# Powerus Corp: Form 10-Q for the period ended Jun 30, 2025

- Company: [Powerus Corp](/companies/pusa.md) (CIK 2009312)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 16:01 ET
- Period: 2025-06-30
- Accession: 0001493152-25-011966
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/2009312/000149315225011966/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/2009312/000149315225011966/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $602.2k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $1.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$426.5k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$73.5k | us-gaap:OperatingIncomeLoss |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $4.5k | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | −$53.5k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $90.8k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$289.3k | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$23.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.02 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.02 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 13,880,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 13,167,293 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$337.4k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $330.8k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $7.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $7.9m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $12.7m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $1.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $11.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 62,079 characters.

### 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 further steps to maintain and build on quality experiences at our golf country clubs. To achieve the foregoing, we intend to focus on:

- Renovating and modernizing our golf country clubs to promote more enjoyable use of our facilities;
- Retaining new regional customers from the growth of the surrounding greater Orlando Florida region through marketing efforts; and
- Expanding our portfolio through regional country club acquisitions.

### 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. In 2025, we believe that we experienced more than average rainy days during the first two months causing our revenue to be under pressure.

b. Cost of maintenance due to inflation

The DTE Agreement was renewed in 2022 and the renewed contractual price has been fully reflected in Q1 2025, the higher contractual price is a reflection of the inflationary environment that subsequently impacted the labor, fertilizer and chemical markets. The maintenance cost and contract with DTE may be subject to further increases in 2025 if the inflationary environment continues to impact our maintenance needs.

c. Renovation and upgrading of our golf courses and clubhouses

As disclosed in our prospectus dated February 11, 2025, some of the net proceeds from the initial public offering will be used for renovation and upgrading of our golf courses, clubhouse and facilities. We have completed the roof replacement and exterior painting of our clubhouse located at Kissimmee Bay Country Club and there is no disruption to daily golf operations. Regarding Remington Golf Club, the greens are currently under renovation and upgrading. The golf course at Remington Golf Club has been temporarily closed for renovation starting from May 17, 2025 and the expected re-opening date will be in late September 2025. Therefore, the renovation project will cause an adverse effect on our business and results of operations and the impact was partially reflected in our results for the six months ended June 30, 2025.

### 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, 2025, and results of operations and cash flows for the six months ended June 30, 2025 and 2024. The unaudited condensed consolidated balance sheet as of December 31, 2024 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, 2024 and 2023, 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. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the consolidated financial statements 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 may differ from these estimates.

### 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, 2025 and December 31, 2024, the Company had no allowance for expected credit losses due to no experiences on default from customers or failure of transfer from credit card center after payment authorization was made by customers and all outstanding accounts receivable as of June 30, 2025 and December 31, 2024 were subsequently settled before this report date.

### 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, 2025 and December 31, 2024, 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, 2025 and December 31, 2024 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.

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, 2025 and December 31, 2024, the Company recorded contract liabilities - deferred revenue of $154,386 and $162,226, 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.

#### 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.

### 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, 2025 and December 31, 2024, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements, respectively.

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, 2025 and 2024, respectively.

