Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The information set forth in this section contains certain “forward-looking statements”, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully expand our business. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.
We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.
Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations affecting our operations.
You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Annual Report.
US Dollars are denoted herein by “USD”, “$” and “dollars”.
General Overview of Operations
We own and operate two public golf country clubs in Florida that we acquired in 2014. Our golf country clubs include two golf-courses with over 13,000 yards of combined fairways, clubhouses boasting food and beverage options, aquatic golf ranges, and pro shops to assist any level of golfers. Our two golf country clubs are situated on over 289 acres of multi-service recreational property.
Each of our golf country clubs is organized into four revenue streams: (i) golf operations, (ii) sales of food and beverage; (iii) sales of merchandise; and (iv) ancillary income.
Management’s Plans
Over the next twelve months, we plan to continue to promote, market, manage and operate our golf country clubs with the intent to (i) attract and retain customers across a number of demographic groups to further develop customer loyalty and capture a greater share of customers in the greater Orlando Florida region and (ii) increase revenue from managing and operating our golf country clubs.
We believe attracting and retaining customers while increasing customer engagement and loyalty by providing what we believe to be a high quality golfing experience will drive our revenue. Drivers of our revenue growth will require continued efforts in maintaining and improving upon the quality of our customers’ experiences at our golf country clubs. To that end, we have successfully completed the following major renovations during Q3 of 2025:
Installing 19 brand new TiffEagle greens at Remington Golf Club;
Extensively renovated the interior and exterior of the Clubhouse at Kissimmee Bay Country Club
In addition, we will continue to review and seek to expand our portfolio through regional country club acquisitions.
Key Factors Affecting our Results of Operations
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 experienced more than average rainy days during the first three months ended March 31, 2025 causing our revenue to be under pressure.
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 has subsequently impacted the labor, fertilizer and chemical markets. The maintenance cost and contract with DTE was further renewed in November 2025 and the contractual price has been increased by approximately 10% starting from November 2025.
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. Through careful planning and scheduling, we completed an extensive interior and exterior renovation of our clubhouse located at Kissimmee Bay Country Club with no disruption to daily business operations. However, in case of Remington Golf Club, the golf club had to be temporarily closed for renovation starting from May 17, 2025. The renovation was successfully completed, and the golf club was re-opened on October 3, 2025. During the renovation period, we removed all old greens at Remington Golf Club and installed new TifEagle greens. The renovation project had an adverse effect on our businesses revenue at Remington Golf Club. The results of operations and the financial impact has been reflected in our results for the year ended December 31, 2025.
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial statements include the accounts of the Company and its wholly-owned subsidiaries. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All significant inter-company transactions and balances between members of the Group are eliminated upon consolidation.
Critical Accounting Policies, Judgments and Estimates
We prepare our financial statements in accordance with generally accepted accounting principles of the United States (“GAAP”). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year.
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 for making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for expected credit loss, allowance for deferred tax assets, the impairment assessment of property and equipment, estimated incremental borrowing rate of lease and the valuation of stock-based compensation. Actual results could differ from those estimates.
When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policy and practice is revenue recognition, property and equipment, stock-based compensation and income tax. For the details of the accounting policies of these critical accounting policies, please refer to Note 2 to the consolidated financial statements.
Results of Operations
For the Years Ended December 31,
Revenue
Golf operations
Sales of food and beverage
Sales of merchandise
Ancillary revenue
Total revenue
Operating costs:
Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below)
Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below)
Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below)
Salaries and benefits
Depreciation
Legal and professional fees
Other general and administration expenses
Total operating costs
Loss from operations
Other income (expense)
Interest expense
Other income
Total other income, net
Loss before income tax
Income tax (benefits) expenses
Net Loss
Revenue
Revenues disaggregated by major revenue streams for years ended December 31, 2025 and 2024 are disclosed in the table below:
For the Years Ended
December 31,
Changes
Golf operations
– annual membership dues
– one-time green fees
Sales of food and beverage
Sales of merchandise
Ancillary revenue
Our revenue is mainly comprised of golf operations, sales of food and beverage and sales of merchandise. Overall decrease in revenue period over period by $333,984 or 10% was mainly due to the decrease in all revenue stream.
