation of new greens and major clubhouse renovations.
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.
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Comparison for the three months ended June 30, 2026 and 2025
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.
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.
The decrease in cost of food and beverage by $11,728 or 20% from $59,162 for the three months ended June 30, 2025 to $47,434 for the three months ended June 30, 2026 was due to improved procurement pricing and operational efficiency.
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 was in line with the increase in revenue from sales of merchandise.
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 $17,650 or 7% was primarily due to 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 $15,000.
Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The increase in depreciation was primarily attributable to the depreciation of significant capital additions made during 2025, including the installation of new greens and major clubhouse renovations.
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 $368,693 or 112% from $329,704 for the three months ended June 30, 2025 to $698,397 for the three months ended June 30, 2026 was mainly attributable to the increase in legal and professional fees by approximately $152,000, travelling expenses by approximately $14,000 and director’s and officer’s liability insurance by approximately $18,000.
Comparison for the three and six months ended June 30, 2026 and 2025
Other income (expense)
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.
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Income tax expenses
The Company provides for income tax under ASC 740, “Income Taxes” under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
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.
The Group evaluated the recoverable amounts of deferred tax assets to the extent that future taxable profits will be available against which the NOLs and temporary difference can be utilized.
As of June 30, 2026, the Company had $1,087,981 of net operating losses (“NOLs”) which can be carried forward indefinitely.
The NOLs carry forwards are subject to certain limitations due to the change in control of the Company pursuant to Internal Revenue Code Section 382.
The Company recorded income tax expenses of $15,071 and $90,811 for the six months ended June 30, 2026 and 2025, respectively.
Company recorded income tax benefits of $75,964 and $53,518 for the three months ended June 30, 2026 and 2025, respectively.
Please refer to Note 12 – Income Tax to the Unaudited Condensed Consolidated Financial Statements for more details.
Net loss
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.
Our net loss for the three months ended June 30, 2026 and 2025, was $39,262 and $289,261, respectively. The decrease in net loss by $249,999 or 86% was driven primarily by $498,630 of interest income from investment in convertible note and higher other income, which more than offset by the increase in our operating costs during the three months ended June 30, 2026.
Liquidity and Capital Resources
The following table sets forth a breakdown of our current assets and current liabilities as of dates indicated:
Working Capital
The following table summarizes our cash and working capital as of June 30, 2026 and December 31, 2025:
| June 30, | December 31, | |||||||||||||||
| 2026 | 2025 | Changes | % | |||||||||||||
| Current assets | ||||||||||||||||
| Cash and cash equivalents | $ | 22,200,258 | $ | 28,668,169 | $ | (6,467,911 | ) | (23 | )% | |||||||
| Accounts receivable – net | 68,029 | 44,751 | 23,278 | 52 | % | |||||||||||
| Investment in convertible note | 20,547,945 | - | 20,547,945 | 100 | % | |||||||||||
| Inventories, net | 31,361 | 34,415 | (3,054 | ) | (9 | )% | ||||||||||
| Prepaid expenses | 203,770 | 314,602 | (110,832 | ) | (35 | )% | ||||||||||
| Other current assets | 1,364 | 20,124 | (18,760 | ) | (93 | )% | ||||||||||
| Total current assets | $ | 43,052,727 | $ | 29,082,061 | $ | 13,970,666 | 48 | % | ||||||||
| Current liabilities | ||||||||||||||||
| Accounts payable, other payables and accrued liabilities | $ | 412,262 | $ | 688,927 | $ | (276,665 | ) | (40 | )% | |||||||
| Contract liabilities – deferred revenue | 190,959 | 145,980 | 44,979 | 31 | % | |||||||||||
| Operating lease liabilities – current | 218,343 | 242,256 | (23,913 | ) | (10 | )% | ||||||||||
| Due to related parties | - | 216,598 | (216,598 | ) | (100 | )% | ||||||||||
| Total current liabilities | $ | 821,564 | $ | 1,293,761 | $ | (472,197 | ) | (36 | )% | |||||||
| Net Working Capital | $ | 42,231,163 | $ | 27,788,300 | $ | 14,442,863 | 52 | % | ||||||||
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Accounts receivable
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.