### Results of Operations

| Revenue | For the three months ended June 30, 2025 | 2024 | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Golf operations | $415,868 | $458,728 | $1,444,808 | $1,679,609 |
| Sales of food and beverage | 147,587 | 146,824 | 373,390 | 392,085 |
| Sales of merchandise | 20,904 | 24,732 | 65,408 | 75,824 |
| Ancillary revenue | 17,873 | 18,253 | 46,997 | 54,654 |
| **Total revenue** | 602,232 | 648,537 | 1,930,603 | 2,202,172 |
| **Operating costs:** |  |  |  |  |
| Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below) | 326,232 | 315,464 | 649,491 | 706,695 |
| Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below) | 59,162 | 43,232 | 125,044 | 114,040 |
| Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below) | 12,671 | 9,968 | 35,969 | 34,084 |
| Salaries and benefits | 248,953 | 141,795 | 522,940 | 377,643 |
| Depreciation | 52,013 | 50,031 | 102,797 | 100,038 |
| Other general and administration expenses | 329,704 | 182,822 | 567,828 | 484,337 |
| Total operating costs | 1,028,735 | 743,312 | 2,004,069 | 1,816,837 |
| **(Loss) income from operations** | (426,503) | (94,775) | (73,466) | 385,335 |
| **Other income (expense)** |  |  |  |  |
| Interest expense | - | (6,296) | (4,491) | (16,482) |
| Other income | 83,724 | 9,825 | 145,719 | 29,267 |
| Total other income, net | 83,724 | 3,529 | 141,228 | 12,785 |
| **(Loss) income before income tax** | (342,779) | (91,246) | 67,762 | 398,120 |
| Income tax (benefits) expenses | (53,518) | (22,145) | 90,811 | 137,837 |
| **Net (Loss) Income** | **$(289,261)** | **$(69,101)** | **$(23,049)** | **$260,283** |

31

### Revenue

Revenues disaggregated by major revenue streams for the three months and six months ended June 30, 2025 and 2024 are disclosed in the table below:

| Golf operations | For the three months ended June 30, 2025 | 2024 | Changes $% |  | For the six months ended June 30, 2025 | 2024 | Changes $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| – annual membership dues | 111,052 | 76,157 | 34,895 | 46% | $145,218 | $150,380 | $(5,162) | (3)% |
| – one-time green fees | 304,816 | 382,571 | (77,755) | (20)% | 1,299,590 | 1,529,229 | (229,639) | (15)% |
| Sales of food and beverage | 147,587 | 146,824 | 763 | 1% | 373,390 | 392,085 | (18,695) | (5)% |
| Sales of merchandise | 20,904 | 24,732 | (3,828) | (15)% | 65,408 | 75,824 | (10,416) | (14)% |
| Ancillary revenue | 17,873 | 18,253 | (380) | (2)% | 46,997 | 54,654 | (7,657) | (14)% |
|  | 602,232 | 648,537 | (46,305) | (7)% | $1,930,603 | $2,202,172 | $(271,569) | (12)% |

### Comparison for the six months ended June 30, 2025 and 2024

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $271,569 or 12% was mainly due to the decrease in all revenue streams.

Revenue from golf operations decreased by $234,801 or 14% from $1,679,609 for the six months ended June 30, 2024 to $1,444,808 for the six months ended June 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $229,639 or 15%.

Revenue from annual membership dues accounted for 8% and 7% of total revenue for the six months ended June 30, 2025 and 2024. It remained stable for the six months ended June 30, 2025 and 2024.

One-time green fees from golf operations accounted for 67% and 69% of total revenue for the six months ended June 30, 2025 and 2024, respectively. Decrease in one-time green fees by 15% resulted from the decrease in total number of rounds by 11% from approximately 36,000 rounds during the six months ended June 30, 2024 to approximately 32,000 rounds during the six months ended June 30, 2025 as well as the decrease in average price per round by 5% from $42 per round for the six months ended June 30, 2024 to $40 per round for the six months ended June 30, 2025 due to lower price was offered to the players as a result of less tourists visiting Florida during the current period because the inflation hinders the customers sentiment to play golf. The decrease 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 decreased by 17% in the second quarter.

Decrease in revenue from sales of food and beverage by $18,695 or 5% from $392,085 for the six months ended June 30, 2024 to $373,390 for the six months ended June 30, 2025, which was contributed by the decrease in quantities sold by 6% from approximately 63,000 for the six months ended Jue 30, 2024 to approximately 59,000 for the six months ended June 30, 2025 and the average unit price remained stable at $6 per unit for the six months ended June 30, 2025 and 2024. The decrease in quantity sold was in line with decrease in golf operations.

Decrease in revenue from sales of merchandise by $10,416 or 14% from $75,824 for the six months ended June 30, 2024 to $65,408 for the six months ended June 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear and gloves by 16% as a result of the decrease in sales to customers playing golf during the six months ended June 30, 2025.

