Aureus Greenway Holdings Inc(US:AGH)2025-03-28 20:00Part I Business Aureus Greenway Holdings operates two Florida golf clubs, generating revenue from golf, memberships, food, and events, with seasonal peaks - The company owns and operates two public golf country clubs in Florida, Kissimmee Bay and Remington, situated on over 289 acres of recreational property22 - Business operations are divided into four principal segments: (i) golf recreation, retail, and rentals, (ii) membership dues, (iii) food and beverage services, and (iv) ancillary services and amenities23 Key Revenue Stream Performance (FY2024 vs. FY2023) | Revenue Stream | FY2024 Revenue ($) | FY2023 Revenue ($) | Change ($) | % Change | | :--- | :--- | :--- | :--- | :--- | | One-time Green Fees | $2,139,636 | $2,475,133 | ($335,497) | -14% | | Annual Membership Dues | $303,541 | $168,723 | $134,819 | +80% | | Food and Beverage | $648,738 | $682,281 | ($33,543) | -5% | | Merchandise Sales | $115,262 | $138,450 | ($23,188) | -17% | - The company utilizes digital marketing channels, including social media and Google Ads, and partners with the tee-time booking platform GolfNow.com to drive customer traffic and bookings6869 - Operations are highly seasonal, with the peak season running from January through mid-April (Q1), which generates a disproportionate share of annual revenues7273 Risk Factors The company faces risks from its holding company structure, weather, economic downturns, concentrated Florida operations, reliance on third-party maintenance, cybersecurity, and highly concentrated stock ownership - As a holding company, Aureus Greenway Holdings Inc. relies on dividends from its subsidiaries to fund its cash requirements, which could be restricted97 - Operational risks include susceptibility to severe weather, economic downturns affecting discretionary spending, and high dependency on a third-party consultant (DTE) for golf course maintenance99102119 - The company's operations are concentrated solely in Florida, increasing exposure to local competition, economic changes, and demographic shifts115 - Significant voting power is concentrated with the Cheung family, who collectively own approximately 98.3% of the voting rights, allowing them to control company policies and major decisions168191 - The company is an "emerging growth company" and has elected to use the extended transition period for new accounting standards, which may make its financial statements not comparable to other public companies164192 Unresolved Staff Comments As a smaller reporting company, Aureus Greenway Holdings is not required to provide information on this item - The company is not required to provide this information as it qualifies as a smaller reporting company195 Cybersecurity The company's cybersecurity risk management, overseen by the Board and Audit Committee, relies on third-party vendors, with no material incidents reported to date - The Board and its Audit Committee oversee the company's processes for assessing and managing cybersecurity risk206 - As of the report date, the company has not encountered any cybersecurity threats that have materially affected its business, operations, or financial condition197207 - The company uses third-party service providers for key functions, including booking platforms and point-of-sale devices, and manages risk through contractual provisions and assessments201202 Properties The company owns over 289 acres of real estate for its two golf clubs in Kissimmee, Florida, where its executive offices are also located - The company owns the real estate for both of its golf country clubs, totaling over 289 acres209 Company Properties | Property Name | Type of Club | Market | State | Golf Holes | | :--- | :--- | :--- | :--- | :--- | | Kissimmee Bay Country Club | Public Golf Country Club | Kissimmee | FL | 18 | | Remington Golf Club | Public Golf Country Club | Kissimmee | FL | 18 | Legal Proceedings As of the report date, no active legal proceedings are pending or threatened against the company - There are no active legal proceedings pending or threatened against the Company as of the report date212 Mine Safety Disclosures This item is not applicable to the company's business - Not Applicable213 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock began trading on Nasdaq in February 2025, with no dividends anticipated, and IPO proceeds of approximately $10.6 million used for growth and loan repayment - The company's Common Stock began trading on the Nasdaq Capital Market under the ticker "AGH" on February 12, 2025215 - The company has never declared or paid dividends and does not anticipate doing so in the foreseeable future219 - Net proceeds from the IPO were approximately $10.6 million, a portion of which was used to repay loans224 Reserved As a smaller reporting company, Aureus Greenway Holdings is not required to provide information for this item - Not applicable as the company is a smaller reporting company226 Management's Discussion and Analysis of Financial Condition and Results of Operations Total revenue decreased by 7% to $3.3 million in FY2024, leading to an operating loss of $182,032 and a significant decline in operating cash flow to $89,676 Consolidated Results of Operations | | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Total revenue | $3,298,361 | $3,554,712 | | Total operating costs | $3,480,393 | $3,301,554 | | (Loss) income from operations | ($182,032) | $253,158 | | Net (Loss) Income | ($183,700) | $386,128 | - Revenue from one-time green fees, the largest revenue source (65% of total), decreased by 14% in 2024 due to a 15% drop in the number of rounds played, which management attributes to more rainy