Revenue from golf operations decreased by $268,802 or 11% from $2,443,178 for the year ended December 31, 2024 to $2,174,376 for the year ended December 31, 2025, which was mainly driven by the decrease in one-time green fees from golf operations by $255,437 or 12% and the decrease in annual membership dues by $13,365 or 4%.
Revenue from annual membership dues accounted for 10% and 9% of total revenue for the years ended December 31, 2025 and 2024, respectively. It decreased by $13,365 or 4% mainly due to the lower demand for annual memberships, a direct result of one of our golf courses being closed for renovation from May 17, 2025 to October 2, 2025.
One-time green fees from golf operations accounted for 64% and 65% of total revenue for the years ended December 31, 2025 and 2024 respectively. Decrease in one-time greens fees by 12% resulted from the decrease in total number of rounds by approximately 9% from approximately 56,000 rounds during the year ended December 31, 2024 to approximately 51,000 rounds during the year ended December 31, 2025 and the decrease in average price per round by approximately 3% from $38 per round for the year ended December 31, 2024 to $37 per round for the year ended December 31, 2025. The decrease in revenue was due to one of our golf courses, Remington Golf Club, was closed for renovation during the period as mentioned above.
Decrease in revenue from sales of food and beverage by $33,741 or 5% from $648,738 for the year ended December 31, 2024 to $614,997 for the year ended December 31, 2025 was contributed by a decrease in quantities sold by 5% from approximately 103,000 for the year ended December 31, 2024 to approximately 98,000 for the year ended December 31, 2025 while the average unit price remained stable at $6 per unit for both years. The decrease in quantities sold was in line with decrease in golf operations.
Decrease in revenue from sales of merchandise by $9,882 or 9% from $115,262 for the year ended December 31, 2024 to $105,380 for the year ended December 31, 2025 was contributed by a decrease in sales of golf balls, men’s and ladies’ wear and gloves by 12% as a result of the decrease in customers playing golf during the year ended December 31, 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 $21,559 or 24% was mainly due to the decrease in demand for rental services for activities and events during the year ended December 31, 2025.
Operating expenses
Operating expenses consisted of the following:
For the Years Ended
December 31,
Changes
Golf operating costs(1)
Cost of food and beverage sales(1)
Cost of merchandise sales(1)
Salaries and benefits
Depreciation
Legal and professional fees
Other general and administrative expenses
Exclusive of depreciation and salaries and benefits shown separately above.
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 by $3,890,183 or 112% from $3,480,393 for the year ended December 31, 2024 to $7,370,576 for the year ended December 31, 2025, which was primarily due to the increase in salaries and benefits and other general and administrative expenses during the current year with details discussed below.
Golf operating expenses consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating costs by $45,478 or 3% from $1,367,958 for the year ended December 31, 2024 to $1,413,436 for the year ended December 31, 2025 which was attributable to the contractual price for the maintenance contract with Down-to-Earth, which increased as a result of the contract renewal.
The increase in cost of food and beverage sales by $18,051 or 10% from $186,602 for the year ended December 31, 2024 to $204,653 for the year ended December 31, 2025 was mainly due to higher raw material prices for food and beverages during the year.
Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wear, gloves and headwear. Increase in cost of merchandise sales by $2,248 was 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, operating team, cashier and administrative personnel. The increase in salaries and benefits by $2,576,740 or 356% was primarily due to the increase in stock-based compensation by $1,890,958 in relation to the grant of stock options, the increase in directors’ fee by approximately $456,000 and the increase in salaries paid to the Chief Financial Officer by approximately $140,000.
Our depreciation is mainly derived from depreciation of the recreational building, golf carts, pump stations and other operating equipment. The increase in depreciation was mainly due to the additions of property and equipment of $1,074,008 during the current year.
The increase in our legal and professional fees by $433,116 or 1 44 % was mainly due to the (i) increase in legal costs by approximately $280,000 resulted from various corporate exercises conducted during the year, such as the grant of stock options and the private placement; and (ii) consultancy service fee of $118,750 was recognized during the year.
Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machinery 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 $795,163 or 123% from $645,406 for the year ended December 31, 2024 to $1,440,569 for the year ended December 31, 2025 was mainly attributable to the increase in legal and consulting fees by approximately $400,000, rental expenses by approximately $100,000, travelling expenses by approximately $204,000, director’s and officer’s liability insurance by approximately $345,000 and charitable donations by approximately $68,000.
