Item 1. Business
Item 1. Business
Overview
We
own and operate two public golf country clubs in Florida that each feature a golf-club, consisting of over 289 acres of multi-service
recreational property. 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 golfer. We believe our golf country clubs are a
serene combination of approachable golf and nature that are designed to appeal to local residents and tourists alike. Both of our golf-courses
are aesthetically complemented by nearby waterways of which we believe provide both our golf-courses with scenic backdrops and enhance
our customers’ golfing experience. Our golf country clubs also host local golf leagues, golf-tournaments, and private events. We
believe the natural elements and diverse challenges of our golf-courses, services and amenities offers a compelling value to our customers
and will allow our facilities to maintain customer loyalty while being an attractive tourist destination in the greater Orlando Florida
region. Moreover, we believe that “green fees” or entry fees at our golf-courses are priced affordably compared to Orlando’s
resort area courses, and as a result are popular especially during our peak winter season in the greater Central Florida region. The
property underlying both of our golf country clubs and the owner of that property is part of and subject to the Association, a not-for-profit
corporation homeowners association. Leveraging our two golf country clubs, we plan to (i) continue to develop customer loyalty and capture
a greater share of the golf-players who live in- or visit-the greater Orlando region and (ii) increase our revenue from the operation
of our golf country clubs. We believe the quality of our golf-courses and the amenities we offer will continue to enhance our ability
to attract and retain golf-players across a number of demographic groups and skill levels.
Each
of our golf country clubs is organized into four principal business segments: (i) golf recreation, retail golf products, and equipment
and facilities rental, (ii) membership dues, (iii) food and beverage services. and (iv) ancillary services and amenities. Each of the
golf-courses featured at our golf country clubs present a different set of physical and strategic challenges depending on the layout
and where we place the position of a ball-hole and flagstick on a green from time to time during the golf-season. We believe this variation
helps to create an enjoyable experience for our customers, no matter how many times they have visited our golf-courses before. Our golf
country clubs are less than a mile away from one another, providing our customers with an excellent option for a 36-hole day of golf
at both of our facilities. Our customers will encounter similar elements at our golf-courses that may be found at most golf courses which
include but are not limited to what we consider to be the essential parts of a golf-course: greens, fairways, and hazards—such
as bunkers or the rough.
The
“tee” is located in the “tee box” where each hole of a golf-course begins. The “green” is where the
hole and flagstick are located. The “fairway” is a stretch of short grass between the tee box and the putting green. The
goal of the game of golf is to get the golf ball from the tee, and into the hole on the green with the fewest strokes possible. Every
hole of each course ends at the green. The tee box is a close-cut area of grass at the starting point of the hole. Our golf-courses have
several tee boxes available for our customers to choose from based on a customer’s skill level. Usually, tees near the fairway
are meant for beginners, while more advanced golf-players are better suited to hit a golf-ball from the back tees at the beginning of
each hole on a golf-course. For example, our tee boxes are marked by colors which correlate to a recommended skill level to make it easy
for our customers to decide where to start. Once a customer has chosen where to “tee off” or drive the ball towards the green,
they can place a ball on a tee and take a swing.
Our
golf-courses include a number of intentionally designed obstacles our customers should strategically avoid on the golf-course which are
known as “hazards” or areas referred to “the rough”. We believe these hazards keep each round of golf interesting
and challenging for our customers. Our customers should strategically avoid landing a golf ball near or on hazards such as water or bunkers,
which are narrow pits filled with sand. Similarly, our customers should avoid hitting a ball near or around the rough, which is a manicured
and longer-cut area of grass surrounding our fairways and greens because it is usually difficult and unpredictable to hit a ball from
the rough. If a customer has their ball in the rough or in a sand trap, they often move the ball back to the fairway or into the green
with golf country clubs known as sand wedges, lob wedges, or pitching wedges. However, if a customer cannot hit the ball, they must take
a one-stroke penalty and either hit the ball again or drop their golf ball near the hazard, but not closer to the hole.
The
grass we place on our greens is the most highly manicured area on the course. We maintain the greens so that the grass contained therein
is short so that the ball can easily roll. Before a customer takes a shot on the green, they must read the ground conditions. To read
the conditions of the green, a customer often makes note of the highest point on the surface because golf-putts (or shorter golf-ball
taps) will usually roll away from that point. For example, sometimes wet, humid conditions like those in Florida will cause a green to
slow a golf-ball down which may cause golf-putts to stick to the grass. Our greens superintendent regularly measures the rolling speed
of our greens using a “stimpmeter” to assess the “stimp” of our putting greens which helps us determine whether
additional topdressing of sand is needed on each of our greens to keep the roll fast and consistent. The stimp represents the numerical
value that represents how fast the golf ball rolls on the putting surface while a “Stimpmeter” device is used to measure
the speed of a golf course green by applying a known velocity to a golf ball and measuring the distance traveled in feet. The lower the
stimp, the slower the greens while, the higher the stimp, the faster the greens. We believe manicuring the greens is important to our
customers and that the manicured greens create a more enjoyable experience at our golf country clubs.
3
We
acquired both of our golf country clubs in 2014, and since then, our management team has grown alongside the business. Similarly, our
revenue has increased steadily during the last five years due to efforts from our greens superintendent as well as the executive management
team. We believe recent capital improvements at both golf country clubs will help the facilities and our golf-courses progressively grow
in stature and reputation in order to keep up to date with future infrastructure needs that can meet future demand and structural wherewithal.