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The decrease by $7,657 or 14% was mainly due to the decrease in demand for rental services for activities and events during the six months ended June 30, 2025.

### Comparison for the three months ended June 30, 2025 and 2024

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $46,305 or 7% was mainly due to the decrease in one-time green fees from golf operations and being partially offset by an increase in annual membership dues.

Revenue from golf operations decreased by $42,860 or 9% from $458,728 for the three months ended June 30, 2024 to $415,868 for the three months ended June 30, 2025, which was driven by the decrease in one-time green fees from golf operations by $77,755 or 20% and offset by an increase in annual membership dues from golf operations by $34,895 or 46%.

Revenue from annual membership dues accounted for 18% and 12% of total revenue for the three months ended June 30, 2025 and 2024. It increased by $34,895 or 46% mainly due to the increase in demand from customers who paid annual membership dues for the three months ended June 30, 2025.

One-time green fees from golf operations accounted for 51% and 59% of total revenue for the three months ended June 30, 2025 and 2024, respectively. Decrease in one-time green fees by 20% resulted from the decrease in total number of rounds by 23% from approximately 13,000 rounds during the three months ended June 30, 2024 to approximately 10,000 rounds during the three months ended June 30, 2025 and the average price per round remained stable at $30 per round for the three months ended June 30, 2024 and 2025. The decrease 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 decreased by 17% in the second quarter.

Increase in revenue from sales of food and beverage by $763 or 1% from $146,824 for the three months ended June 30, 2024 to $147,587 for the three months ended June 30, 2025, which was contributed by the increase in average unit price by 17% from $6 per unit for the three months ended June 30, 2024 to $7 for the three months ended June 30, 2025, being offset by the decrease in quantities sold by 4% from approximately 23,000 for the three months ended June 30, 2024 to approximately 22,000 for the three months ended June 30, 2025. The decrease in quantity sold was in line with decrease in golf operations.

Decrease in revenue from sales of merchandise by $3,828 or 15% from $24,732 for the three months ended June 30, 2024 to $20,904 for the three months ended June 30, 2025, which was contributed by the decrease in sales of golf balls, men’s and ladies’ wear and gloves by 17% as a result of the decrease in sales to customers playing golf during the three months ended June 30, 2025.

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. It remained stable for the three months ended June 30, 2025 and 2024.

### Operating expenses

Operating expenses consisted of the following:

|  | For the three months ended June 30, 2025 | 2024 | Changes% |  | For the six months ended June 30, 2025 | 2024 | Changes% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Golf operating costs(1) | 326,232 | 315,464 | 10,768 | 3% | $649,491 | $706,695 | $(57,204) | (8)% |
| Cost of food and beverage sales(1) | 59,162 | 43,232 | 15,930 | 37% | 125,044 | 114,040 | 11,004 | 10% |
| Cost of merchandise sales(1) | 12,671 | 9,968 | 2,703 | 27% | 35,969 | 34,084 | 1,885 | 6% |
| Salaries and benefits | 248,953 | 141,795 | 107,158 | 76% | 522,940 | 377,643 | 145,297 | 38% |
| Depreciation | 52,013 | 50,031 | 1,982 | 4% | 102,797 | 100,038 | 2,759 | 3% |
| Other general and administrative expenses | 329,704 | 182,822 | 146,882 | 80% | 567,828 | 484,337 | 83,491 | 17% |
|  | 1,028,735 | 743,312 | 285,423 | 38% | $2,004,069 | $1,816,837 | $187,232 | 10% |

(1) Exclusive of depreciation and salaries and benefits shown separately above.

### Comparison for the six months ended June 30, 2025 and 2024

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 $1,816,837 for the six months ended June 30, 2024 to $2,004,069 for the six months ended June 30, 2025, which was primarily due to the increase in salaries and benefits and other general and administrative expenses and partially offset by the decreases in golf operating costs 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. Decrease in golf operating costs by $57,204 or 8% from $706,695 for the six months ended June 30, 2024 to $649,491 for the six months ended June 30, 2025 which was attributable to the decrease in golf course maintenance related expenses as a result of decrease in number of rounds by golf players and resulted in reduction in course maintenance and improvements projects carried out by Down-to-Earth prior to the renovation project started.