Other income (expenses)
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 $618,489 for the year ended December 31, 2025 was mainly due to the dividend income generated from cash deposit in money market accounts following the successful listing of our common stocks on Nasdaq.
Income tax (benefits) 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 years ended December 31, 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 net operating losses and temporary difference can be utilized.
As of December 31, 2025, the Company had $1,166,970 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 benefits of $91,412 for the year ended December 31, 2025 and income tax expenses of $20,936 for the year ended December 31, 2024. Please refer to Note 12 – Income Tax to the Consolidated Financial Statements for more details.
Net loss
Our net loss for the year ended December 31, 2025 was $3,677,030 as compared to a net loss of $183,700 for the year ended December 31, 2024. The increase in net loss by $3,493,330 or 1,902% was mainly due to the decrease in our revenue by $333,984 and increase in our operating costs by $3,890,183 and offset by the increase in other income of $618,489 as mentioned above.
Working Capital
The following table summarizes our cash and working capital as of December 31, 2025 and 2024:
December 31,
December 31,
Changes
Cash and cash equivalents
Accounts receivable – net
Short-term investment
Inventories, net
Deferred offering costs
Prepaid expenses
Other current assets
Total currents assets
Accounts payable, other payables and accrued liabilities
Contract liabilities – deferred revenue
Bank and other borrowings – current
Operating lease liabilities – current
Due to related parties
Total current liabilities
Working Capital Assets (Deficiency)
Accounts receivable
Accounts receivable mainly represent credit cards or cash deposits in transit, amounts due from customers paid by credit cards for provision of golf operations services and sales of merchandise and food and beverages which are recorded net of allowance for expected credit loss. Increase in balance was mainly due to the more customers who paid by credit cards near the year 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 operations. The deferred offering costs was offset against the equity upon the listing during the current year which resulted in nil balance as of December 31, 2025.
Prepaid expenses
Prepaid expenses represent the prepayment for (i) the consultancy service of $331,250; (ii) the prepaid annual listing fee to Nasdaq of $7,384; (iii) the director’s and officer’s liability insurance premium of $73,166; (iv) the membership fee for different golf clubs with current portion of $71,263 and non-current portion of $307,571; and (v) other prepaid expenses of $12,789 which was classified as current portion. These prepaid amounts are recognized as expenses over the respective service periods as the related benefits are received.
On March 17, 2025, the Company entered into a Strategic Services Agreement with Cross Border Capital Limited (“CBCL”), a Hong Kong-based advisory firm, pursuant to which CBCL agreed to provide the Company with business development leads for the acquisition of golf properties in Asia, golf property management contracts, and strategic corporate relationships in China, Japan, South Korea, Taiwan, and Singapore, for a period of 36 months ending March 14, 2028. The total fee under the agreement is $450,000, all of which was paid during fiscal year 2025. The agreement also provides for a success fee equal to 10% of the total contract value or profits of any transaction completed in connection with CBCL’s services. The total amount in the contract will be amortized ratably to the service period since the services are expected to be provided evenly throughout the contract period. During the year ended December 31, 2025, $118,750 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 $181,250.
Regarding the annual listing fee starting from February 12, 2025 (the date that the common stock of the Company commencing public trading) after listing with gross payment of $64,167 and prepaid obligation insurance for directors and officers starting from July 25, 2025 with gross payment of $129,994, the service contract has one year term and the prepaid amount was amortized throughout the contract period starting from the date of contract and the amortization costs were recognized as other general and administration expenses while the remaining balance amounting to $80,550 in aggregate was recognized as current portion of prepaid expenses.
Regarding the golf club membership fees, the Company prepaid $322,500, $38,000, and $20,836 for golf clubs located in mainland China, London, and Scotland, respectively, during the year ended 31 December 2025. The membership periods for these clubs are starting from November 20, 2025 to September 30, 2051, one year starting from January 1, 2026, and one year starting from January 1, 2026, respectively. The prepaid membership fees will be amortized according to the term for the membership since the Company expected the usage will be evenly distributed over the time period. Subsequent to year end on March 23, 2026, the board of directors approved the disposal of all three golf club memberships. The Company entered into two separate agreements to dispose (i) one golf club membership with a carrying amount of $319,998 as of December 31, 2025 for a cash consideration of $322,500 (the original acquisition price by the Company) to Mr. Cheung Chi Ping, director of the Company, and (ii) two golf club memberships with an aggregate carrying amount of $58,836 as of December 31, 2025 with a cash consideration of $58,836 (the original acquisition price by the Company) to Mr. Cheung Ching Ping, director of the Company. The disposal prices were based on the original acquisition costs of the memberships, which management believes approximate their fair values. The transactions were approved by the board of directors. All cash consideration of $381,336 was received by March 31, 2026.
