Aureus Greenway Holdings Inc(US:AGH)2024-12-13 16:08PART I - FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the period Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and accompanying notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $5,361,591 | $4,749,169 | | Total Current Assets | $1,150,920 | $991,386 | | Total Non-current Assets | $4,210,671 | $3,757,783 | | Total Liabilities | $4,060,284 | $3,502,533 | | Total Current Liabilities | $3,223,577 | $2,664,011 | | Due to related parties | $2,416,320 | $1,651,407 | | Total Stockholder's Equity | $1,301,307 | $1,246,636 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Financial Performance Summary (Unaudited) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $2,639,071 | $2,952,936 | -10.6% | | Income from Operations | $105,602 | $619,533 | -82.9% | | Net Income | $54,671 | $709,328 | -92.3% | | Basic and Diluted EPS | $0.01 | $0.07 | -85.7% | | --- | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Change (%) | | Total Revenue | $436,899 | $439,474 | -0.6% | | Net Loss | ($205,612) | ($229,216) | +10.3% | | Basic and Diluted EPS | ($0.02) | ($0.02) | 0.0% | Condensed Consolidated Statements of Cash Flows Cash Flow Summary for the Nine Months Ended September 30 (Unaudited) | Cash Flow Category | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $145,601 | $898,420 | | Net Cash Used in Investing Activities | ($126,680) | ($183,710) | | Net Cash Used in Financing Activities | ($163,054) | ($939,709) | | Net change in cash and cash equivalents | ($144,133) | ($224,999) | | Cash and cash equivalents, end of period | $502,161 | $468,152 | Notes to Unaudited Condensed Consolidated Financial Statements - The company operates two golf clubs in Florida: Kissimmee Bay Country Club and Remington Golf Club. A group reorganization was completed on January 17, 2024, and the company's registration statement on S-1 for a Nasdaq listing became effective on November 20, 2024262729 - As of September 30, 2024, the company had significant outstanding loans from related parties (shareholders and directors) totaling $2,416,320. These loans are interest-free and are to be fully settled upon the company's public listing9394 - On June 11, 2024, the company effected a 1.25-for-1 reverse stock split, resulting in 10,880,000 common shares issued and outstanding103104 - The company has a significant vendor concentration risk, with one key supplier accounting for 81% of accounts payable and 32% of total operating costs for the nine months ended September 30, 2024115 Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the company's financial condition and operational results, highlighting revenue declines, increased expenses, and liquidity management - The company operates two public golf country clubs in Florida, with revenue streams from golf operations, food and beverage sales, merchandise sales, and ancillary income124125 - Future plans include renovating facilities, marketing to new regional customers, and potentially expanding through acquisitions of other regional country clubs126130 - Key operational factors include seasonality (Q1 is the busiest) and the impact of inflation on maintenance costs, which led to a $200,000 increase in the annual contract with its main maintenance vendor starting in October 2023127 Results of Operations Revenue Breakdown for Nine Months Ended September 30 | Revenue Stream | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Golf operations | $1,974,651 | $2,247,862 | ($273,211) | -12% | | Sales of food and beverage | $499,792 | $530,012 | ($30,220) | -6% | | Sales of merchandise | $91,451 | $107,861 | ($16,410) | -15% | | Total Revenue | $2,639,071 | $2,952,936 | ($313,865) | -11% | - The 16% decrease in one-time green fees for the nine-month period was due to an 18% drop in the number of rounds played (from ~45,000 to ~37,000), which management attributes to more rainy days137 Operating Expenses for Nine Months Ended September 30 | Expense Category | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Golf operating costs | $1,030,225 | $845,496 | $184,729 | 22% | | Other general and admin | $646,711 | $587,030 | $59,681 | 10% | | Total Operating Expenses | $2,533,469 | $2,333,403 | $200,066 | 9% | - Net income for the nine months ended Sep 30, 2024, was $54,671, a 92% decrease from $709,328 in the same period of 2023, driven by lower revenue and higher operating costs166 Liquidity and Capital Resources Working Capital Summary | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $1,150,920 | $991,386 | | Total Current Liabilities | $3,223,577 | $2,664,011 | | Working Capital Deficiency | ($2,072,657) | ($1,672,625) | - Net cash provided by operating activities decreased significantly to $145,601 for the nine months ended Sep 30, 2024, from $898,420 in the prior-year period179180181 - The company repaid $566,091 in bank borrowings during the first nine months of 2024174 - Management believes that cash flows from operations, available banking facilities, and financial support from its controlling shareholder will be sufficient to meet cash needs for at least the next twelve months188189 Quantitative and Qualitative Disclosure About Market Risk The company is classified as a smaller reporting company and is therefore not required to provide the quantitative and qualitative disclosures about market risk typically required under this item - As a smaller reporting company, the Company is not required to provide the information required by this item200 Controls and Procedures Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of September 30, 2024. There were no material changes to the company's internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report201202 - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls204 PART II - OTHER INFORMATION This section details legal proceedings, risk factors, equity sales, defaults, and other miscellaneous information and exhibits Legal Proceedings The company reports that it is not currently a party to any pending legal proceedings that it believes would have a material adverse effect on its business or financial condition - As of the date of the report, the company is not a party to any pending legal proceedings expected to have a material adverse effect207 Risk Factors As a smaller reporting company, Aureus Greenway Holdings Inc. is not required to provide disclosures under this item - The company is not required to make disclosures under this item as it qualifies as a smaller reporting company208 Unregistered Sales of Equity Securities and Use of Proceeds The company states that there have been no sales of unregistered equity securities that were not previously disclosed in its SEC filings - There have been no sales of unregistered equity securities that have not been previously disclosed209 Defaults Upon Senior Securities The company reports no defaults upon its senior securities - None210 Mine Safety Disclosures This item is not applicable to the company's business operations - Not applicable211 Other Information The company discloses that during the quarter ended September 30, 2024, no directors or certain officers maintained, adopted, modified, or terminated any Rule 10b5-1 trading arrangements - During the quarter, no Section 16 reporting persons (directors and certain officers) maintained, adopted, modified, or terminated a Rule 10b5-1 trading arrangement212 Exhibits This section provides an index of the exhibits filed with the Form 10-Q, which includes certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL data files - The report includes certifications from the CEO and CFO as required by Rule 13a-14(a) and Section 1350, along with XBRL data files214 Signatures This section contains the official signatures authorizing the quarterly report Signatures The quarterly report was duly signed and authorized on December 13, 2024, by the company's Chief Executive Officer, ChiPing Cheung, and its Chief Financial Officer, Sam Wai Sing Lui - The report was signed on December 13, 2024, by ChiPing Cheung (CEO) and Sam Wai Sing Lui (CFO)218