Fitness Champs(FCHL) - 2024 Q4 - Annual Report

FORM 20-F Filing Information Provides general filing details for Fitness Champs Holdings Limited's Annual Report on Form 20-F for the fiscal year ended December 31, 2024 General Information Details Fitness Champs Holdings Limited's Form 20-F filing, status as a non-accelerated, emerging growth company, and U.S. GAAP compliance - Registrant: Fitness Champs Holdings Limited, incorporated in the Cayman Islands[3] - Filing Type: Annual Report on Form 20-F for the fiscal year ended December 31, 2024[2] Key Filer Information | Metric | Value | | :-------------------------- | :----------------------------------- | | Outstanding Ordinary Shares (Dec 31, 2023) | 15,000,000 shares | | Filer Status | Non-accelerated filer, Emerging growth company | | Accounting Standard | U.S. GAAP | Explanatory Note Clarifies the Form 20-F filing furnishes certified financial statements for FY2024, as required by Rule 15d-2 - Purpose: Filing certified financial statements for the fiscal year ended December 31, 2024[23] - Reason: Form F-1 Registration Statement did not contain certified financial statements for the last fiscal year[23] - Requirement: Mandated by Rule 15d-2 under the Securities Exchange Act of 1934[22] Financial Statements Presents the audited consolidated financial statements, including balance sheets, income statements, equity changes, and cash flows, for Fitness Champs Holdings Limited Report of Independent Registered Public Accounting Firm Onestop Assurance PAC issued an unqualified opinion on the consolidated financial statements for the three-year period ended December 31, 2024, conforming to U.S. GAAP - Auditor: Onestop Assurance PAC (PCAOB ID 6732)[26][30] - Opinion: Unqualified opinion, stating financial statements present fairly in all material respects, in conformity with U.S. GAAP[26] - Audit Period: Consolidated financial statements for the three-year period ended December 31, 2024[26] Consolidated Balance Sheets Total assets and liabilities significantly increased from 2023 to 2024, driven by prepayments and director loans, leading to a sharp decrease in shareholders' equity Consolidated Balance Sheet Highlights (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | Change (S$'000) | Change (%) | | :------------------------------------ | :----------- | :----------- | :-------------- | :--------- | | Total Assets | 1,619 | 2,364 | 745 | 46.0% | | Total Liabilities | 1,476 | 2,349 | 873 | 59.1% | | Total Shareholders' Equity | 143 | 15 | (128) | -89.5% | | Cash and cash equivalents | 815 | 314 | (501) | -61.5% | | Deposits, prepayments and other receivables | 132 | 1,371 | 1,239 | 938.6% | | Amount due to director | - | 1,129 | 1,129 | N/A | - Total assets increased by 46.0% to S$2,364,000 in 2024, while total liabilities increased by 59.1% to S$2,349,000, largely due to a new S$1,129,000 amount due to director[32] - Shareholders' equity decreased significantly by 89.5% from S$143,000 to S$15,000 in 2024[32] Consolidated Statements of Income and Comprehensive Income Revenues decreased by 9.3% in 2024, while operating expenses rose 88.3%, leading to a 96.2% drop in operating profit and an 84.6% decline in net income Consolidated Income Statement Highlights (S$'000) | Metric | 2022 | 2023 | 2024 | YoY Change (2023-2024) | YoY Change (%) (2023-2024) | | :-------------------------- | :--- | :--- | :--- | :--------------------- | :-------------------------- | | Revenues | 2,764 | 4,650 | 4,216 | (434) | -9.3% | | Cost of revenue | (1,570) | (2,660) | (2,694) | (34) | 1.3% | | Gross profit | 1,194 | 1,990 | 1,522 | (468) | -23.5% | | Total operating expenses | (440) | (784) | (1,476) | (692) | 88.3% | | Profit from operations | 754 | 1,206 | 46 | (1,160) | -96.2% | | NET INCOME | 663 | 1,118 | 172 | (946) | -84.6% | - Revenues decreased by 9.3% from S$4,650,000 to S$4,216,000 in 2024[34] - Net income saw a substantial decrease of 84.6%, falling from S$1,118,000 to S$172,000 in 2024[34] Consolidated Statements of Changes in Shareholders' Equity Retained earnings and total shareholders' equity significantly declined in 2024, primarily due to S$300,000 in dividend payouts exceeding net income Shareholders' Equity Summary (S$'000) | Metric | Jan 1, 2022 | Dec 31, 2022 | Dec 31, 2023 | Dec 31, 2024 | | :-------------------------- | :---------- | :----------- | :----------- | :----------- | | Retained earnings (start) | 1,036 | 1,036 | 250 | 132 | | Dividends | (1,449) | (1,449) | (1,236) | (300) | | Net income for the year | 663 | 663 | 1,118 | 172 | | Retained earnings (end) | 1,036 | 250 | 132 | 4 | | Total Shareholders' equity (end) | 