days246 - Golf operating costs increased by 15% ($178,069) in 2024, primarily due to a $115,715 increase in the contractual price with its largest maintenance vendor, Down to Earth, as a result of inflation260 - The company had a working capital deficiency of $2,278,241 as of December 31, 2024, an increase from a deficiency of $1,672,625 in the prior year280 - Net cash provided by operating activities was $89,676 in 2024, a significant decrease from $848,032 in 2023290291 Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Aureus Greenway Holdings is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide this information as it qualifies as a "smaller reporting company"314 Financial Statements and Supplementary Data This section refers to Item 15, where the company's audited consolidated financial statements are located - The company's Consolidated Financial Statements are located under Item 15 of this report314 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants or auditors on accounting and financial disclosure - The company has not had any disagreements with its accountants or auditors315 Controls and Procedures Disclosure controls were effective, and no material changes to internal controls occurred, though a management assessment on internal control over financial reporting is not included due to new public company status - Management concluded that the company's disclosure controls and procedures are effective316 - This annual report does not include a report of management's assessment regarding internal controls over financial reporting due to a transition period for newly public companies321 - No change in internal control over financial reporting occurred during the year that has materially affected, or is reasonably likely to materially affect, internal controls322 Other Information The company reports no other information, and no directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans in Q4 2024 - During the quarter ended December 31, 2024, no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans323 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - None324 Part III Directors, Executive Officers and Corporate Governance The company's leadership includes CEO C.P. Cheung and CFO Sam Wai Sing Lui, with a board chaired by S. Cheung, supported by independent committees and a Code of Ethics and Clawback Policy - The executive officers are Mr. C. P. Cheung (CEO) and Mr. Sam Wai Sing Lui (CFO), with Mr. S. Cheung as Chairman of the Board, and Mr. C. P. Cheung and Mr. S. Cheung are brothers326351 - The board has established three committees: Audit, Compensation, and Nominating, each with a charter and composed of independent directors347 - The company has adopted a Code of Ethics and a compensation recovery ("Clawback") policy in compliance with Nasdaq rules353354 Executive Compensation In FY2024, CEO C.P. Cheung received $110,000 (salary and bonus), while CFO Sam Wai Sing Lui received $18,000 in salary, as detailed in their employment agreements Summary Compensation Table (2024) | Name and Principal Position | Salary ($) | Bonus ($) | Total ($) | | :--- | :--- | :--- | :--- | | C. P. Cheung, CEO & Director | 60,000 | 50,000 | 110,000 | | Sam Wai Sing Lui, CFO | 18,000 | - | 18,000 | - CEO Mr. C. P. Cheung's employment agreement provides for an annual base salary of $60,000 and a discretionary bonus of at least $50,000364 - CFO Mr. Lui's employment agreement provides for an annual base salary of $18,000365 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The company exhibits highly concentrated ownership, with the Cheung family controlling a significant portion of voting rights, including 27.6% by S. Cheung and 23.9% by C.P. Cheung Beneficial Ownership of Key Insiders | Name of Beneficial Owner | Percentage of Beneficial Ownership | | :--- | :--- | | Ace Champion Investments Limited (controlled by S. Cheung) | 27.6% | | Chrome Fields Asset Management (controlled by C. P. Cheung) | 23.9% | | Mr. S. Cheung (Chairman and Director) | 27.6% | | Mr. C. P. Cheung (CEO and Director) | 23.9% | | All executive officers and directors as a group (6 persons) | 40.9% | Certain Relationships and Related Transactions, and Director Independence The company discloses significant related party transactions, primarily unsecured, non-interest-bearing loans from the Cheung family for club acquisitions and IPO costs, largely repaid in early 2025 - The company received significant loans from directors S. Cheung, C.P. Cheung, and their father, Y.C. Cheung, to finance the 2014 acquisition of the golf clubs (the "2014 Loans"), which were repaid in March 2025376 - A loan facility of up to $1.1 million (the "Expense Loan") was provided by S. Cheung to cover IPO-related expenses, which was repaid in February 2025377 - In January 2024, the company issued common and Series A Preferred Stock to entities controlled by the Cheung family as part of a corporate reorganization378 Principal Accounting Fees and Services Auditor fees totaled $233,500 in 2024 and $269,800 in 2023, primarily consisting of audit fees Auditor Fees | SERVICES | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Audit fees | $230,500 | $268,000 | | Tax fees | $3,000 | $1,800 | | Total fees | $233,500 | $269,800 | Part IV Exhibits and Financial Statement Schedules This section lists the financial statements and comprehensive exhibits filed as part of the 10-K report - This section contains the list of financial statements and exhibits filed with the annual report383385 Form 10-K Summary The company has elected not to provide a summary of the information contained in this Form 10-K - The company elected not to provide a summary of the Form 10-K389