Investment in convertible note
On March 23, 2026, the Company received a convertible promissory note from Autonomous Power Corporation (the “Issuer”) with an original principal amount of $20,000,000. The investment in convertible note matures on March 23, 2027 and bears simple interest at a rate of 10% per annum. Interest is payable at maturity or upon earlier conversion, prepayment, or acceleration.
The Issuer may prepay the investment in convertible note at any time prior to maturity at an amount equal to the outstanding principal plus accrued interest and any other amounts due (the “Payment Amount”).
The investment in convertible note is not convertible at the holder’s option except upon the occurrence of an event of default. Upon an event of default, the holder may convert all or any portion of the Payment Amount into shares of the Issuer’s common stock at a fixed conversion price of $1,979 per share. If no event of default occurs, the investment in convertible note will be settled in cash at maturity.
The Company has not elected the fair value option under ASC 825 for this investment in convertible note. Accordingly, the investment in convertible note is measured at amortized cost, which equals the outstanding principal plus accrued but unpaid interest, less any allowance for expected credit losses as required under ASC 326. The Company evaluates the collectability of the investment in convertible note at each reporting period, considering historical information and current conditions. As of June 30, 2026, management has determined that no allowance for expected credit losses is necessary as no event of default has occurred, and the Issuer is expected to perform under the contractual terms. Interest income is recognized on an accrual basis using the effective interest method.
The conversion feature is contingent upon an event of default and is not exercisable by the holder absent such an event. As a result, separate derivative accounting under ASC 815 is not required unless and until the contingency is triggered.
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.
Inventories
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.
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Prepaid expenses
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.
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.
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.
Accounts payable, other payables and accrued liabilities
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.
Contract liabilities – deferred revenue
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.
Operating lease liabilities
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.
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Amounts due to related parties
Amounts due to related parties consist of the following:
| Name | Relationship | Nature | June 30, 2026 | December 31, 2025 | ||||||||
| Mr. Cheung Ching Ping* | Shareholder and former Director of the Company | Director’s remuneration(1) | - | 100,000 | ||||||||
| Mr. Cheung Ching Ping* | Shareholder and former Director of the Company | Payment of operating costs on behalf of the Company | - | 12,789 | ||||||||
| Mr. Cheung Chi Ping** | Shareholder and former Director of the Company | Director’s remunerations(2) | - | 100,000 | ||||||||
| Mr. Cheung Chi Ping** | Shareholder and former Director of the Company | Repayment of borrowings on behalf of the Company | - | 3,809 | ||||||||
| $ | - | $ | 216,598 | |||||||||
*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.
** On January 28, 2026, Mr. Cheung Chi Ping resigned as a Director of the Board, effective as of January 29, 2026.
Notes:
| (1) | For the six months ended June 30, 2026 and 2025, the Company charged $75,000 and $30,000, respectively, as director’s remuneration/ salaries to Mr. Cheung Ching Ping and recognized under salaries and benefits on the statements of operations. The balance is interest-free, unsecured and repayable on demand. As of December 31, 2025, the director’s remuneration payable to Mr. Cheung Ching Ping of $100,000 was fully settled in January 2026. |
| (2) | For the sake of compensating Mr. Cheung Chi Ping’s involvement in the daily operations and management of golf operations of the Company, director’s remuneration/ salaries was granted by the Company every year based on the performance of the Company. For the six months ended June 30, 2026 and 2025, the Company charged $75,000 and $30,000, respectively, as director’s remuneration/ salaries to Mr. Cheung Chi Ping and recognized under salaries and benefits on the statements of operations. The balance is interest-free, unsecured and repayable on demand. As of December 31, 2025, the director’s remuneration payable to Mr. Cheung Chi Ping of $100,000 was fully settled in January 2026. |
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities:
| For the six months ended | ||||||||||||
| June 30, | ||||||||||||
| 2026 | 2025 | Changes | ||||||||||
| Cash provided (used in) by Operating Activities | $ | 91,804 | $ | (337,364 | ) | $ | 429,168 | |||||
| Cash used in Investing Activities | $ | (20,033,040 | ) | $ | (448,740 | ) | $ | (19,584,300 | ) | |||
| Cash provided by Financing Activities | $ | 13,473,325 | $ | 7,954,375 | $ | 5,518,950 | ||||||
| Net change in cash and cash equivalents | $ | (6,467,911 | ) | $ | 7,168,271 | $ | (13,636,182 | ) | ||||
Cash Flow from Operating Activities
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.