1,036 | 261 | 143 | 15 | - Retained earnings decreased from S$132,000 to S$4,000 at December 31, 2024[36] - Total shareholders' equity declined from S$143,000 to S$15,000 in 2024, reflecting the impact of dividends paid and net income[36] Consolidated Statements of Cash Flows Net cash from operating activities significantly decreased in 2024, leading to a net decrease in cash and cash equivalents, with substantial financing activities related to director loans and share issuance costs Consolidated Cash Flow Highlights (S$'000) | Metric | 2022 | 2023 | 2024 | YoY Change (2023-2024) | | :-------------------------------- | :--- | :--- | :--- | :--------------------- | | Net cash provided by operating activities | 1,237 | 1,296 | 82 | (1,214) | | Net cash provided by (used in) investing activities | 396 | (608) | (86) | 522 | | Net cash used in financing activities | (1,379) | (377) | (497) | (120) | | Net change in cash and cash equivalents | 254 | 311 | (501) | (812) | | Cash and cash equivalents, END OF YEAR | 504 | 815 | 314 | (501) | - Net cash provided by operating activities decreased by S$1,214,000, from S$1,296,000 to S$82,000 in 2024[38] - Cash and cash equivalents at year-end decreased by S$501,000 to S$314,000 in 2024[38] - Financing activities in 2024 included S$1,129,000 from 'Amount due from (to) director' and S$1,154,000 in payments for share issuance transaction costs[38] Notes to Consolidated Financial Statements Details the company's business, significant accounting policies, revenue disaggregation, and specific financial statement line items, along with risk concentrations and subsequent events NOTE 1 - BUSINESS OVERVIEW AND BASIS OF PRESENTATION Outlines corporate structure, primary business as a Singaporean swimming education provider, June 2024 reorganization, and addresses going concern status with mitigation plans Company Structure and Operations Details Fitness Champs Holdings Limited's role as an investment holding company operating through Singaporean subsidiaries in sports education - Fitness Champs Holdings Limited (Cayman Islands) is an investment holding company[39] - Primary operations are conducted through Singaporean subsidiaries, Fitness Champs Pte. Ltd. and Fitness Champs Aquatics Pte. Ltd.[39] - Business: Leading sports education provider in Singapore, specializing in swimming programs for private and public sectors[40] Reorganization Describes the internal group reorganization in June 2024, consolidating ownership under Fitness Champs Holdings Limited and its retrospective accounting treatment - Internal group reorganization occurred on June 19, 2024, consolidating ownership under Fitness Champs Holdings Limited[41][42][45] - Ms. Lee transferred shareholdings in Fitness Champs Pte Ltd and Fitness Aquatics Pte Ltd to Northen Star Limited, and then Northen Star shares to Fitness Champs Holdings Limited[41][42][46] - Accounting Treatment: Considered a merger of entities under common control, requiring retrospective combination of financial statements for all periods presented[47] Going concern Addresses substantial doubt about the Company's going concern status due to negative operating cash flow and net current liabilities, outlining management's mitigation plans - Substantial doubt about the Company's ability to continue as a going concern due to negative operating cash flow and net current liability position as of December 31, 2024[50] - Management's plan includes ongoing support from the director, potential equity financing, cost management, and revenue improvement initiatives[50][54] NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Details significant accounting policies, including U.S. GAAP, consolidation, foreign currency, asset/liability recognition, revenue, expenses, and recently issued accounting pronouncements Basis of Presentation States that consolidated financial statements are prepared in accordance with U.S. GAAP and SEC regulations - Consolidated financial statements prepared in accordance with U.S. GAAP and SEC regulations[51] Use of Estimates and Assumptions Highlights significant accounting estimates and assumptions used, including allowance for doubtful accounts and asset impairment - Significant accounting estimates include allowance for doubtful accounts, useful lives for property, plant and equipment, and assumptions in assessing right-of-use assets and impairment of long-lived assets[51] Basis of Consolidation Explains that consolidated financial statements include the Company and its subsidiaries, with inter-company transactions eliminated and common control entities retrospectively combined - Consolidated financial