As a result of these upgrades and our management’s plans for growth, we believe they have gained valuable experience and are well-equipped
to take on additional assets and continue to enhance the performance of both golf country clubs since our initial acquisition in 2014.
The following provides an overview of the unique features and services offered by both of our golf country clubs.
The
Kissimmee Bay Country Club
The
Kissimmee Bay Country Club (“Kissimmee Bay”), located south of Orlando, Florida, was designed by Clifton, Ezell & Clifton
and hosts a par 71 18-hole course with five colored sets of tee boxes with increasing difficulty designated by color with a total yardage
of 6,830, lined with oak trees that we believe date back a hundred years that blend with classic palm trees to anchor and frame the vistas
across Kissimmee Bay. In 2017, we upgraded Kissimmee Bay’s greens with highly manicured “champion G12” grass, a new
cultivar of champion ultradwarf Bermuda grass which now line the greens on Kissimmee Bay’s course. To that end, due to the course’s
acclaimed beauty and value, in 2023 Kissimmee Bay was appropriately recognized and named by Golf Digest magazine as one of “Best
Courses in Orlando under $100.” 1
While
open to the public daily, Kissimmee Bay is also intertwined with the local community through our membership in the Association and maintains
100 members as of September 30, 2024. It is specifically located in a neighborhood in Kissimmee, Florida near the intersection of Irlo
Bronson Hwy (US192) and the Florida Turnpike. This golf-course opened for play in 1990 and is situated approximately fifteen minutes’
drive from Orlando International Airport and just west of East Lake Tohopekaliga. For the twelve months ended 2023, 40,623 rounds of
golf were played.
In
addition to standard recreational golf and related services, Kissimmee Bay guests enjoy accommodations that include a full kitchen, antique-display,
bar, and banquet room where we offer what we believe are popular crowd-pleasing menu-items. Kissimmee Bay’s event space can comfortably
seat large golf events as well as private events including weddings, galas, banquets, business meetings, and holiday parties. These events
generate significant business for our club, and help to drive club visibility, while increasing our food and beverage sales and facility
utilization. Kissimmee Bay’s clubhouse walls also feature a display adorned with rare golf antiques that we believe are rare in
the golf world. Kissimmee Bay hosts a local rotary club’s weekly meetings which maintains possession of those golf antiques. The
antiques are not held by Kissimmee Bay.
The
Remington Golf Club
The
Remington Golf Club (“Remington”) was designed by architects Clifton, Ezell & Clifton and hosts a par 72 18-hole course
with five colored sets of tee boxes with increasing difficulty designated by color with a total yardage of 7,111. Remington is designed
along hardwood trees, palm trees and classic and tropical flora and was built in 1996.
Remington
Golf Club is specifically located in Kissimmee Florida near the intersection of Irlo Bronson Hwy (US192) and the Florida Turnpike.
Remington opened for play in May 1996. Remington is also intertwined with the local community through our membership in the
Association and has 30 members as of the date of this Annual Report. Approximately 34,493 rounds of golf were played at
Remington for the twelve months ended December 31, 2024.
Remington’s
clubhouse features a full kitchen, a bar, a pro-shop and three of our offices. Remington offers customers a no-frills golf experience
for casual recreational play. We offer hot and cold food options at Remington’s clubhouse.
1
The best courses you can play in Orlando under $100. Golf Digest. (January 21, 2023).
https://www.golfdigest.com/courses/guides/best-public-golf-courses-orlando-under-100-dollars
4
The
property underlying both of our golf country clubs and the owner of that property is part of and subject to the Association, a not-for-profit
corporation homeowners association. The Association is the governing homeowners’ association which is responsible for the operation
of the Kissimmee Bay community in which the Association’s voting membership is made up of owners, and in which membership is a
mandatory condition of property ownership in the community. Each household within the association is entitled to cast one vote and the
owner of our golf country clubs is entitled to cast ten votes at each Association meeting where Association-wide matters may be voted
on. As of March 1, 2024, there were approximately 293 households in the Association and the golf country club owner’s vote represents
approximately 3% of the total votes that may be cast. The Association is governed by a “Master Declaration of Covenants, Conditions,
Restrictions, Easements and Reservations” for Kissimmee Bay (the “CCR”) that, among other things, (i) limits certain
of our property use, (ii) imposes several reciprocal and non-reciprocal easements on us, (iii) outlines design guidelines on our property
that we and the Association owners must adhere to and (iv) creates the Association that has the power to levy assessments and liens,
review proposed architectural changes and govern common amenities. We provide club memberships to a group of legacy members who are part
of the Association pursuant to the CCR who enjoy the lifestyle of patronizing Kissimmee Bay and Remington year-round. The Association’s
CCR does not materially interfere with the ordinary course of business of the Company or any of its subsidiaries.
Corporate
Structure and History
Aureus
Greenway Inc. was incorporated in the State of Nevada on December 22, 2023, under The Nevada Revised Statutes (the “NRS”).
Our principal executive offices are located at 2995 Remington Boulevard Kissimmee, Florida 34744, and our telephone number is (407) 344
4004. Our current registered office and current principal place of business in Nevada are located at 701 S. Carson Street, Suite 200,
Carson City, NV 89701. Our website address is www.aureusgreenway.com.