Accounts payable, other payables and accrued liabilities
Accounts payable, other payables and accrued liabilities represented the payable to the vendors for the course upkeep costs, credit cards charge payables, sales tax payables and property tax payable. Increase in accounts payable and accrued liabilities balance by $268,922 or 64% from $420,005 as of December 31, 2024 to $688,927 as of December 31, 2025 was mainly due to the increase in accounts payable by $53,176, as costs incurred to vendors exceeded settlements during the year, and an accrued audit fee of $115,000 for the year ended December 31, 2025.
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 $16,246 or 10% was mainly due to revenue recognized during the year ended December 31, 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 year months ended December 31, 2025 upon listing in February 2025.
Operating lease liabilities
The operating leases liabilities represented the leases for golf carts and golf equipment for terms of four to five years. The increase in current operating leases liabilities was mainly due new leases being signed during year ended December 31, 2025.
Amounts due to related parties
Amounts due to related parties consists of the following:
Name
Relationship
Nature
December 31, 2025
December 31, 2024
Mr. Cheung Ching Ping*
Shareholder and Director of the Company
Interest-free listing expense loans (1)
Mr. Cheung Ching Ping*
Shareholder and Director of the Company
Interest-free shareholder’s loans (2)
Mr. Cheung Ching Ping*
Shareholder and Director of the Company
Director’s remuneration (3)
Mr. Cheung Ching Ping*
Shareholder and Director of the Company
Payment operating costs on behalf of the Company
Mr. Cheung Chi Ping**
Shareholder and Director of the Company
Interest-free shareholder’s loans (2)
Mr. Cheung Chi Ping**
Shareholder and Director of the Company
Director’s remunerations (4)
Mr. Cheung Chi Ping**
Shareholder and Director of the Company
Repayment of borrowings on behalf of the Company
Mr. Cheung Yick Chung
Shareholder of the Company
Interest-free shareholder’s loans (2)
*On January 28, 2026, Mr. Cheung Ching Ping resigned as Chairman of the Board and a Director of the Board, effective as of January 29, 2026.
** On January 28, 2026, Mr. Cheung Chi Ping resigned as a Director of the Board, effective as of January 29, 2026.
Notes:
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 year ended December 31, 2025 upon listing.
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 year ended December 31, 2025 upon listing.
For the year ended December 31, 2025, the Company charged $207,500 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 December 31, 2025, the director’s remuneration payable to Mr. Cheung Ching Ping of $100,000 was fully settled in January 2026.
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 year ended December 31, 2025 and 2024, the Company charged $215,000 and $110,000, 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 December 31, 2024, outstanding director’s remuneration was $295,900. As of December 31, 2025, the director’s remuneration payable to Mr. Cheung Chi Ping of $100,000 was fully settled in January 2026.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the years ended December 31, 2025 and 2024:
For the Years Ended
December 31,
Cash (used in) provided by Operating Activities
Cash used in Investing Activities
Cash provided by (used in) Financing Activities
Net change in cash and cash equivalents
Cash Flow from Operating Activities
During the year ended December 31, 2025, our net cash used in operating activities was approximately $2,028,348, primarily arising from net loss of $3,677,030, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash items mainly consisted of depreciation of $220,500, unpaid director’s remuneration of $200,000, stock-based compensation of $1,890,958 and provision for allowance for expected credit losses of $5,277. Changes in operating assets and liabilities mainly include (i) an increase in prepaid expenses of $803,423 due to the prepaid consultancy fee, prepaid annual listing fee to Nasdaq, prepaid membership fee for different golf clubs and prepaid director’s and officer’s liability insurance premium during the current year as mentioned above; (ii) an increase in accounts payable, other payables and accrued liabilities of $268,922 due to increase in accounts payable and accrued audit fee as mentioned above; and (iii) increase in deferred tax assets of $82,095.