statements include the Company and its subsidiaries, with all significant inter-company balances and transactions eliminated[52] - Transactions between entities under common control are treated as capital transactions, with retrospective combination for all periods presented[53][55] Foreign Currency Translation and Transaction States the functional and reporting currency is the Singapore Dollar (S$), with a convenience translation rate to US$ as of December 31, 2024 - Functional and reporting currency is the Singapore Dollar (S$)[57] - Convenience translation of S$ into US$ as of December 31, 2024, was calculated at the rate of US$1.00 = S$1.3662[59] Cash and Cash Equivalents Defines cash and cash equivalents as highly liquid investments readily convertible to cash, maturing within three months or less - Consist of highly liquid investments readily convertible to cash, maturing within three months or less from purchase date[60] Accounts Receivable Accounts receivable are recorded at invoiced amounts without interest, and no allowance for doubtful accounts was recognized for the years presented - Recorded at invoiced amount and do not bear interest[62] - No allowance for doubtful accounts or credit losses recognized at December 31, 2022, 2023, and 2024[65] Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, with depreciation calculated on a straight-line basis over estimated useful lives - Stated at cost less accumulated depreciation and impairment losses[65] - Depreciation is calculated on a straight-line basis over estimated useful lives (e.g., Computer & software: 3 years, Renovations: 5 years)[65] Intangible Assets Intangible assets are amortized over their estimated economic lives, with software amortized over 5 years - Amortized over estimated economic lives, with software amortized over 5 years[66][67] Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when circumstances indicate carrying amount may not be recoverable, with impairment measured by the excess of carrying value over fair value - Reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable[68] - Impairment is measured by the amount the carrying value exceeds the fair value of the assets[68] Revenue Recognition Revenue is recognized under ASC 606 when performance obligations are satisfied, primarily from school-based and private swimming lessons (over time) and merchandise sales (point in time) - Revenue is recognized in accordance with ASC 606, when performance obligations are satisfied by transferring control of promised goods or services to the customer[69][70][73] - Main revenue sources: School-based swimming lessons (recognized over time), Private swimming lessons and aquatic sports (recognized over time), and Sales of merchandise (recognized at a point in time)[72][74] Government Grants Government grants are recognized when compliance with conditions and receipt are reasonably assured, or deferred if conditions are not yet fulfilled - Recognized when there is reasonable assurance of compliance with conditions and receipt of the grant[75] - Deferred and recorded under other payables and accrued expenses if conditions are not yet fulfilled[75] Selling and Distribution Selling and distribution expenses include costs related to advertising, promotions, and entertainment - Includes costs of advertising, promotions, and entertainment expenses[76] Comprehensive Income Comprehensive income includes all changes in equity from non-owner sources, such as unrealized gains and losses on foreign currency translation - Includes all changes in equity during a period from non-owner sources, such as changes in unrealized gains and losses on foreign currency translation[77] Income Taxes Income taxes are determined under ASC Topic 740, recognizing deferred tax assets/liabilities for temporary differences, and uncertain tax positions when probable - Determined in accordance with ASC Topic 740, recognizing deferred tax assets and liabilities for temporary differences[78][79] - Uncertain tax positions are recognized when it is more likely than not the position will be sustained upon examination[81] Leases Adopted ASC 842, requiring recognition of right-of-use assets and lease liabilities for leases over twelve months, distinguishing between finance and operating leases - Adopted ASC 842, requiring recognition of right-of-use assets and lease liabilities for leases with terms greater than twelve months[83] - Distinguishes between finance leases and operating leases, affecting measurement and presentation in financial statements[83][84] Retirement Plan Costs Contributions to government-mandated multi-employer defined