Aureus
Greenway is a holding company incorporated in Nevada and headquartered in Florida. As a holding company with no material operations of
its own, Aureus Greenway conducts operations through its subsidiaries in the State of Florida, in the United States.
The
following diagram illustrates our current corporate structure as of the date of this report:
Our
Business Model
5
We
are the manager and operator of golf country clubs just south of Orlando, Florida. We believe that our golf country clubs are designed
to appeal to a wide-ranging population that attracts customers across a number of local and tourism-driven demographic groups. We believe
the combination of our geographic location and approachable golf-courses allow us to capture a greater share of a broad base of customers’
discretionary leisure spending. We believe our golf country clubs are designed to provide customers with lush and serene backdrops where
they can enjoy leisure and social activities.
Both
of our golf-courses are conveniently located just south of Orlando, Florida and both Remington and Kissimmee Bay are an approximate 23-minute
drive to popular attractions such as Walt Disney World Resort. Similarly, both our golf-courses are easily accessible via major highways
and in close proximity to Orlando International Airport. According to Frost & Sullivan Limited, whom we commissioned in December
2023 to produce a report which covers and analyzes the golf club industry for a period of 2018-2022, Orlando, Florida is one of the most
visited cities in the world for leisure travelers with domestic and international visitors combined rising from 111.8 million in 2018
to 137.4 million in 2022. Further, both our golf-courses are open for play to the general public provided, however, Kissimmee Bay and
Remington maintain club memberships in order to provide exclusive benefits to those members, including but not limited to, reduced green
and food and beverage fees. For the fiscal year ended December 31, 2024, Kissimmee Bay accounted for 58% of our total club
revenue and business, Remington accounted for 42% of our total club revenue and business.
We
are a service-oriented business, but we depend on a number of third-party suppliers in order to comprehensively operate our golf country
clubs and its and supply our customers with enjoyable leisure experiences. Our large suppliers include equipment and service suppliers,
all of whom are independent third parties. These third-party vendors include but are not limited to our golf-course maintenance, equipment,
professional service providers, golf cart supplier, golf merchandise suppliers, and food and beverage suppliers. Moreover, as a leisure
business, we do not depend on any individual customer. Instead, our primary goal is to continuously enhance our quality and services
to ensure every customer has a positive experience in order to recommend and revisit either of our golf country clubs. Our golf-courses
provide a broad variety of golf services to appeal to a diverse group of families and individuals who lead an active lifestyle and seek
flexible access to a public golf-course near Orlando, Florida. Our operations are seasonal in nature, and we experience annual peak and
shoulder seasons which are determined by the climate in Central Florida, as well as factors that we believe include regional and holiday-driven
tourism, discretionary leisure spending associated with larger national or regional macroeconomic trends. The shoulder season is comprised
of months before and after the peak season and historically includes mid-April to May, and October to December, while our peak season
historically includes January through mid-April. Slow season historically takes place during Florida’s summers, inclusive of June
through September. Our operations, services and revenue streams are organized into four principal business sectors: (i) golf recreation,
retail golf products, and equipment and facilities rental, (ii) membership dues, (iii) food and beverage services. and (iv) ancillary
services and amenities.
Golf
Recreation
Green Fees. For
the years ended December 31, 2024 and December 31,
2023, we generated approximately 65% and 70% of our
gross revenue from collecting daily green fees which each golfer is charged for every round of eighteen holes that golfer plays, respectively.
Green fee rates differ by the day of the week, time of day, or season. In both Kissimmee Bay and Remington, our club golf cart rentals
are included with green fees which we believe allow our customers to traverse each round with ease and keep traffic flowing throughout
our golf clubs. We also feature practice putting greens at both clubs in order for our customers to practice their short distance golf-games.
Short-game is where golf-players practice finesse-related skills due to the need for accuracy over short distances. Practice greens, also
called putting greens are included with green fees and are popular amongst those customers warming up before a round of golf. For the
fiscal years ended December 31, 2024, and 2023, our green fees revenue decreased from $$2,475,133 to $2,139,636, respectively representing
a year over year decrease of approximately 14%.
Driving
Ranges. Both Remington and Kissimmee Bay offer driving ranges for golfers to practice their long golf-game. Our driving ranges are
unique because they are both aquatic ranges and provide an exciting opportunity for our guests to practice their long-range golf swings
over waterways. In the long game aspect of golf that is practiced at our golf ranges, power and distance are required so that a golf-player’s
ball can approach the putting green in as few strokes as possible. We believe our aquatic ranges offer our customers a dynamic experience
distinct from traditional golf ranges due to the fact that our ranges require golfers to rent and drive a particular type of golf ball
into a large body of water such as a lake or pond. To enjoy a successful aquatic driving range experience, customers often rent special
types of floater range balls that are preferred when golfing at our unique ranges. We believe floater range balls are approximately 5%
lighter to allow for flotation and are unlike traditional golf balls. We believe renting the aquatic balls to our customers is advantageous
to our operations because they allow our golf country clubs to reuse the floater range balls at a higher rate than traditional golf balls
and without high operational intensity. This is because, after a floater range ball is driven by a customer into the waterway, that ball
is retrieved by club operations and reused with minimal effort as compared with those typically required to retrieve traditional golf
balls from an extensive grass-based driving range.