During the fiscal year ended December 31, 2024, our net cash provided by operating activities was approximately $89,676, primarily arising from net loss of $183,700, as adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash items mainly consisted of depreciation of $201,113 and unpaid director’s remuneration of $110,000. Changes in operating assets and liabilities mainly include (i) a decrease in accounts receivables of $15,521 due to decrease in customers who paid by credit cards near the year end; (ii) a decrease in accounts payable, other payables and accrued liabilities of $75,925 due to decrease in accounts payable by $121,708 as a result of settlement of payables to vendors outweighed the costs incurred to vendors and offset by the increase in accrued expenses of $65,042 in relation to the audit fee; and (iii) increase in deferred tax liabilities of $11,958 due to increase in the temporary difference derived from the accelerated depreciation of property and equipment.
Cash Flows from Investing Activities
During the year ended December 31, 2025, cash flows used in investing activities were for the purchase of property and equipment of $1,074,008. 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 fiscal year ended December 31, 2024, cash flows used in investing activities were mainly for the purchase of property and equipment of $126,679 including pump station and the installation of new air-conditioner system and our investment in money market funds which comprises of United States short-term treasury bills of $6,778.
Cash Flows from Financing Activities
During the year ended December 31, 2025, cash provided by financing activities was the result of net proceeds from issue of common stocks of $10,654,093, net proceeds from pre-funded warrants of $23,520,000 and partially offset by net repayments of related party loans of $2,576,013, repayments of bank and other borrowings of $192,378 and payment of deferred offering costs of $171,180 during the year following the successful listing.
During the fiscal year ended December 31, 2024, cash used in financing activities was the result of deferred offering costs of $329,715 and repayments of bank and other borrowings of $592,937 and partially offset by net proceeds from related party loans of $770,753.
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 are material to stockholders.
Capital Expenditures
We incurred capital expenditures of $1,074,008 and $126,679 for the years ended December 31, 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 eight leases classified as right of use operating leases for golf cars and golf equipment.
Future minimum lease payments under operating leases as of December 31, 2025 were as follows:
Year ending December 31,
Total
Less imputed interest
Operating lease liabilities
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.
On July 23, 2025, the Company has entered into definitive securities purchase agreements with accredited and institutional investors for the issuance and sale of units consisting of common stock (each a share of “Common Stock”) (or pre-funded warrants (“Pre-funded Warrants”) to purchase in lieu thereof) together with common A warrants and common B warrants (each of the common A and common B warrants a “Common Warrant”) to purchase the same number of shares of common stock (or Pre-funded Warrants) of the Company at a price of $0.87 per unit, on a brokered private placement basis, for aggregate net proceeds of approximately $23.52 million, after deducting fees and offering expenses.
The Company believes that, taking into consideration the successful IPO listing on Nasdaq capital market in February 2025, the private placement in July 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.
Material weaknesses
We have not completed an assessment of the effectiveness of its internal control over financial reporting and our independent registered public accounting firm has not conducted an audit of its internal control over financial reporting. However, during the years ended December 31, 2025 and 2024, management identified material weaknesses in our internal control over financial reporting as well as other control deficiencies for the above-mentioned periods. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual financial statements will not be prevented or detected on a timely basis. The material weaknesses identified related to (i) inadequate segregation of duties for certain key functions due to limited staff and resources; and (ii) a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to formalize key controls over financial reporting and to prepare consolidated financial statements and related disclosures. We intend to implement measures designed to its internal control over financial reporting to address the underlying causes of these material , including (i) hiring more qualified staff to fill up the key roles in the operations; and (ii) setting up a financial and system control framework with formal documentation of polices and controls in place.
Quantitative and Qualitative Disclosure About Market Risk
Credit Risk
The Company’s principal financial assets are cash and cash equivalents, accounts and other receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. The Company has not experienced losses on their accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.
Management believes that the Company is not exposed to any significant credit risk with respect to its cash.
The Company mitigates its credit risk on receivables by actively managing and monitoring its receivables. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. Since all receivable as of December 31, 2025 and December 31, 2024 are aged within one year and collected all receivables subsequent to year end, minimum credit risk was noted for receivable.
Vendor concentration risk
As of December 31, 2025 and 2024, the Company owed 87% and 94% of accounts payable to a key supplier, respectively.
For the years ended December 31, 2025 and 2024, one vendor accounted for 15% and 31% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the years ended December 31, 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.