contribution pension schemes for eligible Singaporean employees are charged to general and administrative expenses - Contributions to government-mandated multi-employer defined contribution pension schemes for eligible Singaporean employees are charged to general and administrative expenses[85] Segment Reporting Follows ASC 280, identifying the CEO as CODM, with two reportable segments: Swim fees and Sales of merchandise - Follows ASC 280, with the Chief Executive Officer identified as the chief operating decision maker (CODM)[86] - The Company has two reportable segments: Swim fees and Sales of merchandise[142] Related Parties Follows ASC 850-10 for identifying and disclosing related party transactions, including affiliates, principal owners, and management - Follows ASC 850-10 for identification and disclosure of related party transactions[87] - Related parties include affiliates, equity method investees, trusts for employees, principal owners, management, and parties with significant influence or control[88] Commitments and Contingencies A liability for contingencies is recognized if a loss is probable and a reasonable estimate can be made - A liability for contingencies is recognized if a loss is probable and a reasonable estimate can be made[89] Earnings per share Basic earnings per share is calculated by dividing net earnings by weighted average ordinary shares outstanding, with no dilutive securities for the years presented - Basic earnings per share is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding[90] - The Company had no dilutive securities for the years ended December 31, 2022, 2023, and 2024[90] Concentration of credit risk Financial instruments consist of cash and accounts receivable with high credit quality institutions, with credit risk monitored on a customer-by-customer basis - Financial instruments consist of cash and cash equivalents and accounts receivable, maintained with high credit quality institutions[92] - Management regularly monitors credit risk on a customer-by-customer basis[93] Interest rate risk Interest rate risk arises from bank borrowings, with rates ranging from 2.5% to 4.82% as of December 31, 2024, managed by varying debt issuance and monitoring market changes - Interest rate risk arises from bank borrowings, managed by varying issuance and maturity dates of variable rate debt and monitoring market changes[94] - Borrowing interest rates ranged from 2.5% to 4.82% as of December 31, 2023, and 2024[94] Liquidity risk Liquidity risk is the inability to meet financial obligations when due, with company policy ensuring sufficient cash under normal and stressed conditions - Liquidity risk is the risk of not being able to meet financial obligations when due[95] - Company policy is to ensure sufficient cash to meet liabilities under normal and stressed conditions[95] Fair value measurement Follows ASC Topic 820-10, establishing a three-tier fair value hierarchy, with short-term financial instruments approximating their fair values - Follows ASC Topic 820-10, establishing a three-tier fair value hierarchy (Level 1, 2, 3)[96][102] - The carrying value of short-term financial instruments (cash, accounts receivable, payables) approximates their fair values[98] Recently Issued Accounting Pronouncements Details recently issued accounting pronouncements, including ASU 2022-03, ASU 2023-07, and ASU 2023-09, and their respective effective dates - ASU 2022-03 (Fair Value Measurement): Clarifies contractual sale restrictions are not part of equity security unit of account; effective for the Company's fiscal year 2025[99] - ASU 2023-07 (Segment Disclosures): Requires disclosure of significant reportable segment expenses and CODM information; effective for annual periods beginning after December 15, 2023[101] - ASU 2023-09 (Income Tax Disclosures): Requires disaggregated effective tax rate reconciliation and income taxes paid; effective for annual periods beginning after December 15, 2025[103] NOTE 3 - DISAGGREGATION OF REVENUE Disaggregates revenue by sector and recognition timing, showing a 9.3% total revenue decrease in 2024, with swim fees remaining the dominant source Revenue by Sector (S$'000) | Sector | 2022 | 2023 | 2024 | YoY Change (2023-2024) | YoY Change (%) (2023-2024) | | :---------------- | :--- | :--- | :--- | :--------------------- | :-------------------------- | | Government sector | 713 | 1,994 | 1,700 | (294) | -14.7% | | Private sector | 2,051 | 2,656 | 2,516 | (140) | -5.3% | | Total | 2,764 | 4,650 | 4,216 | (434) | -9.3% | Revenue by Timing of Recognition (S$'000) | Timing | 2022 | 2023 | 2024 | | :-------------------------------- | :--- | :--- | :--- | | Sales