6
As
of the date of this Annual Report, we sell our floater range balls at $9 per bucket to our customers. Part of our daily operations includes
the retrieval and replenishment of floater range balls to limit inventory turnover and keep operations at our ranges running smoothly.
Retail
Golf Products and Equipment and Facilities Rental
Pro
shops. We maintain pro shops at both of our golf country clubs, which offer golf apparel, equipment, and information about our golf-courses.
Our pro shops include unique retail options such as golf balls, golf-gloves, logoed hats and polos. At our pro shops, we only sell golf
clubs on a prepaid custom-order-basis, which avoids our need to maintain a large inventory and prevents long turnovers of ordered equipment.
Golf
product rental. We maintain multiple sets of new or gently used golf country clubs on premises for guest rental purposes. We annually
purchase and replenish eight to ten sets of new Wilson Sporting Goods branded golf clubs to rent out to our Kissimmee Bay guests. Annually,
any golf clubs over a year in age are transferred to Remington for customer rentals. Our annual replenishment of golf country clubs is
designed to provide new clubs for rentals at both of our golf facilities. We believe new golf clubs retain higher golf club rental rates
and provide customers with a better golfing experience in order to generate reasonable returns for each golf club rental.
Golf
cart rental. As of the date of this Annual Report, we lease approximately 76 golf carts from Yamaha Golf-Car Company (“Yamaha”)
at each golf-course in January 2020. Historically, we have renewed our Yamaha leases every four years. However, in 2023 and due to Yamaha’s
supply chain issues, our current golf cart leases have gone beyond four years. In the third quarter of 2024, we renewed our golf cart
leases with Yamaha. Golf cart rentals are included in the price of green fees, and we believe including the golf carts with each round
of golf provides our customers with a comfortable and enjoyable experience. We believe the use of golf carts at our golf country clubs
allows our customers to swiftly and easily travel between the eighteen holes at each of our golf-courses without delaying or interfering
with other customers use of the same golf-course.
Membership
Dues
We
provide club memberships to a group of legacy members who are part of the Association pursuant to the CCR who enjoy the lifestyle of
patronizing Kissimmee Bay and Remington year-round. As part of that membership, our members pay an annual fee and in return have the
ability to play unlimited rounds of golf at Kissimmee Bay and Remington throughout the year. Members also enjoy select discounts at Kissimmee
Bay and Remington. Our overall revenue and future growth does not heavily rely on our members because we do not advertise our two membership
programs at Kissimmee Bay and Remington. We believe more tee times for daily golfers will be freed up, particularly during peak seasons
by not widely advertising our memberships.
We believe we have a
great relationship with all of our members and in turn our members provide stable recurring revenue throughout the year. As of the date
of this Annual Report, Kissimmee Bay had approximately 100 memberships and Remington had approximately 30 memberships .
For the years ended December 31, 2024, and December
31, 2023, membership dues totaled $303,541 and $168,723, respectively each of which represented approximately 9% and 5% of our total
revenues.
7
Food
and Beverage Services
Our
food and beverage services provide what we believe to be high-quality, freshly prepared food, snacks, and non-alcoholic and alcoholic
beverages to our customer base. As of the date of this Annual Report, both of our golf country clubs maintain liquor licenses issued
by the state of Florida. Our chef, Michael Meaux, brings over ten years of culinary experience from a local restaurant close to Kissimmee
Bay. At Kissimmee Bay, Mr. Meaux prepares freshly made menu items, ensuring our patrons enjoy a variety of food options. We receive fresh
food materials from our vendors every week, which we believe ensures a consistent supply of ingredients. Bars at both clubhouses are
a popular attraction, especially for those golfers looking to relax during their visit. Our bars serve as a central gathering place for
members, golfers, and their guests. Additionally, we organize weekly evening residential events at both of our golf country clubs to
provide members with special offerings and community benefits.
Golfers
on our courses make up our primary customer base for food and beverages, who are often looking for a convenient meal after a round of
golf. Alternatively, those interested in hospitality in our leisurely clubhouses also frequent our clubhouse restaurant. Food and beverage
services are a highly profitable area for our operations, and we believe that by continually improving our menu and food quality while
minimizing waste, we can maximize food and beverage sales. We aim to achieve a net margin of approximately 20% in our food and beverage
services and believe this goal is particularly attainable at Kissimmee Bay because we offer daily lunch services with a focus on
popular comfort food items prepared on-site by Chef Michael Meaux. Similarly, we believe our clubhouse bars offer hubs for socializing
while our experienced bartenders foster a friendly and engaging atmosphere. We do not permit any of our customers to bring any outside
alcoholic beverages onto either of our properties.
We
also maintain beverage carts at each golf-club, which are operational on a seasonal basis. For example, our beverage carts are in operation
every day during peak season. In shoulder seasons, they operate on weekends. In slower seasons, they operate upon request, typically
for large tournaments or outings. Remington similarly offers hot and cold food along with drinks at the clubhouse bar.
For the fiscal
years ended December 31, 2023 and 2024, food and beverage revenue increased from $682,281 to $648,738 or 5%, which accounts for
approximate 19% and 20% of our total revenue, respectively.
Ancillary
Services and Amenities
Outside
of golfing, both of our golf country clubs provide a variety of additional amenities and services that we believe appeal to families
and individual customers alike, such as well-appointed clubhouses, a variety of dining options, event and meeting spaces and outdoor
gathering spaces. We believe our golf country clubs have quality facilities, a breadth of amenities and the ability to host several relevant
functions and events.
Kissimmee
Bay and Remington each have their own clubhouse, featuring a pro-shop, kitchen, bar, and dining area. At Kissimmee Bay, the kitchen and
bar areas are larger than Remington and includes a dividable banquet room with a maximum capacity of 200 persons. This banquet room can
be split into two smaller event spaces, allowing for simultaneous events. This banquet room is a rentable space for private events and
related event services. We believe this strategic service offering capitalizes on the club’s scenic landscapes and spacious ballroom,
which has rapidly gained popularity among couples seeking an extraordinary and scenic wedding experience. Our club offers a number of
pre-planned and flexible packages, catering to the individual needs of each client to create a custom event. This ancillary service not
only diversifies our revenue streams but positions us as a competitive operator in what we believe to be a lucrative event and wedding
industry within the greater Orlando, Florida region. Remington’s clubhouse is smaller in comparison, but despite its size, it has
a fully functional kitchen with a walk-in cooler and freezer.
We
also annually host dozens of tournaments and outings at our golf country clubs under which we charge by the person for use of our golf-courses
and driving range, if requested. We also charge an outside food service fee for those events where outside food is typically brought
in, as well as other service-related fees associated with room rentals at our facilities. Customers that host events at our golf country
clubs range from corporations to non-profits or local chapters of social clubs. As part of any tournament or outing, we provide the event
with golf-club bag drop services, scorecards and placards with hole assignments for all participants included with the rented golf-carts.
In order to provide stability for tournaments and outings, we require prospective events to pay at least two weeks ahead of the event.
Moreover, if events are cancelled within ninety days of the event date, we require fifty percent of the event costs to be paid to make-up
for any anticipated losses our golf country clubs may experience due to such cancellation.
8
Competition
Our
Company competes in a sporting and leisure-based industry tied to consumer discretionary spending. We believe that we compete for these
discretionary consumer dollars against such businesses as amusement parks, spectator sports, ski and mountain resorts, fitness and recreational
sports centers, gaming and casinos, hotels and restaurants. We believe most of our competition is regionally or locally based and the
level of competition for both of our golf country clubs depends on their golf facilities, location and proximity relative to the location
of our customers. We believe competitors of ours include six well-known public golf-courses within a two-hour drive from our golf-courses
and that many of these local competitors have clubhouses with large banquet rooms and modern greens, with most of them being constructed
approximately a decade ago. One of these six competitors include our closest competitor Royal St. Cloud Golf Links which is approximately
a 20-minute drive from both of our golf country clubs. The remaining five competing golf country clubs include the Ritz-Carlton Orlando
Grande Lakes, Disney’s Magnolia Golf Course, Shingle Creek Golf Club, Waldorf Astoria Golf Club – Signia, and Celebration
Golf Club.
We
believe the golf country club industry in United States is competitive with than more 16,000 clubs in United States in 2022. We believe
that competition among golf country clubs can be fierce, as they strive to attract and retain members in the area around each golf-club’s
location, course quality, facilities and amenities, membership structure and fees, member services and experience, marketing and branding.
We believe there were more than 1,200 golf-courses in Florida, which collectively host more than 48 million rounds on a yearly basis
in 2022.
To
stay competitive, we have made significant improvements at Kissimmee Bay, upgrading its greens to the newest Champion G12 greens in 2017
and contracting DTE for golf-course maintenance. As a result, Kissimmee Bay’s golf-course condition has noticeably improved in
recent years. However, our clubhouse, including the banquet room and parking lot, requires substantial upgrades to align with the quality
of our golf-course and provide a consistent experience to our customers. Once these upgrades are completed, we believe we will be better
positioned to compete with our competitors, especially given our affordable pricing.
At
Remington, the greens have never been upgraded and are susceptible to diseases and mutations due to their age. To remain competitive
in the greater Orlando region, we overseed our greens during peak golf season. Seeding involves applying new grass seeds on our greens
to cover any dormant Bermuda greens on our golf-courses. We believe this seeding process nourishes our greens in order to maintain their
condition for golfers. Additionally, we keep our green fees relatively competitive to the market for example,:
Our
structured green fees for the end of the shoulder season during early to mid-January 2024 * was as follows:
Golf-Club
Weekday
Morning
Prime
Afternoon
Twilight
Late
Afternoon
Kissimmee Bay
$ 69.95
$ 39.95
$ 29.95
$ 24.95
Remington
$ 54.95
$ 39.95
$ 29.95
$ 24.95
Golf-Club
Weekend
Morning
Prime
Afternoon
Twilight
Late
Afternoon
Kissimmee Bay
$ 84.95
$ 39.95
$ 29.95
$ 24.95
Remington
$ 64.95
$ 39.95
$ 29.95
$ 24.95
Our
structured green fees for the peak season during mid-January through April 2024 * was as follows:
Golf-Club
Weekday
Morning
Prime
Afternoon
Twilight
Late
Afternoon
Kissimmee Bay
$ 84.95
$ 59.95
$ 34.95
$ 24.95
Remington
$ 74.95
$ 49.95
$ 34.95
$ 24.95
9
Golf-Club
Weekend
Morning
Prime
Afternoon
Twilight
Late
Afternoon
Kissimmee Bay
$ 84.95
$ 59.95
$ 34.95
$ 24.95
Remington
$ 74.95
$ 49.95
$ 34.95
$ 24.95
*
Rates
are subject to change due to market conditions and competitor rates during each period stated above.
We
upgraded the greens in both Remington and Kissimmee Bay in the third quarter of 2024 because we believe this improvement will attract
more golfers and make their golfing experience more enjoyable. While Remington’s clubhouse layout may not accommodate large banquet
events, we believe improving the golf-course conditions may lead to an increase in our daily golfers and seasonal tournaments.
We
recognize the competitive landscape of the golf industry in the greater Orlando region and plan to take steps to enhance the aesthetics
and function of both our golf-courses and facilities to remain competitive in our local market because we believe it will attract a broader
customer base.
Sales
and Marketing
We
promote our golf country clubs through marketing and partnerships with tee-time booking platforms that are designed to appeal to our
existing members and prospective members. We primarily use digital media marketing channels including social media and digital advertising
services where we purchase and boost certain of our digital advertisements on social media platforms, such as Facebook to drive traffic
to our well-designed websites or tee-time booking partners. Boosting our digital advertisements promotes visibility of our digital advertising
which we believe drives internet engagement to our websites. Additionally, we strategically engage Google Ads Services during certain
periods during each golf-season and believe both Kissimmee Bay and Remington have achieved high rankings on Google searches generally
related to “Kissimmee” and “golf”. Moreover, during past peak seasons, we purchased additional Google keyword
search advertisements to maintain our visibility and prevent competitors from securing top positions in search results for similar search
terms.
In
addition to traditional digital marketing, we partner with one of the preeminent tee-time booking platforms GolfNow.com, managed by GolfNow
Inc., (“GolfNow”). GolfNow maintains an online reservations and revenue management platform featuring our golf-courses among
others. In fact, we believe GolfNow’s booking and search engine is a dominant platform in the Florida golf market, making it easy
for golfers to find our golf country clubs and book tee times at our golf-courses through GolfNow mobile App. GolfNow also provides our
management with operational dashboards, email databases of our customers, and reports regarding the status of tee times at our golf country
clubs. We believe we are able to leverage this insight to increase retail bookings and revenue through the insight GolfNow provides.
Not only can we easily track tee times and improve any ongoing deals to our golfing clientele, we are also able to make promotional announcements
to GolfNow’s email listserv once a month. With this insight, we have collaborated with GolfNow to advertise three barter tee times
on the GolfNow platform daily. GolfNow sells these barter tee times at prices lower than our publicly published rates.
Other
of our marketing partners include two golf wholesale vendors, Tee Times USA and Golfpac Travel. We have partnered with these wholesale
vendors in order to attract a significant percentage of golfers during our peak season. Both wholesale vendors have circulated promotion
emails to their large customer-base around the country and advertised our golf-courses on their social media platforms.
Seasonality
Our
golf country clubs operations are seasonal in nature and we anticipate that our golf country clubs will experience annual seasonality.
Due to the warm weather in Florida, our peak season begins in the first quarter, starting in January and running through mid-April. Our
shoulder seasons include the second and fourth quarters. We historically see that our revenue significantly declines during the third
quarter because of the humid and hot weather in Florida. However, during our peak season, we typically host over 200 golfers per day
every day for approximate 90 days in a row. During the peak season, both international and national tourists visit Florida for a golfing
vacation.
10
After
our peak season, golfing tourism noticeably slows however, our membership dues provide revenue that is historically less affected by
seasonality than our green fees from those non-member golfers. We believe non-member local golfers are more particular than tourists
about which times of the year they will- or will not-golf. To that end, keeping our golf-courses in good condition during both peak and
non-peak season is key to attracting and engaging local patrons so they may view our golf country clubs favorably and become repeat customers
at our golf-courses. As a result of these factors, we anticipate we will annually generate a disproportionate share of our revenues and
cash flows in the peak season of each year or during quarter one and have lower revenues and profits in Central Florida’s warmer
months such as during the third quarter.
Regulations
General.
The Company is subject to the Fair Labor Standards Act and various state laws governing such matters as minimum wage requirements,
overtime and other working conditions and citizenship requirements. Some of the Company’s resort and golf-course employees may
receive the federal minimum wage and any increase in the federal minimum wage would increase the Company’s labor costs.
Our
Company is subject to numerous federal, state and local governmental regulations, including those relating to the preparation and sale
of food and alcoholic beverages, sanitation, public health, fire codes, seating capacity, and building requirements. Each of our golf-course
clubhouses requires appropriate licenses from regulatory authorities allowing it to sell liquor, beer and wine, and each clubhouse requires
food service licenses from local health authorities. Our licenses to sell alcoholic beverages must be renewed annually and may be suspended
or revoked at any time for cause, including violation by us or our employees of any law or regulation pertaining to alcoholic beverage
control, such as those regulating the minimum age of employees or patrons who may serve or be served alcoholic beverages, the serving
of alcoholic beverages to visibly intoxicated patrons, advertising, wholesale purchasing and inventory control. The failure of a restaurant
to retain liquor or food service licenses could have a material adverse effect on operations. In addition, the Company is subject to
certain state “dram-shop” laws, which provide a person injured by an intoxicated individual the right to recover damages
from an establishment that wrongfully served alcoholic beverages to the intoxicated individual.
The
Company is also subject to the Americans with Disabilities Act of 1990, the Equal Employment Opportunity Act and the Age Discrimination
in Employment Act and similar state laws. The Company believes it is operating in substantial compliance with applicable laws and regulations
governing its operations. We are also subject to regulation by the United States Occupational Safety and Health Administration and similar
health and safety laws in Florida. These regulations impact a number of aspects of operations, including golf-course maintenance and
food handling and preparation. Our facilities, website and operations are subject to the Americans with Disabilities Act (the “ADA”).
The rules implementing the ADA have been further revised by the ADA Amendments Act of 2008, which included additional compliance requirements
for golf facilities and recreational areas. The ADA generally requires that we remove architectural barriers when readily achievable
so that our facilities are made accessible to people with disabilities. Noncompliance could result in imposition of fines or an award
of damages to private litigants. Federal legislation or regulations may further amend the ADA to impose more stringent requirements with
which we would have to comply.
Homeowners’
Association . Our properties are subject to the rules and CCR of the Association which consist of various restrictions or guidelines
regarding use and maintenance of the property, including, among others, easements, rights-of-way, restrictions, Association assessments
and similar charges or encumbrances that do not materially interfere with the ordinary course of business of the Company or any of its
Subsidiaries.
Environmental,
Health and Safety. Our facilities and operations are subject to a number of environmental laws. As a result, we may be required to
incur costs to comply with the requirements of these laws, such as those relating to water resources—including the health of ponds
and littoral shelves on our properties, discharges to air, water and land, the use and storage of various hazardous materials such as
herbicides, pesticides, fertilizers, batteries, solvents, motor oil and gasoline, handling and disposal of solid and hazardous waste,
and the cleanup of properties affected by regulated materials. Under these and other environmental requirements, we may be required to
investigate and clean up hazardous or toxic substances or chemical releases from operated facilities. Our facilities are also subject
to inspection by the South Florida Water Management District (“SFWMD”), a regional governmental district that oversees water
resources in sixteen counties in Central and South Florida. The SFWMD works to improve the Kissimmee River and its floodplain, Lake Okeechobee
and South Florida’s coastal estuaries where our properties are located. The SFWMD has made recommendations to our Company to improve
the overall health of the littoral shelves on our properties, such as recommending we plant additional native aquatic plants around our
ponds and lakes. These planting recommendations are subject to a “Permit Mitigation Plan” the SFWD has prescribed for Osceola
County, Florida—where our properties are situated. Pursuant to that Permit Mitigation Plan it is also recommended we remove any
unwanted invasive plants that can cause concerns to nearby homeowners and to the overall health of littoral shelves on our properties.
The planting is intended to help control water flow during rain events on our property as to assist with treatment of the waters flowing
into the nearby waterways before discharging into those waterways. We continue to review the SFWMD’s Permit Mitigation Plan as
guidance and plant native aquatic plants accordingly with the recommendations stated therein.
11
Environmental
laws typically impose cleanup responsibility and liability without regard to whether the relevant entity knew of or caused the presence
of the contaminants. We use certain substances and generate certain wastes that may be deemed hazardous or toxic under such laws, and
under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for
the costs of removing hazardous substances that are released on or in its property and for remediation of its property. Such laws often
impose liability regardless of whether a property owner or operator knew of, or was responsible for, the release of hazardous materials.
In addition, the failure to remediate contamination at a property may adversely affect the ability of a property owner to sell such real
estate or to pledge such property as collateral for a loan. The Company believes that it is in compliance in all material respects with
applicable federal, state and local environmental laws and regulations and may from time to time in the future incur, costs related to
cleaning up contamination or hazardous materials resulting from historical uses of certain of our current or former properties or our
treatment, storage or disposal of wastes or hazardous materials at Company facilities. Our facilities are also subject to risks associated
with mold, asbestos and other indoor building contaminants. The costs of investigation, remediation or removal of regulated materials
may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to
use, transfer or obtain financing for our property. We may be required to incur costs to remediate potential environmental hazards, mitigate
environmental risks in the future, or comply with other environmental requirements.
Zoning
and Land Use. The ownership and operation of our facilities, as well as our re-development and expansion of clubs, subjects us to
federal, state and local laws regulating zoning, land development, land use, building design and construction, and other real estate-related
laws and regulations.
Other.
We are also subject to various local, state and federal laws, regulations and administrative practices affecting our business. As
of the date of this Annual Report, we believe we are in compliance with provisions regulating environmental protection, water usage,
health and safety standards, equal employment, minimum wages, and licensing requirements and regulations for the sale of food and alcoholic
beverages and clubhouses .
Our
Employees
As
of the date hereof, we had approximately 47 employees, all of whom are full-time employees. Our employees are non-unionized.
We believe we have a good working relationship with our employees and have yet to experience an interruption of business as a result
of labor disputes.
The
following table sets forth the breakdown of our employees by function as of the date of this Annual Report:
Functional Area
Number
of Employees (1)
Pro Shop
5
Golf Operations
27
Food and Beverage
15
Total
47
(1)
This
figure does not include our approximately thirteen independently contracted employees of SSS Down to Earth Opco, LLC, as of the date
of this Annual Report.
12
Description
of Property
Our
principal premises are located at 2995 Remington Blvd. Kissimmee, FL 34744. We own the underlying real estate for both of our golf country
clubs consisting of over 289 acres of fee simple real estate.
As
of the date of this Annual Report, we believe our corporate office space at Remington Golf Club is well maintained and occupies sufficient
space to meet our operating needs.
The
following tables illustrate our golf country clubs by segment, location, type of club, and size in terms of golf holes.
Golf Country Clubs Segment by Region
Type of Club
Market
State
Golf
Holes
Kissimmee Bay Country Club
Public Golf Country Club
Kissimmee
FL
18
Remington Golf Club
Public Golf Country Club
Kissimmee
FL
18
Insurance
We
believe that our properties are covered by adequate property, casualty and commercial liability insurance with what we believe are commercially
reasonable deductibles and limits for our industry. In addition, although we carry flood insurance on our properties in an amount and
with deductibles that we believe are commercially reasonable, such policies are subject to limitations in certain active flood zones.
Certain of the properties in our portfolio are located in areas known to be active flood zones. See “Risk Factors-Risks Related
to Our Business and Operations-The level of insurance coverage that we purchases may prove to be inadequate”. Changes in the insurance
market over the past few years have increased the risk that affordable insurance may not be available to us in the future. While we believe
that our insurance coverage is adequate, if we were held liable for amounts and claims exceeding the limits of our insurance coverage
or outside the scope of our insurance coverage, our business, results of operations and financial condition could be materially and adversely
affected.
Intellectual
Property
We
are committed to protecting our intellectual property and, where appropriate, filing trademark applications to protect our brand. Since
our establishment, we have focused on building an established brand for our golf-courses to achieve brand recognition and to increase
our market share. We believe that increased brand awareness will increase our sales margins and improve customer loyalty. We have consistently
marketed our golf-courses under the “Kissimmee Bay Country Club” and “Remington Golf Club” brands. While there
can be no assurance that we can successfully register or maintain ownership for trademarks under those names, we are not currently aware
of any facts that would negatively impact our continuing use of any of the foregoing tradenames.
We
rely on trademarks and registered domains to protect our intellectual property rights and as of the date of this Annual Report, we have
one registered United States trademark and four United States trademark applications pending with the United States Patent and Trademark
Office (“USPTO”), and ten registered domain names. As of the date of this Annual Report, each of the Company’s trademark
applications have been preliminary approved by the USPTO and are in the publication period, pending third party opposition. As of the
date of this Annual Report, we are not aware of any oppositions filed against our proposed trademarks.
13
Trademarks
We
own the following United States trademarks as of the registration dates noted below:
No.
Trademark
Owner
Country
Serial
Number(s)
Class(es)
Application
Date(s)
Registration
Number(s)
Registration
Date
1.
Kissimmee
Bay Country Club
FSC
Clearwater LLC
United
States
98310045,
98310046
(i)
International Class 041 : Country clubs; Entertainment in the nature of golf outings
and golf tournaments; Golf club services; Golf courses; Golf fitness instruction; Golf instruction;
Organization of golf tournaments;
Providing
golf facilities
International
(ii)
Class 043 : Providing social meeting, banquet and social function facilities; Rental of banquet and social function facilities
for special occasions, namely, weddings, corporate events, and parties;
Restaurant
services
12/12/2023
7649004
1/14/2025
2.
Remington
Golf Club
FSC
Clearwater II LLC
United
States
98326337,
98348963
International
Class 041 : Country clubs; Entertainment in the nature of golf outings and golf tournaments;
Golf club services; Golf courses; Golf fitness instruction; Golf instruction; Organization
of golf tournaments;
Providing
golf facilities
International.
12/21/2023,
1/09/2024
7606737
12/17/2024
14
Domain
names.
We
have registered and have the right to use the domain names listed below in the United States. We believe these domains allow golfers
to easily find us on internet search engines and any other tee-time booking platforms. Domain names are generally renewable every year
or every two years upon expiring.
Number
Issue
Date
Expiration
Date
Registration
Agency
Domain
Name
Owner
1
10/23/2023
10/23/2026
GoDaddy
Operating Company, LLC.
aureusgreenway.com
Aureus
Greenway
2
8/10/2022
8/10/2027
GoDaddy
Operating Company, LLC.
golf-kissimmee.com
Aureus
Greenway
3
4/22/2021
4/22/2026
GoDaddy
Operating Company, LLC.
golfkissimmeebay.com
Aureus
Greenway
4
4/22/2021
4/22/2026
GoDaddy
Operating Company, LLC.
golfremington.com
Aureus
Greenway
5
1/29/2023
1/29/2026
GoDaddy
Operating Company, LLC.
kissimmee-golf.com
Aureus
Greenway
6
11/5/2015
11/5/2025
GoDaddy
Operating Company, LLC.
kissimmeebay.golf
Aureus
Greenway
7
9/3/2009
9/3/2025
GoDaddy
Operating Company, LLC.
playgolfinkissimmee.com
Aureus
Greenway
8
4/28/2017
4/29/2025
GoDaddy
Operating Company, LLC.
playgolfinremington.com
Aureus
Greenway
9
2/3/2018
2/3/2026
GoDaddy
Operating Company, LLC.
playgolfremington.com
Aureus
Greenway
10
11/5/2015
11/5/2025
GoDaddy
Operating Company, LLC.
Remington.golf
Aureus
Greenway