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.
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Cash Flows from Investing Activities
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.
During the six months ended June 30, 2025, cash flows used in investing activities were for the purchase of property and equipment and advances for property of $330,816 and $124,702, respectively. The purchase and payment for acquisition of property and equipment was due to payments for the renovation and upgrading of our golf courses, clubhouse and facilities, greens renovation and roof replacement.
Cash Flows from Financing Activities
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.
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.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Capital Expenditures
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.
Contractual Obligations
Lease Agreements
The Company has eight leases classified as right of use operating leases for golf cars and golf equipment.
Future minimum lease payments under operating leases at June 30, 2026 were as follows:
| Year ending December 31, | Total | |||
| 2026 (excluding six months ended June 30, 2026) | $ | 132,057 | ||
| 2027 | 247,495 | |||
| 2028 | 247,495 | |||
| 2029 | 193,535 | |||
| 2030 | 63,250 | |||
| $ | 883,832 | |||
| Less imputed interest | (80,411 | ) | ||
| Operating lease liabilities | $ | 803,421 | ||
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Future minimum lease payments under operating leases as of December 31, 2025 were as follows:
| Year ending December 31, | Total | |||
| 2026 | $ | 285,740 | ||
| 2027 | 247,495 | |||
| 2028 | 247,495 | |||
| 2029 | 193,535 | |||
| 2030 | 63,250 | |||
| $ | 1,037,515 | |||
| Less imputed interest | (103,737 | ) | ||
| Operating lease liabilities | $ | 933,778 | ||
Cash Flow Sufficiency
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.
The Company successfully raised a total net proceed of $10.65 million, after deducting underwriting discounts and commission and other offering expenses, from its initial public offering on February 13, 2025.
On July 23, 2025, the Company has entered into definitive securities purchase agreements with accredited and institutional investors for the issuance and sale of units consisting of common stock (each a share of “Common Stock”) (or pre-funded warrants (“Pre-funded Warrants”) to purchase in lieu thereof) together with common A warrants and common B warrants (each of the common A and common B warrants a “Common Warrant”) to purchase the same number of shares of common stock (or Pre-funded Warrants) of the Company at a price of $0.87 per unit, on a brokered private placement basis, for aggregate net proceeds of approximately $23.52 million, after deducting fees and offering expenses.
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.
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.
Material Weaknesses
During the six months ended June 30, 2026, management identified material weaknesses in the Company ‘s internal control over financial reporting related to (i) inadequate segregation of duties for certain key functions due to limited staff and resources; and (ii) a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to formalize key controls over financial reporting. As of June 30, 2026, these material weaknesses had not been fully remediated. The Company intends to implement measures designed to improve its internal control over financial reporting, including hiring additional qualified accounting and financial reporting personnel and enhancing the formal documentation of polices and controls.
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Quantitative and Qualitative Disclosure About Market Risk
Credit Risk
The Company’s principal financial assets are cash and cash equivalents, accounts and other receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. The Company has not experienced losses on their accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.
Management believes that the Company is not exposed to any significant credit risk with respect to its cash.
The Company mitigates its credit risk on receivables by actively managing and monitoring its receivables. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. Since all accounts receivable as at June 30, 2026 and December 31, 2025 are aged within one year and collected all receivables subsequent to year end, minimum credit risk was noted for accounts receivable.
Vendor concentration risk
As of June 30, 2026 and December 31, 2025, the Company owed 95% and 87% of accounts payable to a key supplier, respectively.