of merchandise (point in time) | - | 4 | 7 | | Swim fees (over time) | 2,764 | 4,646 | 4,209 | | Total | 2,764 | 4,650 | 4,216 | - Total revenue decreased by 9.3% in 2024, with both government and private sector revenues declining[107] NOTE 4 - ACCOUNTS RECEIVABLE Accounts receivable decreased to S$ nil in 2024, with no allowance for doubtful accounts or significant bad debt write-offs, indicating effective credit risk management Accounts Receivable (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :----------------- | :----------- | :----------- | | Accounts receivable | 1 | - | - No allowance for doubtful accounts or credit losses recognized for the years ended December 31, 2022, 2023, and 2024[109] - The Company has not experienced any significant bad debt write-offs of accounts receivable in the past[109] NOTE 5 - DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES Deposits, prepayments, and other receivables significantly increased to S$1,371,000 in 2024, primarily due to a 937.1% rise in prepayments for Public Offering costs Deposits, Prepayments and Other Receivables (S$'000) | Category | 2023 | 2024 | Change (S$'000) | Change (%) | | :-------------------------- | :--- | :--- | :-------------- | :--------- | | Deposits | 7 | 32 | 25 | 357.1% | | Prepayments | 124 | 1,286 | 1,162 | 937.1% | | Other receivables | 1 | 53 | 52 | 5200.0% | | Total | 132 | 1,371 | 1,239 | 938.6% | - The significant increase in prepayments is primarily due to costs incurred directly related to the proposed Public Offering[111] NOTE 6 - PROPERTY AND EQUIPMENT, NET Net property and equipment slightly decreased to S$584,000 in 2024, with a leasehold industrial property generating S$30,000 in rental income and S$48,000 in depreciation expense Property and Equipment, Net (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | | Property and equipment, net | 599 | 584 | - Depreciation expense for the year ended December 31, 2024, was S$48,000[114] - The Company owns a leasehold industrial property (carrying value S$523,000 as of December 31, 2024) which generated S$30,000 in rental income in 2024[113][114] NOTE 7 – INTANGIBLE ASSETS Intangible assets, primarily purchased software, totaled S$58,000 in 2024, net of S$1,000 amortization, with no assets recorded in 2023 Intangible Assets (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :----------------- | :----------- | :----------- | | Intangible assets | - | 58 | | Amortization expense | - | 1 | - Intangible assets in 2024 primarily consist of purchased software[115] NOTE 8 - RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITIES Right-of-use assets and lease liabilities decreased to S$37,000 in 2024, reflecting amortization and a new two-year office lease with a 1-year remaining life and 5.25% borrowing rate Right-of-Use Assets and Lease Liabilities (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | | Right-of-use asset | 72 | 37 | | Lease liabilities | 72 | 37 | - The Company entered a new two-year lease agreement for an office in Singapore on December 8, 2023, with a total rental fee of approximately S$77,000[116] - The weighted average incremental borrowing rate used was 5.25%, and the weighted average remaining life of the lease was 1 year[118] NOTE 9 - ACCOUNTS PAYABLES AND ACCRUED LIABILITIES Total accounts payables and accrued liabilities increased by 12.0% to S$719,000 in 2024, driven by a 600% rise in accrued expenses, despite a 23.8% decrease in deferred revenue Accounts Payables and Accrued Liabilities (S$'000) | Category | 2023 | 2024 | Change (S$'000) | Change (%) | | :-------------------------- | :--- | :--- | :-------------- | :--------- | | Accounts payable | 67 | 79 | 12 | 17.9% | | Other payables | - | 21 | 21 | N/A | | Accrued expenses | 24 | 168 | 144 | 600.0% | | Deposits received | 89 | 99 | 10 | 11.2% | | Deferred revenue | 462 | 352 | (110) | -23.8% | | Total | 642 | 719 | 77 | 12.0% | - Deferred revenue recognized as revenue was S$355,000 in 2023 and S$462,000 in 2024[124] NOTE 10 - BANK BORROWINGS Bank borrowings decreased to S$460,000 in 2024, including a 2.50% unsecured term loan and a 4.82% secured property loan, all personally guaranteed by director Joyce Lee Jue Hui Bank Borrowings (S$'000) | Category | Dec 31, 2023 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | | Term loans (unsecured, 2.50%) | 157 | 53 | | Property loan (secured, 4.82%) | 416 | 407 | | Total | 573 | 460 | - The property loan was used to finance the purchase of a new office[126] - All bank borrowings are guaranteed by a personal guarantee from Joyce Lee Jue Hui, director and shareholder[126] NOTE 