The increase in cost of food and beverage by $11,004 or 10% from $114,040 for the six months ended June 30, 2024 to $125,044 for the six months ended June 30, 2025 was mainly due to higher raw material prices for food and beverages during the period.

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 $1,885 was mainly due to the increase in purchasing cost of merchandise goods by our suppliers because inflation increases their production and operational costs.

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 $145,297 or 38% was primarily due to the increase in salaries paid to the Chief Financial Officer by approximately $90,000 and the directors fee paid to the audit committee members by approximately $71,000 and partially offset by the decrease in director’s remuneration paid to Mr. Chi Ping Cheung by approximately $10,000.

Our depreciation mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $102,797 and $100,038 for the six months ended June 30, 2025 and 2024 respectively.

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 $83,491 or 17% from $484,337 for the six months ended June 30, 2024 to $567,828 for the six months ended Jue 30, 2025 was mainly attributable to the increase in rental expenses, travelling expenses and director’s and officer’s liability insurance.

### Comparison for the three months ended June 30, 2025 and 2024

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 $743,312 for the three months ended June 30, 2024 to $1,028,735 for the three months ended June 30, 2025, which was primarily due to the increases in 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 $10,768 or 3% from $315,464 for the three months ended June 30, 2024 to $326,232 for the three months ended June 30, 2025 which was attributable to the increase in equipment repairs and maintenance by approximately $8,000 during the period.

The increase in cost of food and beverage by $15,930 or 37% from $43,232 for the three months ended June 30, 2024 to $59,162 for the three months ended June 30, 2025 was mainly due to higher raw material prices for food and beverages during the period.

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 $2,703 mainly due to the increase in purchasing cost of merchandise goods by our suppliers because inflation increases their production and operational costs.

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 $107,158 or 76% was primarily due to the increase in salaries paid to the Chief Financial Officer by approximately $15,000, the increase in the directors fee paid to the audit committee members by approximately $39,000 and the increase in director’s remuneration paid to Mr. Chi Ping Cheung by approximately $30,000.

Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The depreciation remained stable at $52,013 and $50,031 for the three months ended June 30, 2025 and 2024, respectively.

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 $146,882 or 80% from $182,822 for the three months ended June 30, 2024 to $329,704 for the three months ended June 30, 2025 was mainly attributable to the increase in professional fees by approximately $92,000, rental expenses by approximately $30,000, travelling expenses by approximately $18,000 and director’s and officer’s liability insurance by approximately $14,000.

### Comparison for the three and six months ended June 30, 2025 and 2024

### 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 $154,013 for the six months ended June 30, 2025 and $87,254 for the three months ended June 30, 2025 was mainly due to the dividend income generated from the cash deposit in money market accounts upon successful listing of common stocks in Nasdaq.

### 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, 2025 and 2024.

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, 2025, the Company had $498,464 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 $90,811 for the six months ended June 30, 2025 and income tax expenses of $137,837 for the six months ended June 30, 2024. The effective tax rate increased from 34.6% for the six months ended June 30, 2024 to 134.0% for the six months ended June 30, 2025, which was mainly due to the increase in operating costs of approximately $270,000 incurred by the Company which is not subject to income tax. The Company recorded income tax benefits of $53,518 and $22,145 for the three months ended June 30, 2025 and 2024, respectively, the increase in income tax benefits was mainly due to the reversal of deferred tax liabilities for the period.

Please refer to Note 11 – Income Tax to the Unaudited Condensed Consolidated Financial Statements for more details.

### Net (loss) income

Our net loss for the six months ended June 30, 2025 was $23,049 while our net income for the six months ended June 30, 2024 was $260,283. The decrease in net income by $283,332 or 109% was mainly due to the decrease in our revenue and the increase in our operating costs, being partially offset by the increase in our other income during the six months ended June 30, 2025.

