Aureus Greenway Holdings Inc(AGH) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited financial statements for the three months ended March 31, 2025, highlighting a significant increase in cash and total assets due to an IPO, alongside a decrease in total revenue and net income compared to the prior year - On February 13, 2025, the company completed its IPO of 3,000,000 common shares at $4.00 per share, raising gross proceeds of $12 million and net proceeds of approximately $10.65 million[27] - The company operates two golf clubs in Florida, Kissimmee Bay Country Club and Remington Golf Club, through its wholly-owned subsidiaries[21][23][24] Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a substantial improvement in the company's financial position, with total assets increasing from $5.2 million to $12.8 million and total liabilities decreasing significantly from $4.1 million to $1.5 million Condensed Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. December 31, 2024) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $8,322,178 | $457,142 | | Total current assets | $8,722,161 | $1,125,272 | | Total Assets | $12,784,340 | $5,211,893 | | Liabilities & Equity | | | | Due to related parties | $184,368 | $2,532,160 | | Total current liabilities | $933,179 | $3,403,513 | | Total Liabilities | $1,536,798 | $4,142,429 | | Total Stockholder's Equity | $11,247,542 | $1,069,464 | Condensed Consolidated Statements of Income and Comprehensive Income For the three months ended March 31, 2025, total revenues decreased to $1.33 million from $1.55 million in the same period of 2024, with net income also declining to $266,212 from $329,384 year-over-year Income Statement Summary (For the three months ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $1,328,371 | $1,553,635 | | Income from operations | $353,037 | $480,110 | | Net Income | $266,212 | $329,384 | | Basic and diluted EPS | $0.02 | $0.03 | Condensed Consolidated Statements of Cash Flows Cash flow from operating activities was negative $81,193 for Q1 2025, a significant shift from positive $470,125 in Q1 2024, while financing activities provided a massive cash inflow of $7.95 million from IPO proceeds, leading to a net increase in cash of $7.87 million Cash Flow Summary (For the three months ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(81,193) | $470,125 | | Net Cash Used in Investing Activities | $(8,146) | $(99,885) | | Net Cash Provided by (Used in) Financing Activities | $7,954,375 | $(134,206) | | Net change in cash and cash equivalents | $7,865,036 | $236,034 | - Financing activities in Q1 2025 included $10.65 million in proceeds from the IPO, offset by repayments of related party loans ($2.39M) and bank borrowings ($0.19M)[19] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 14% year-over-year revenue decline in Q1 2025 to unfavorable weather and lower tourist numbers, while liquidity significantly improved post-IPO, with future plans including facility renovations, expanded marketing, and acquisitions - The company's future plans include renovating its golf clubs, expanding marketing efforts to capture a greater share of the Orlando market, and expanding its portfolio through regional acquisitions[117][121] - Management believes that more than average rainy days in the first two months of 2025 and continued inflation impacting maintenance costs were key factors affecting results[118] Results of Operations Total revenue for Q1 2025 decreased by 14% to $1.33 million compared to Q1 2024, driven by declines across all revenue streams, while total operating expenses decreased by 9%, resulting in a 19% fall in net income Revenue by Stream (Q1 2025 vs Q1 2024) | Revenue Stream | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Golf operations | $1,028,940 | $1,220,881 | (16)% | | Sales of food and beverage | $225,803 | $245,261 | (8)% | | Sales of merchandise | $44,504 | $51,092 | (13)% | | Ancillary revenue | $29,124 | $36,401 | (20)% | | Total revenue | $1,328,371 | $1,553,635 | (14)% | - The decrease in one-time green fees was due to a 4% decrease in total rounds played (from ~23,000 to ~22,000) and an 8% decrease in the average price per round (from $49 to $45)[144] Operating Expenses (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Golf operating costs | $323,259 | $391,231 | (17)% | | Salaries and benefits | $273,987 | $235,848 | 16% | | Other general and administrative | $238,124 | $301,515 | (21)% | | Total operating costs | $975,334 | $1,073,525 | (9)% | Liquidity and Capital Resources The company's liquidity transformed from a working capital deficiency of $2.3 million at year-end 2024 to a surplus of $7.8 million as of March 31, 2025, directly resulting from the IPO proceeds used to fully repay all bank and related-party debt - Working capital improved from a deficiency of ($2,278,241) at Dec 31, 2024 to a surplus of $7,788,982 at March 31, 2025, a change of over $10 million[162] - Upon listing, the company fully settled all bank and other borrowings, which totaled $192,378 at year-end 2024[169] - Loans from related parties, totaling over $2.5 million at year-end 2024 for shareholder loans and listing expenses, were fully settled during Q1 2025 after the IPO[171] Quantitative and Qualitative Disclosure About Market Risk As a smaller reporting company, the company is not required to provide detailed disclosures under this item, but identifies vendor concentration as a key risk while stating minimal exposure to interest rate or credit risk - The company is a smaller reporting company and is not required to provide the information for this item[195] - A significant vendor concentration risk exists, with one key supplier accounting for 80% of accounts payable as of March 31, 2025, and 26% of total operating costs for the quarter[189][190] - The company is not exposed to interest rate risk as its financial liabilities (which were fully repaid in Q1 2025) carried fixed interest rates[191] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of the end of the quarter, disclosure controls and procedures were effective to provide reasonable assurance of timely and accurate reporting[197] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[199] PART II - OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any pending legal proceedings expected to have a material adverse effect on its business or financial condition - As of the report date, the company is not a party to any pending legal proceedings that it believes will have a material adverse effect on its business[202] 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 company[203] Unregistered Sales of Equity Securities and Use of Proceeds The company states that there have been no sales of unregistered equity securities that have not been previously disclosed in its SEC filings - No sales of unregistered equity securities occurred that were not previously disclosed in SEC filings[204] Other Information The company reports that no directors or officers required to file Section 16(a) reports maintained, adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - During the quarter, no Section 16 reporting persons (directors and certain officers) maintained, adopted, or terminated a Rule 10b5-1 trading arrangement[207]