11 - AMOUNT DUE TO DIRECTOR Amount due to director Joyce Lee Jue Hui significantly increased to S$1,129,000 in 2024, representing unsecured, interest-free shareholder loans for offering costs, repayable by August 31, 2025 Amount Due to Director (S$'000) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :-------------------- | :----------- | :----------- | | Amount due to director | - | 1,129 | - The amount pertains to shareholder loans provided by Ms. Lee to fund the Company's offering costs[129] - The loans are unsecured, interest-free, and repayable upon the earlier of Nasdaq listing or August 31, 2025[129][130] NOTE 12 - SHAREHOLDERS' EQUITY Details ordinary share structure, subsidiary dividend declarations in 2023-2024, and shareholder rights including voting, dividend, and liquidation, but no subscription or preemptive privileges Ordinary Shares Details the Company's establishment on February 15, 2024, with authorized shares of 500,000,000 ordinary shares at US$0.001 par value - The Company was established on February 15, 2024, with authorized shares of 500,000,000 ordinary shares, par value US$0.001 each[131] Dividends Summarizes dividend declarations by Fitness Champs Pte Ltd and Fitness Champs Aquatics Pte Ltd in 2023 and 2024 Dividends Declared by Subsidiaries (S$'000) | Subsidiary | Declaration Date | Amount (S$'000) | | :-------------------------- | :--------------- | :-------------- | | Fitness Champs Pte Ltd | Dec 31, 2023 | 429 | | Fitness Champs Pte Ltd | May 3, 2024 | 80 | | Fitness Champs Aquatics Pte Ltd | Dec 31, 2023 | 807 | | Fitness Champs Aquatics Pte Ltd | May 3, 2024 | 220 | Rights of Ordinary Shareholders Outlines ordinary shareholders' rights, including voting, dividend, and liquidation, while noting the absence of subscription, redemption, conversion, or preemptive privileges - Voting Rights: Each ordinary share entitles its holder to one vote per share[138] - Dividend Right: Holders are entitled to receive ratably declared dividends[139] - Liquidation Right: Holders share ratably in assets available for distribution after payment of debts and liabilities[140] - Other Matters: No subscription, redemption, conversion, or preemptive rights[141] NOTE 13 - REVENUES BY SEGMENT Reports revenue by segment (Swim fees and Sales of merchandise), with all revenue from Singaporean customers; swim fees decreased by 9.4% in 2024, leading to a 23.5% gross profit drop - Reportable segments are Swim fees and Sales of merchandise[142] - All revenue for the years ended December 31, 2022, 2023, and 2024 was derived from customers located in Singapore[143] Revenue and Gross Profit by Segment (S$'000) | Segment | 2022 Revenue | 2022 Gross Profit | 2023 Revenue | 2023 Gross Profit | 2024 Revenue | 2024 Gross Profit | | :---------------- | :----------- | :---------------- | :----------- | :---------------- | :----------- | :---------------- | | Swim fees | 2,764 | 1,194 | 4,646 | 1,990 | 4,209 | 1,522 | | Sales of merchandise | - | - | 4 | - | 7 | - | | Total | 2,764 | 1,194 | 4,650 | 1,990 | 4,216 | 1,522 | NOTE 14 - INCOME TAX EXPENSE Income tax expense was S$(1,000) in 2024, with Singaporean subsidiaries subject to a 17% corporate tax rate; S$19,000 in cumulative net operating losses had a full valuation allowance Income Tax Expense (S$'000) | Metric | 2022 | 2023 | 2024 | | :-------------------------- | :--- | :--- | :--- | | Current year income tax expense | 136 | 117 | 4 | | Over-provision in prior year | - | - | (5) | | Income tax expense | 136 | 117 | (1) | - Singapore subsidiaries are subject to a corporate tax rate of 17%[148] - As of December 31, 2024, the Company had S$19,000 of cumulative net operating losses in Singapore, with a full valuation allowance provided[149] - No significant unrecognized uncertain tax positions as of December 31, 2023, and 2024[151] NOTE 15 - RELATED PARTY TRANSACTIONS Details significant related party transactions with director Joyce Lee Jue Hui, including a S$1,254,000 loan advance for offering costs in 2024 and cessation of direct coach fee payments Related Party Transactions with Director/Shareholder (S$'000) | Nature of transactions | 2022 | 2023 | 2024 | | :---------------------------------------------------- | :--- | :--- | :----- | | Reimbursement fund for expenses paid on behalf of the Company | 2,778 | 3,898 | 279 | | Coach fee and salary paid on behalf by Joyce Lee Jue Hui | (1,612) | (2,518) | - | | Other expenses paid on behalf by Joyce Lee Jue Hui | (226) | (709) | (279) | | Dividend payout to Joyce Lee Jue Hui | (1,449) | (1,236) | - | | Loan advance to the Company | - | - | (1,254) | | Repayment of loan | - | - | 125 | - In 2024, the Company received a loan advance of S$1,254,000 from the director[153] - The Company ceased the practice of Ms. Lee making direct salary and coach fee payments on its behalf from December 2023[153] - An outstanding amount of S$1,129,000 was due to the director as of December 31, 2024, for funding offering costs, repayable by August 31, 2025[154] NOTE 16 - CONCENTRATIONS OF RISK Addresses concentrations of risk including customers, vendors, credit, interest rate, exchange rate, and liquidity, noting no significant customer/vendor risk, managed credit risk, and ongoing monitoring of financial risks Major customers No significant concentrations of risk from major customers due to fluctuating numbers and minimal individual impact, with no outstanding trade receivables in 2024 - No significant concentrations of risk related to major customers due to fluctuating customer numbers and minimal individual impact[156] - As of December 31, 2024, there were no outstanding trade receivables, compared to S$930 from a single customer in 2023[160][161] Major vendors No extreme disruption is foreseen from individual coaches leaving, due to the Company's network of coaches - No extreme disruption is foreseen from individual coaches leaving, due to the Company's network of coaches[156] Credit risk Credit risk is managed by dealing with creditworthy counterparties and ongoing evaluation, with a default defined by unlikelihood of receipt or payments over 90 days past due - The Company deals with creditworthy counterparties and performs ongoing credit evaluation, generally not requiring collateral[157] - A default event is defined as when internal/external information indicates unlikelihood of receipt, including contractual payments over 90 days past due or interest over 365 days past due[158] Interest rate risk Interest rate risk arises from bank borrowings, with rates ranging from 2.5% to 4.82% as of December 31, 2024, managed by varying debt issuance and monitoring market changes - Interest rate risk arises from bank borrowings, with rates ranging from 2.5% to 4.82% as of December 31, 2023, and 2024[162] - Managed by varying issuance and maturity dates of variable rate debt and continually monitoring market changes[162] Exchange rate risk Fluctuations in the S$ to US$ exchange rate could impact reported profits, as the Company cannot guarantee a steady exchange rate - Fluctuations in the S$ to US$ exchange rate could impact reported profits, as the Company cannot guarantee a steady exchange rate[164] Liquidity risk Liquidity risk is the inability to meet financial obligations when due, with company policy ensuring sufficient cash under normal and stressed conditions - Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due[165] - The Company's policy is to ensure sufficient cash to meet liabilities under both normal and stressed conditions[165] NOTE 17 - COMMITMENTS AND CONTINGENCIES No material commitments or contingencies reported as of December 31, 2023 and 2024, with no known legal proceedings having a material adverse effect - No material commitments or contingencies as of December 31, 2023, and 2024[167] - The Company is not aware of any legal proceedings or claims that would have a material adverse effect on its business, financial condition, operating results, or cash flows[166] NOTE 18 - SUBSEQUENT EVENTS Discloses subsequent shareholder loans from Ms. Lee totaling S$651,000 (US$494,000) for offering costs, with repayment extended to August 31, 2025 - Shareholder loans from Ms. Lee, totaling approximately S$651,000 (US$494,000), were provided to fund the Company's offering costs[169] - The repayment date for these loans has been extended to August 31, 2025[169] Exhibits and Signatures Lists the exhibits filed with the Form 20-F, including certifications, and provides the official signatures for the annual report Exhibit Index Lists documents filed as exhibits to Form 20-F, including CEO/CFO certifications and various XBRL interactive data files - Includes certifications from the Chief Executive Officer and Chief Financial Officer (Rule 13a-14(a) and 18 U.S.C. 1350)[172] - Contains various XBRL Taxonomy Extension Documents (Schema, Calculation, Definition, Label, Presentation) and the Cover Page Interactive Data File[172] Signatures Contains official signatures for the Form 20-F annual report, certifying filing requirements met, signed by CEO Joyce Lee Jue Hui and CFO Teoh Siew Thim on May 14, 2025 - The annual report was signed by Joyce Lee Jue Hui (Chief Executive Officer) and Teoh Siew Thim (Chief Financial Officer)[175] - Date of signing: May 14, 2025[175]