Our net loss for the three months ended June 30, 2025 and 2024, was $289,261 and $69,101, respectively. The increase in net loss by $220,160 or 319% was mainly due to the decrease in our revenue and the increase in our operating costs, being partially offset by the increase in our other income during the three months ended June 30, 2025.

### 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, 2025 and December 31, 2024:

| Current assets | June 30, 2025 | December 31, 2024 | Changes% |  |
| --- | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $7,625,413 | $457,142 | $7,168,271 | 1,568% |
| Accounts receivable – net | 23,981 | 20,778 | 3,203 | 15% |
| Short-term investment | - | 6,778 | (6,778) | (100)% |
| Inventories, net | 37,805 | 55,817 | (18,012) | (32)% |
| Deferred offering costs | - | 582,679 | (582,679) | (100)% |
| Prepaid expenses | 234,310 | - | 234,310 | 100% |
| Other current assets | 21,564 | 2,078 | 19,486 | 938% |
| Total currents assets | $7,943,073 | $1,125,272 | $6,817,801 | 606% |
| **Current liabilities** |  |  |  |  |
| Accounts payable and accrued liabilities | $554,721 | $420,005 | $134,716 | 32% |
| Contract liabilities – deferred revenue | 154,386 | 162,226 | (7,840) | (5)% |
| Bank and other borrowings – current | - | 94,007 | (94,007) | (100)% |
| Operating lease liabilities – current | 199,652 | 195,115 | 4,537 | 2% |
| Due to related parties | 244,368 | 2,532,160 | (2,287,792) | (90)% |
| Total current liabilities | $1,153,127 | $3,403,513 | $(2,250,386) | (66)% |
| Working Capital Assets (Deficiency) | $6,789,946 | $(2,278,241) | $9,068,187 | (398)% |

36

### Accounts receivable

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

### 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.

### Deferred offering costs

Deferred offering costs consist of underwriting, legal and other expenses incurred through the balance sheet date that are directly related to the IPO. Deferred offering costs will be charged to shareholders’ equity netted against the proceeds upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred offering costs, as well as additional expenses to be incurred, will be charged to statements of income. The deferred offering costs was offset against the equity upon the listing during the current period which resulted in nil balance as of June 30, 2025.

### Prepaid expenses

Prepaid expenses represent the prepayment for (i) the non-refundable consultancy service of $150,000; (ii) the non-refundable prepaid annual listing fee to Nasdaq of $64,166; (iii) the refundable director’s and officer’s liability insurance premium of $56,000; and (iv) the refundable prepaid rental of $10,000. 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 $450,000 with service period of 36 months from March 15, 2025 to March 14, 2028. As of June 30, 2025, an aggregate of $450,000 was paid. The total amount in the contract will be amortized ratable to the service period since the services are expected to be provided evenly throughout the contract period. During the six months ended June 30, 2025, $43,750 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 $256,250. Regarding the annual listing fee starting from February 12, 2025 (the date that the common stock of the Company commencing public trading) after listing and prepaid obligation insurance for directors and officers starting from February 12, 2025, 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 $84,310 in aggregate was recognized as current portion of prepaid expenses.

### Accounts payable 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. Increase in accounts payable and accrued liabilities balance by $164,716 or 32% from $420,005 as of December 31, 2024 to $554,721 as of June 30, 2025 was mainly due to the increase in other payable by approximately $200,000 for the greens renovation in Remington Golf Club and offset by the decrease in property tax payable by approximately $52,000 due to the settlement of $102,000 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 decrease in this balance by $7,840 or 5% was mainly due to revenue recognized during the six months ended June 30, 2025 outweighed the annual membership dues being received in advance.

### Bank and Other Borrowings

The Company borrowed loans from various financial institutions for working capital purpose. The decrease in bank and other borrowings was mainly due to full settlement of all bank and other borrowing during the six months ended June 30, 2025 upon listing in February 2025.

### Operating lease liabilities

The operating leases liabilities represented the leases for corporate office, golf cars and golf equipment for terms of four to five years. The operating leases – current remained stable at $199,652 and $195,115 as of June 30, 2025 and December 31, 2024, respectively.

### Amounts due to related parties

Amounts due to related parties consist of the following:

| Name | Relationship | Nature | June 30, 2025 | December 31, 2024 |
| --- | --- | --- | ---: | ---: |
| Mr. Cheung Ching Ping | Shareholder and Director of the Company | Interest-free listing expense loans(1) | $- | $1,021,617 |
| Mr. Cheung Ching Ping | Shareholder and Director of the Company | Interest-free shareholder’s loans(2) | - | $607,272 |
| Mr. Cheung Ching Ping | Shareholder and Director of the Company | Director’s remuneration (3) | 30,000 | - |
| Mr. Cheung Chi Ping | Shareholder and Director of the Company | Interest-free shareholder’s loans(2) | - | 485,917 |
| Mr. Cheung Chi Ping | Shareholder and Director of the Company | Director’s remunerations(3) | 214,368 | 295,900 |
| Mr. Cheung Yick Chung | Shareholder of the Company | Interest-free shareholder’s loans(2) | - | 121,454 |
|  |  |  | $244,368 | $2,532,160 |

Notes:

(1) On September 7, 2023, Mr. Cheung Ching Ping, a shareholder of the Company, entered into a loan facility agreement with the Company that Mr. Cheung Ching Ping agreed to pay the listing expenses incurred for the initial public offering in Nasdaq on behalf of the Company before listing with a maximum principal amount of $1,000,000 which was then increased to $1,100,000 in January 2025. Pursuant to the facility agreement, the loan is interest-free, unsecured and repayable on the earlier of within 30 days from the date the Company’s common stock listed on Nasdaq, or December 31, 2025. As of December 31, 2024, the amount of listing expenses paid by Mr. Cheung Ching Ping on behalf of the Company was $1,021,617. The loan was fully settled during the six months ended June 30, 2025 upon listing.

(2) On April 24, 2014, Mr. Cheung Ching Ping, Mr. Cheung Chi Ping and Mr. Cheung Yick Chung entered into two shareholders’ loan agreements with Chrome Field I, Inc. and Chrome Field II, Inc., wholly-owned subsidiaries of the Company, respectively. Pursuant to the shareholders’ loan agreements, Mr. Cheung Ching Ping, Mr. Cheung Chi Ping and Mr. Cheung Yick Chung agreed to grant shareholders’ loans at principal amounts of $1,307,619.69 and $1,447,739.16 to Chrome Field I, Inc. and Chrome Field II, Inc., respectively, in a proportion of 50%, 40% and 10%, respectively, in connection with the acquisition of Kissimmee Bay and Remington in 2014. Pursuant to the shareholders’ loan agreements, the loans are interest-free, unsecured and to repayable on demand. As of December 31, 2024, amount of outstanding shareholders’ loans owned by the Company to Mr. Cheung Ching Ping, Mr. Cheung Chi Ping and Mr. Cheung Yick Chung was $607,272, $485,917 and $121,454, respectively. The outstanding balances were fully settled during the six months ended June 30, 2025 upon listing.

38

(4) For the six months ended June 30, 2025, the Company charged $30,000 as director’s remuneration 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 June 30, 2025, outstanding director’s remuneration was $30,000. The director’s remuneration payable to Mr. Cheung Ching Ping was fully settled in July 2025.

(3) 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 was granted by the Company every year based on the performance of the Company. For the six months ended June 30, 2025 and 2024, the Company charged $30,000 and $40,000, respectively, as director’s remuneration 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 June 30, 2025 and December 31, 2024, outstanding director’s remuneration was $214,368 and $295,900, respectively. The director’s remuneration payable to Mr. Cheung Chi Ping was fully settled in July 2025.

### Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities:

|  | For the six months ended June 30, 2025 | 2024 | Changes |
| --- | ---: | ---: | ---: |
| Cash (used in) provided by Operating Activities | $(337,364) | $394,512 | $(731,876) |
| Cash used in Investing Activities | $(448,740) | $(108,595) | $(340,145) |
| Cash provided by (used in) Financing Activities | $7,954,375 | $(133,133) | $8,087,508 |
| Net change in cash and cash equivalents | $7,168,271 | $152,784 | $7,015,487 |

### Cash Flow from Operating Activities

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.

During the six months ended June 30, 2024, our net cash provided by operating activities was approximately $394,512, which was driven by net income of $260,283, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash items mainly consisted of depreciation of $100,038 and unpaid director’s remuneration of $40,000. Changes in operating assets and liabilities mainly include (i) a decrease in deferred tax assets of $124,310 due to the utilization of NOLs for the prior period; (ii) an increase in accounts receivables of $21,695 due to more customers who paid by credit cards near the period end; and (iii) an increase in contract liabilities of $21,629 due to a large portion of annual membership dues being received during the prior period of 2024 for services to be used by customers partly in fiscal year 2024; and (iv) a decrease in accounts payable and accrued liabilities of $187,834 due to a decrease in accounts payable as a result of settlement of payables to vendors outweighed the costs incurred to vendors.

### Cash Flows from Investing Activities

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.

During the six months ended June 30, 2024, cash flows used in investing activities were for the purchase of property and equipment of $108,595, it is mainly due to the payment for the pump station.

### Cash Flows from Financing Activities

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.

During the six months ended June 30, 2024, cash used in financing activities was the result of payment for deferred offering costs of $306,409 and repayments of bank and other borrowings of $538,671 and partially offset by net proceeds from related party loans of $711,947.

### 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 $455,518 and $108,595 for the six months ended June 30, 2025 and 2024, respectively, which mainly related to the renovation and upgrading of our golf courses, clubhouse and facilities, greens renovation, roof renovation and purchase of pump station, respectively.

### Contractual Obligations

### Lease Agreements

The Company has six leases classified as right of use operating leases for corporate office, golf cars and golf equipment.

Future minimum lease payments under operating leases at June 30, 2025 were as follows:

| Year ending December 31, | Total |
| --- | ---: |
| 2025 (excluding six months ended June 30, 2025) | $115,145 |
| 2026 | 204,211 |
| 2027 | 165,966 |
| 2028 | 165,966 |
| 2029 | 112,006 |
| 2030 | 1,362 |
|  | $764,656 |
| Less imputed interest | (69,084) |
| Operating lease liabilities | $695,572 |

Future minimum lease payments under operating leases as of December 31, 2024 were as follows:

| Year ending December 31, | Total |
| --- | ---: |
| 2025 | $228,430 |
| 2026 | 200,125 |
| 2027 | 161,880 |
| 2028 | 161,880 |
| 2029 | 107,920 |
|  | $860,235 |
| Less imputed interest | (84,689) |
| Operating lease liabilities | $775,546 |

40

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

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.

The Company believes that, taking into consideration the successful listing in February 2025 and internal financial resources we have, including the current levels of cash and cash flows from operations, and the measures mentioned above, will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date of this report.

### Quantitative and Qualitative Disclosure About Market Risk

### Credit Risk

The Company’s principal financial assets are cash and cash equivalents, accounts receivables and prepaid expenses. 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 of June 30, 2025 and December 31, 2024 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, 2025 and December 31, 2024, the Company owed 74% and 84% of accounts payable to a key supplier, respectively.

For the six months ended June 30, 2025 and 2024, one vendor accounted for 26% and 31% 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, 2025 and 2024, respectively.

For the three months ended June 30, 2025 and 2024, one vendor accounted for 25% and 35% 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, 2025 and 2024, 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.

### 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. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs.

### 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.

## Market risk

As filed, 209 characters.

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.

## Controls and procedures

As filed, 1,867 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our 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 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 Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (2) 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.

### 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).

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001493152-25-011966. Last ingested by Listed: Nov 5, 2026, 20:40 ET. No prices; not investment advice.