For the six months ended June 30, 2026 and 2025, one vendor accounted for 14% and 26% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the six months ended June 30, 2026 and 2025, respectively.
For the three months ended June 30, 2026 and 2025, one vendor accounted for 19% and 25% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the three months ended June 30, 2026 and 2025, respectively.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as its financial liabilities carry interest at fixed rates.
The Company is not materially exposed to interest rate risk on the investment in convertible note because the note is measured at amortized cost, not fair value. Changes in market interest rates do not affect the carrying amount or interest income recognized, provided no impairment occurs. Additionally, the fixed 10% rate is locked in until maturity, and the Company intends to hold the note to maturity.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of twelve months, including through operations and financial support from our stockholders and financial institutions. We are continuing to focus on improving operational efficiency and cost reductions and enhancing efficiency, as well as servicing of financial obligations: this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Management believes that the Company’s existing cash and cash equivalents, together with cash flows from operations, are sufficient to meet its liquidity needs for the next twelve months, and the Company does not have any going concern uncertainties.
Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.
| ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act at the end of the period covered by this quarterly report.
Based on this evaluation, the Interim Chief Executive Officer and Chief Financial Officer concluded that, as of end of the period covered by this Quarterly Report, our disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K) were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information (i) is accumulated and communicated to management, including our Interim Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Internal Control over Financial Reporting
As disclosed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, management has identified material weaknesses in our internal control over financial reporting as of June 30, 2026, related to (i) inadequate segregation of duties for certain key functions due to limited staff and resources, and (ii) a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to formalize key controls over financial reporting. As of June 30, 2026, these material weaknesses had not been fully remediated. The Company intends to implement measures designed to improve its internal control over financial reporting, including hiring additional qualified accounting and financial reporting personnel and enhancing the formal documentation of policies and controls.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
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PART II-OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.
As of the date of this Quarterly Report, we are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
| ITEM 1A. | RISK FACTORS |
As a smaller reporting company, we are not required to make disclosures under this item.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
There have been no sales of unregistered equity securities that we have not previously disclosed in filings with the U.S. Securities and Exchange Commission.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | OTHER INFORMATION |
Trading Arrangements of Section 16 Reporting Persons.
During
the quarter ended June 30, 2026, no person who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act
of 1934, as amended, with respect to holdings of, and transactions in, the Company’s common shares (i.e. directors and certain
officers of the Company) maintained,
| ITEM 6. | Exhibits |
EXHIBIT INDEX
| Exhibit No. | Description of Exhibit | |
| 31.1* | Certification of Principal Executive Officer required by Rule 13a-14(a). | |
| 31.2* | Certification of Principal Financial Officer required by Rule 13a-14(a). | |
| 32.1** | Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code. | |
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101) |
| * | Filed herewith. |
| ** | Furnished herewith. |
| 50 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: August 13, 2026 | ||
| AUREUS GREENWAY HOLDINGS INC. | ||
| By: | /s/ Matthew J. Saker | |
| Matthew J. Saker | ||
| Interim Chief Executive Officer, and Director | ||
| (Principal Executive Officer) | ||
| By: | /s/ Sam Wai Sing Lui | |
| Sam Wai Sing Lui | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| 51 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew J. Saker, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Aureus Greenway Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the quarterly report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Dated: August 13, 2026 | ||
| By: | /s/ Matthew J. Saker | |
| Matthew J. Saker | ||
| Interim Chief Executive Officer and Director | ||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sam Wai Sing Lui, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Aureus Greenway Holdings Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the quarterly report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Dated: August 13, 2026 | ||
| By: | /s/ Sam Wai Sing Lui | |
| Sam Wai Sing Lui | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Aureus Greenway Holdings Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026 as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
| Dated: August 13, 2026 | ||
| By: | /s/ Matthew J. Saker | |
| Matthew J. Saker | ||
| Interim Chief Executive Officer and Director | ||
| (Principal Executive Officer) | ||
| By: | /s/ Sam Wai Sing Lui | |
| Sam Wai Sing Lui | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |