{"url_path":"/sec/fchl/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 ** **Operating And Financial Review and Prospects**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2023796/0001493152-26-023516-index.html","accession_number":"0001493152-26-023516","cik":"0002023796","ticker":"FCHL","issuer_name":"Fitness Champs Holdings Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/2023796/0001493152-26-023516-index.html","primary_entity_key":"0002023796","primary_entity_name":"Fitness Champs Holdings Ltd"},"word_count":8720,"has_tables":true,"body_markdown":"**Item 5.** **Operating And Financial Review and Prospects**\n\n \n\n**Overview**\n\n \n\nFitness\nChamps is a distinguished sports education provider, playing a pivotal role in shaping the aquatic landscape in Singapore. Through our\nwholly-owned subsidiaries, Fitness Champs and Fitness Aquatics (collectively referred to as the “Group”), we believe that\nwe are a leader in the domain of sports education, specializing in swimming programs for students. We are expanding into other markets,\nmost recently entering into contracts to offering swimming lessons to residential towers in Dubai.\n\n \n\nOur\ndiverse portfolio of business activities reflects our commitment to fostering a culture of water safety and proficiency. The core components\nof our operations include:\n\n \n\n●\nSchool-Based Swimming Lessons:\n\n \n\nAs\na certified partner of the Singapore Government, we are actively engaged in the SwimSafer program, administered by the MOE. This national\ninitiative aims to instill water safety awareness and equip students in public schools with essential swimming and survival skills. By\ncontributing to this program, we play a vital role in elevating the overall standard of swimming proficiency across Singapore.\n\n \n\n●\nPrivate Swimming Lessons and Aquatic Sports:\n\n \n\nWe\nextend our expertise beyond school programs, offering comprehensive swimming lessons to a diverse demographic ranging from children as\nyoung as 4 years old to youths and adults. With the flexibility of solo swim classes at any preferred location and classes held at various\npublic swimming pools, we cater to the unique needs and preferences of our students. Additionally, our commitment to aquatic sports shines\nthrough classes encompassing competitive swimming, and lifesaving.\n\n \n\n●\nMerchandise:\n\n \n\nComplementing\nour educational endeavors, we proudly offer a range of carefully curated merchandise and apparel. From swimming goggles, swim caps, and\nswimsuits to various flotation devices, our merchandise is not only functional but also bears the distinct mark of our identity. Adorned\nwith the company’s logo and brand name, “Fitness Champs,” in deep marine blue and white, our merchandise represents\na tangible connection to the values we uphold. While this does not generate material revenue, we feel this is an important aspect of\nmarketing our brand.\n\n \n\nAs\nof the date of this annual report, our Group has successfully obtained more than 1,042 contracts with schools through our designation\nby the MOE as a SwimSafer provider, and more than 191,000 students have been certified by our coaches in the SwimSafer program since\n2013. During the same time period, we have worked with more than 12,000 students through private swim classes. Our founder, Ms. Lee,\nhas been a swim coach for more than 26 years since 1999 and is registered with the NROC.\n\n \n\n22\n\n \n\n \n\n**Key\nFactors Affecting Results of Operations**\n\n \n\nWe\nbelieve our financial condition and results of operations have been and will continue to be affected by a number of factors, many of\nwhich may be beyond our control, including those factors set out in the section headed “Risk Factors” in this annual report\nand those set out below:\n\n \n\n \n●\nGovernment Policies and Regulations:\n\n \n\nChanges\nin government policies, especially in the education sector, may affect our programs and contracts.\n\n \n\n \n●\nEconomic Conditions:\n\n \n\nEconomic\nfluctuations can influence consumer spending on non-essential services, impacting our revenue from private lessons and merchandise.\n\n \n\n \n●\nCompetition:\n\n \n\nIntense\ncompetition in the aquatics sports education sector may affect our market share and pricing strategies.\n\n \n\n \n●\nCustomer Demand and Preferences:\n\n \n\nShifting\ntrends in customer preferences or declining demand for swimming programs may impact our revenue.\n\n \n\n \n●\nInstructor Availability:\n\n \n\nA\nshortage of certified swim coaches may affect our ability to meet the demand for lessons and programs.\n\n \n\n \n●\nPublic Health Events\n\n \n\nOutbreaks\nof diseases or pandemics can disrupt operations, affecting both program delivery and customer participation.\n\n \n\n \n●\nGovernment support\n\n \n\nDuring\nthe COVID-19 pandemic, the Singapore government provided significant assistance to support all industries. To cope with the elevated\nmanpower costs resulting from Leave of Absence, Stay-Home Notice and the closure of the public spacing and facilities due to Circuit\nBreaker. Additionally, the government has helped companies address their acute worker shortages in the immediate term by increasing the\ninflow of new workers and bringing back existing workers. Any reduction or termination of such pandemic-era governmental support may\nnegatively impact the business’s operations and cashflow.\n\n \n\nRegular\nmonitoring, strategic adaptation, and proactive management of these factors are crucial to maintaining the resilience and success of\nour group’s operations.\n\n \n\n**Results\nof Operations and Comparison for the Years ended December 31, 2024 and 2025**\n\n \n\nThe\nfollowing discussion is based on our Group’s historical results of operations and may not be indicative of our Group’s future\noperating performance.\n\n \n\n23\n\n \n\n** **\n\n**5.A.\nOperating Results.**\n\n** **\n\n**The\nfollowing table sets forth certain operational data for the years ended December 31, 2023, 2024 and 2025**\n\n** **\n\n  \n   \nYears ended December 31, \n\n  \nNote  \n2023  \n2024  \n2025  \n2025 \n\n  \n   \nS$’000  \nS$’000  \nS$’000  \n\n**US$’000**\n\nNote 2(d)\n \n\nRevenues \n3,13  \n 4,650  \n 4,216  \n 4,150  \n 3,232 \n\n  \n   \n    \n    \n    \n   \n\nCost of revenue \n   \n (2,660) \n (2,694) \n (3,015) \n (2,348)\n\n  \n   \n    \n    \n    \n   \n\nGross profit \n   \n 1,990  \n 1,522  \n 1,135  \n 884 \n\n  \n   \n    \n    \n    \n   \n\nOperating expenses: \n   \n    \n    \n    \n   \n\nSelling and distribution \n   \n (25) \n (173) \n (333) \n (260)\n\nGeneral and administrative \n   \n (759) \n (1,303) \n (2,274) \n (1,771)\n\nTotal operating expenses \n   \n (784) \n (1,476) \n (2,607) \n (2,031)\n\n  \n   \n    \n    \n    \n   \n\nProfit/(Loss) from operations \n   \n 1,206  \n 46  \n (1,472) \n (1,147)\n\n  \n   \n    \n    \n    \n   \n\nOther income (expense): \n   \n    \n    \n    \n   \n\nInterest income \n   \n 3  \n 6  \n 4  \n 3 \n\nInterest expense \n   \n (22) \n (25) \n (19) \n (15)\n\nGovernment grants \n   \n 48  \n 114  \n 94  \n 74 \n\nRental income \n   \n -  \n 30  \n 32  \n 25 \n\nTotal other income, net \n   \n 29  \n 125  \n 111  \n 87 \n\n  \n   \n    \n    \n    \n   \n\nIncome/(Loss) before income tax \n   \n 1,235  \n 171  \n (1,361) \n (1,060)\n\n  \n   \n    \n    \n    \n   \n\nIncome tax (expense) benefit \n14  \n (117) \n 1  \n (4) \n (3)\n\n  \n   \n    \n    \n    \n   \n\nNET INCOME/(LOSS) \n   \n 1,118  \n 172  \n (1,365) \n (1,063)\n\nOther comprehensive income \n   \n    \n    \n    \n   \n\nItems that may be reclassified subsequently to profit or loss: \n   \n    \n    \n    \n   \n\n  \n   \n    \n    \n    \n   \n\nCurrency translation differences arising from consolidation \n   \n -  \n -  \n (7) \n (6)\n\nTOTAL COMPREHENSIVE INCOME/(LOSS) \n   \n 1,118  \n 172  \n (1,372) \n (1,069)\n\n  \n   \n    \n    \n    \n   \n\nEarnings/(Loss) per ordinary share \n   \n    \n    \n    \n   \n\nBasic and diluted \n   \n 1,118  \n 20.98  \n (141.69) \n (110.34)\n\n  \n   \n    \n    \n    \n   \n\nWeighted average number of ordinary shares \n   \n    \n    \n    \n   \n\nBasic and diluted* \n   \n -** \n 8,197  \n 9,634  \n 9,634 \n\n** **\n\n*\nRetrospectively presented for the effect of (i) the issuance of 1 ordinary share on February 15, 2024 in preparation of the Company’s\ninitial public offering, (ii) the 1:200 share subdivision and 5,000,000 share surrender approved on October 2, 2024, (iii) the 15\nfor 1 reverse share split effected on February 12, 2026, and (iv) the 30 for 1 reverse share split effected on May 4, 2026.\n\n \n\n**\nBelow S$1,000/US$1,000\n\n \n\n24\n\n \n\n** **\n\nAs\nset forth in the following table, for the years ended December 31, 2024 and 2025 respectively, our revenue was derived from the following\nsegment:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2024  \n**2025**  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nGovernment sector \n 1,700  \n 40.3  \n 1,701  \n 1,325  \n 41.3 \n\nPrivate sector \n 2,516  \n 59.7  \n 2,449  \n 1,907  \n 58.7 \n\nTotal \n 4,216  \n 100.0  \n 4,150  \n 3,232  \n 100.0 \n\n \n\nOur\nrevenue for the years ended December 31, 2024 and 2025 is diversified across public and private sectors. Public sector income is driven\nby school-based programs and made up approximately 40% of our revenue for the years ended December 31, 2024 and 2025. In the private\nsector, revenue is mainly from private lessons and aquatic sports, pickleball, and sales of merchandise products, accounting for approximately\n60% of our revenue for the years ended December 31, 2024 and 2025.\n\n \n\nTotal\nrevenue decreased by approximately S$66,000 or 1.6% to approximately S$4.150 million (US$3.232 million) for the year ended December 31,\n2025 from approximately S$4.216 million for the year ended December 31, 2024.\n\n \n\nThere\nwas a reduction in revenue in both sectors for the year ended 2025 as compared to the year ended 2024 mainly attributed slightly lower\nenrolment levels during the financial year in 2025.\n\n \n\n**Revenue\nby geographical location**\n\n \n\nFor\nthe years ended December 31, 2024 and 2025, all of our net revenue was derived from customers located in Singapore.\n\n \n\n**Cost\nof revenue**\n\n \n\nOur\ncost of revenue primarily consists of test fees, certification fees and coaches’ fees. For the years ended December 31, 2024 and\n2025, our cost of revenue was S$2.694 million and S$3.015 million (US$2.348 million), respectively. Our cost of revenue increased by\nS$321,000 or 12.0% mainly due to an increase in coaches’ fees.\n\n \n\nCoaches’\nfees increased by approximately S$322,000, or 13.9%, to approximately S$2.638 million (US$2.056 million) for the year ended December\n31, 2025, compared to S$2.317 million for the year ended December 31, 2024. The increase was primarily attributable to higher hourly\nrates paid to coaches, as well as the continued engagement of coaches to support our training programs despite lower revenue recognized\nduring the financial year.\n\n \n\nAssessment\nfees and certification fees increased by approximately S$11,000, or 5.3% to approximately S$220,000 (US$171,000) compared to S$209,000\nin the year ended December 31, 2024. Assessment fees increased slightly by approximately S$11,000, generally due to an overall rise in\nassessment cost during the year.\n\n \n\nMerchandise\ncost has decreased by approximately S$34,000, or 47.2% to approximately S$38,000 (US$30,000) compared to S$72,000 in the year ended December\n31, 2024. The decrease was primarily attributable to higher purchases of merchandise in the prior year, which reduced the need for purchases\nin the current year.\n\n \n\n25\n\n \n\n \n\n**Gross\nprofit and gross profit margin**\n\n** **\n\nThe\ntable below sets forth our gross profit and gross profit margin by segments for the years indicated as follows:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2024  \n2025 \n  \n\n  \n\n**Gross profit**\n\n**S$’000**\n  \nGross profit margin%  \n\n**Gross profit**\n\n**S$’000**\n \nGross profit US$’000  \nGross profit margin% \n\nGovernment sector \n 232  \n 13.6  \n179 \n 139  \n 10.5 \n\nPrivate sector \n 1,290  \n 51.3  \n956 \n 745  \n 39.0 \n\nTotal \n 1,522  \n 36.1  \n1,135 \n 884  \n 27.3 \n\n** **\n\nThe\ndecline in the gross profit margin from 36.1% for the year ended December 31, 2024 to 27.3% for the year ended December 31, 2025 can\nbe attributed to an increase in coaches’ fees, which resulted in lower profit margins.\n\n \n\nOur\ngross profit decreased by approximately S$387,000 or 25.4% during the year ended December 31, 2025 from the corresponding year before,\ndue to drop in the number of students.\n\n \n\nGross\nprofit margin for sales derived from the government sector decreased by 3.1% to 10.5% for the year ended December 31, 2025 from 13.6%\nfor the corresponding year in 2024 mainly due to a decrease in school related projects.\n\n \n\nGross\nprofit margin for sales derived from private sector decreased by 12.3% to 39.0% for the year ended December 31, 2025 from 51.3% for the\nyear ended December 31, 2024 mainly to a reduction in student enrolments and less than optimal class sizes.\n\n \n\nThe\noverall decline in our gross profit margin was primarily attributable to lower class ratios and a reduction in the number of MOE contracts\nduring the financial year. The reduction in MOE contracts was mainly due to the normalization of demand following the COVID-19 pandemic.\nDuring the pandemic, swimming lessons under school programmes were suspended or disrupted due to lockdown restrictions, resulting in\nstudents being unable to complete their swimming modules. After restrictions were lifted, programmes gradually resumed and multiple cohorts\nof students participated to catch up on delayed lessons, leading to higher participation levels in FY2023 and FY2024. As most of these\nbacklog cohorts have since completed their programmes, participation levels in FY2025 have normalized to the typical annual cohort size,\nwhich largely comprises Primary 3 students under the existing programme structure, resulting in fewer MOE contracts compared to the prior\nperiods. In addition, enrolment in the private sector is declined as activities and enrichment options normalized following the reopening\nof the economy, leading to increased availability of alternative activities for students.\n\n** **\n\n**Selling\nand distribution**\n\n \n\nOur\nselling and distribution expenses primarily consist of marketing and entertainment expenses. For the years ended December 31, 2024 and\n2025, selling and distribution expenses were S$173,000 and S$333,000 (US$260,000), respectively. The increase was primarily attributable\nto a company-wide rebranding initiative, including updates to our logo, flyers, and letterheads. In addition, we engaged a marketing\nfirm to support lead generation and other promotional activities.\n\n \n\n  \nFor the years ended December 31, \n\n  \n2024  \n2025  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nEntertainment expenses \n -  \n -  \n 2  \n 2  \n 0.8 \n\nMarketing expenses \n 173  \n 100.0  \n 331  \n 258  \n 99.2 \n\nTotal \n 173  \n 100.0  \n 333  \n 260  \n 100.0 \n\n \n\n26\n\n \n\n \n\n**General\nand administrative**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our general and administrative expenses for the periods indicated:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2024  \n2025  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nBank charges \n 10  \n 0.8  \n 10  \n 8  \n 0.5 \n\nDepreciation and amortization \n 84  \n 6.4  \n 101  \n 78  \n 4.4 \n\nDirector’s fee \n -  \n -  \n 46  \n 36  \n 2.1 \n\nLegal and professional fees \n 157  \n 12.1  \n 449  \n 350  \n 20.0 \n\nStaff costs \n 984  \n 75.5  \n 1,368  \n 1,065  \n 60.6 \n\nStakeholder engagement event \n -  \n -  \n 128  \n 100  \n 5.7 \n\nOthers \n 68  \n 5.2  \n 172  \n 134  \n 6.7 \n\nTotal \n 1,303  \n 100.0  \n 2,274  \n 1,771  \n 100.0 \n\n \n\nOur\ngeneral and administrative expenses incurred were approximately S$1.303 million and S$2.274million (US$1.771 million), for the years\nended December 31, 2024 and 2025, respectively, representing approximately 85.6%, and 198.5% of our gross profit for the corresponding\nyears.\n\n \n\nBank\ncharges mainly represent charges incurred on trade-related activities such as remittance charges.\n\n \n\nDepreciation\nexpense is charged on our plant and equipment, which includes (i) computer & software; (ii) renovation expenses; (iii) investment\nproperty; and (v) furniture and fittings\n\n \n\nAmortization\nrelates to the allocation charges over the useful life of the software purchased for our student portal management system.\n\n \n\nDirectors’\nfees for the year ended December 31, 2025 relate to remuneration for our independent directors appointed following the listing of the\ncompany on September 4, 2025. As such, there is no comparative figure for the year ended December 31, 2024.\n\n \n\nLegal\nand professional fees primarily consist of auditor’s remuneration, outsourced legal advice, corporate secretarial services, and\ninvestor relations support. For the years ended December 31, 2024 and 2025, legal and professional fees amounted to S$157,000 and S$449,000\n(US$350,000), respectively. The increase was mainly attributable to higher professional service fees incurred in connection with ongoing\ncompliance and corporate governance requirements as a publicly listed company, including the engagement of legal counsel, corporate secretarial\nservices, auditors, and investor relations support.\n\n \n\nStaff\ncosts primarily comprised salaries, employee benefits, retirement contributions for administrative employees, and directors’ remuneration.\nFor the years ended December 31, 2024 and 2025, staff costs amounted to approximately S$984,000 and S$1.368 million (US$1.065 million),\nrespectively, reflecting an increase of about S$384,000. This increase was mainly attributable to higher directors’ remuneration\nand the hiring of additional administrative staffs to support overall business growth. These costs include employee salaries, bonuses,\nallowances, and contributions to the Singapore Central Provident Fund.\n\n \n\nStakeholder\nengagement event, a one-off event, amounted to approximately S$128,000 (US$100,000) for the year ended December 31, 2025. The event brought\ntogether coaches, students, and other key stakeholders, and included activities such as a dinner, lucky draw, and other engagement initiatives.\n\n \n\nMiscellaneous\nexpenses were comprised of insurance expenses, office supplies, repair and maintenance and other general expenses.\n\n \n\n27\n\n \n\n \n\n**Total\nother income (expense), net**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of total other income (expense), net, for the years indicated:\n\n**** \n\n  \nFor the years ended December 31, \n\n  \n2024  \n2025 \n\n  \nS$’000  \nS$’000  \nUS$’000 \n\nInterest income \n 6  \n 4  \n 3 \n\nInterest expense \n (25) \n (19) \n (15)\n\nOther Income \n 11  \n 6  \n 5 \n\nGovernment grants \n 103  \n 88  \n 69 \n\nRental income \n 30  \n 32  \n 25 \n\nTotal \n 125  \n 111  \n 87 \n\n**** \n\nOur\nnet total other income was S$125,000 for the year ended December 31, 2024 and S$111,000 (US$87,000) for the year ended December 31, 2025,\nprimarily as a result of government grants net of interest expenses.\n\n \n\n*Interest\nincome*\n\n \n\nInterest\nincome earned from bank fixed deposit.\n\n \n\n*Interest\nexpense*\n\n \n\nOur\ninterest expense arose from secured bank loans. Interest expenses were approximately S$25,000 and S$19,000 (US$15,000) for the years\nended December 31, 2024 and 2025 respectively. For more details of our bank borrowings, please see the paragraph headed “Bank Indebtedness”\nin this section.\n\n \n\n*Other\nincome*\n\n \n\nOther\nIncome of approximately S$6,000 (US$5,000) comprise of government paid leave and corporate income tax rebates for the year ended December\n31, 2025 and S$11,000 for the year ended December 31, 2024.\n\n \n\n*Government\ngrants*\n\n \n\nGovernment\ngrants comprise mainly grants received for Jobs Growth Incentive (“JGI”), Progressive Wage Credit (“PWCS”), Senior\nEmployment Credit, and Small Business Recovery Grant.\n\n \n\nThe\nJGI is an initiative introduced by the Singapore Government in August 2020 to support local hiring from September 2020 to March 2023,\nto provide wage support to employers to help them in hiring local employees by co-funding monthly salaries paid to each local employee.\n\n \n\nThe\nPWCS is an initiative introduced by the Singapore Government in 2022 to provide transitional wage support for employers to adjust to\nupcoming mandatory wage increases for lower-wage workers covered by the Progressive Wage and Local Qualifying Salary requirements and\nto voluntarily raise wages of lower-wage workers. Under the scheme, the Singapore Government will co-fund wage increases of eligible\nresident employees from 2022 to 2026 and receive the payout for the respective year by the first quarter of the following year.\n\n \n\nFor\nthe year ended December 31, 2025, government grants of approximately S$13,000 (US$10,000) from PWCS and Senior Employment Credit and\nS$42,000 (US$ 33,000) from Enterprise Singapore Business Matching in Korea and digital marketing campaigns. For the year ended December\n31, 2024, government grants of S$49,000 (US$36,000) from PWCS and Senior Employment Credit and S$52,000 (US$ 38,000) from Enterprise\nSingapore Business Matching in Korea and digital marketing campaign.\n\n \n\n*Rental\nincome*\n\n \n\nRental\nincome of approximately S$32,000 (US$ 25,000) and S$30,000 primarily relates to the rental of office space recognized in the year ended\nDecember 31, 2025 and 2024.\n\n** **\n\n28\n\n \n\n** **\n\n**Income\ntax expense**\n\n** **\n\nIncome\ntax expense for the year ended December 31, 2024 comprised current year tax of S$4,000, net of an overprovision of S$5,000 relating to\nthe prior year. For the year ended December 31, 2025, income tax expense comprised current year tax, adjusted for a under provision of\nS$4,000 (US$3,000) in the prior year.\n\n** **\n\n**Net\nIncome/(Loss)**\n\n** **\n\nAs\na result of the foregoing, our net income amounted to approximately S$172,000 and loss of S$1.344 million (US$1.046 million) for the\nyears ended December 31, 2024 and 2025, respectively.\n\n \n\n**Liquidity\nand Capital Resources**\n\n** **\n\nOur\nliquidity and working capital requirements primarily relate to our operating expenses. Historically, we have met our working capital\nand other liquidity requirements through a combination of cash generated from our operations, loans from banking facilities and net proceeds\nreceived from initial public offering. Going forward, we expect to fund our working capital and other liquidity requirements from various\nsources, including but not limited to cash generated from our operations, loans from banking facilities, the net proceeds from initial\npublic offering, the net proceeds from future offering and other equity and debt financings, as and when appropriate.\n\n \n\n**Material\nCash Requirements**\n\n \n\nOur\ncash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to\nfacility leases and other operating leases. We lease our office premises. We expect to make future payments on existing leases from cash\ngenerated from operations. We have limited credit available from our major vendors and are required to prepay the majority of our consumable\npurchases, which further constraints our cash liquidity.\n\n \n\nWe\nhad the following contractual obligations as of December 31, 2025:\n\n \n\nContractual Obligations in S$’000 \nTotal  \nLess than\n1 year  \n2 – 3 years  \n3 – 5 years  \nMore than\n5 years \n\nProperty loans \n 398  \n 10  \n 11  \n 35  \n 342 \n\nRefund liability \n 92  \n 92  \n -  \n -  \n - \n\nTotal obligations \n 490  \n 102  \n 11  \n 35  \n 342 \n\n \n\n**Cash\nflows – 2024 and 2025**\n\n** **\n\nThe\nfollowing table summarizes our cash flows for the years ended December 31, 2024 and 2025:\n\n \n\n  \nYears ended December 31, \n\n  \n2024  \n2025 \n\n  \nS$’000  \nS$’000  \nUS$’000 \n\nCash and cash equivalent at beginning of the year \n 815  \n 314  \n 230 \n\nNet cash provided by operating activities \n 82  \n 614  \n 447 \n\nNet cash used in investing activities \n (86) \n (28) \n (22)\n\nNet cash (used in)/provided by financing activities \n (497) \n 1,097  \n 877 \n\nEffect of Exchange Rate Changes on Cash \n -  \n (7) \n (17)\n\nNet change in cash and cash equivalent \n (501) \n 1,683  \n 1,302 \n\nCash and cash equivalent as at end of the year \n 314  \n 1,990  \n 1,549 \n\n \n\n29\n\n \n\n \n\n**Cash\nflows from operating activities**\n\n** **\n\nFor\nthe year ended December 31, 2025, our net cash provided by operating activities was approximately S$614,000 (US$447,000), primarily reflecting\nnet loss after tax of approximately S$1.365 million (US$1.063 million), as adjusted by the following:\n\n \n\n(a)\npositive changes of approximately S$101,000 (US$77,000) in non-cash items primarily including depreciation and amortization;\n\n(b)\nan increase of approximately S$19,000 (US$15,000) in interest expense;\n\n(c)\na decrease of approximately S$4,000 (US$3,000) in interest income;\n\n(d)\na decrease of approximately S$7,000 (US$36,000) in foreign reserve; and\n\n(e)\npositive changes of approximately S$1,842,000 (US$1,403,000) in working capital primarily reflecting (i) a decrease of approximately\nS$1,304,000 (US$951,000) in deposit, prepayment and other receivables, (ii) an increase of approximately S$555,000 (US$466,000) in payable\nand (iv) a decrease of approximately S$4,000 (US$3,000) in income tax payable.\n\n \n\nFor\nthe year ended December 31, 2024, our net cash provided by operating activities was approximately S$82,000 (US$61,000), primarily reflecting\nnet profit after tax of approximately S$172,000 (US$126,000), as adjusted by the following:\n\n \n\n(a)\npositive changes of approximately S$84,000 (US$62,000) in non-cash items primarily including depreciation and amortization;\n\n(b)\nan increase of approximately S$25,000 (US$18,000) in interest expense;\n\n(c)\na decrease of approximately S$6,000 (US$4,000) in interest income; and\n\n(d)\nnegative changes of approximately S$193,000 (US$141,000) in working capital primarily reflecting (i) an increase of approximately S$1,000\n(US$1,000) in accounts receivable (ii) a decrease of approximately S$85,000 (US$63,000) in deposit, prepayment and other receivables,\n(iii) an increase of approximately S$77,000 (US$57,000) in payable and (iv) a decrease of approximately S$186,000 (US$136,000) in income\ntax payable.\n\n \n\n**Cash\nflows from investing activities**\n\n* *\n\nFor\nthe year ended December 31, 2025, our net cash used in investing activities totaled approximately S$28,000 (US$22,000). This figure primarily\ncomprised a purchase of property, plant, and equipment amounting to S$1,000 (US$1,000) and intangible asset amounting to S$31,000 (US$24,000).\nIt was partially offset by the interest income of S$4,000 (US$3,000).\n\n \n\nFor\nthe year ended December 31, 2024, our net cash used in investing activities totaled approximately S$86,000 (US$63,000). This figure primarily\ncomprised a purchase of property, plant, and equipment amounting to S$33,000 (US$24,000) and intangible asset amounting to S$59,000 (US$43,000).\nIt was partially offset by the interest income of S$6,000 (US$4,000).\n\n \n\n**Cash\nflows from financing activities**\n\n** **\n\nFor\nthe year ended December 31, 2025, our net cash provided by financing activities was approximately S$1.10 million (US$877,000), primarily\nconsisting of proceeds from the issuance of share capital of approximately S$2.127 million (US$1.656 million); repayment of a loan of\napproximately S$62,000 (US$27,000), interest paid of approximately S$19,000 (US$15,000); lease payment of S$37,000 (US$27,000), advances\nof loan from Director to Company of S$730,000 (US$568,000) and repayments of loans to a director of S$1.641 million (US$1.278 million).\n\n** **\n\nFor\nthe year ended December 31, 2024, our net cash used in financing activities was approximately S$497,000 (US$364,000), primarily consisting\nof a dividend of S$300,000 (US$220,000) paid to a shareholder of the Company; repayment of a loan of approximately S$112,000 (US$82,000),\ninterest paid of approximately S$22,000 (US$16,000); lease payment of S$38,000 (US$28,000); advances of loan from Director to Company\nof S$1.254 million (US$920,000); repayments of loans from a director of S$125,000 (US$92,000) and advance payment of transaction cost\nin connection to the issuance of shares of S$1.15 million (US$845,000).\n\n \n\n30\n\n \n\n \n\n**Capital\nExpenditures**\n\n \n\nThere\nwere capital expenditures of S$92,000 and S$32,000 incurred in the years ended December 31, 2024 and December 31, 2025, respectively.\n\n \n\nWe\nplan to fund our future capital expenditures with our existing cash balance and proceeds from the initial public offering. We will continue\nto make capital expenditures to meet the expected growth of our business.\n\n \n\n**Working\nCapital**\n\n** **\n\nWe\nbelieve that we have sufficient working capital for our requirements for at least the next 12 months from the date of this annual report,\nin the absence of unforeseen circumstances, considering the financial resources presently available to us, including cash and cash equivalents\non hand and cash flows from our operations.\n\n** **\n\n**Accounts\nreceivable**\n\n** **\n\nFor\nthe year ended December 31, 2024 and December 31, 2025, there were no amount outstanding from trade receivables.\n\n \n\nWe\ndetermine, on a continuing basis, the probable losses and an allowance for doubtful accounts, based on several factors including internal\nrisk ratings, customer credit quality, payment history, historical bad debt/write-off experience and forecasted economic and market conditions.\nAccounts receivables are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition,\nreceivable balances are monitored on an ongoing basis and we believe that our exposure to bad debts is nominal.\n\n** **\n\n**Amount\ndue from (to) director**\n\n \n\nAmount\ndue to director had a balance S$1.129 million and S$218,000 (US$170,000) as of December 31, 2024 and December 31, 2025 respectively.\nThe amount due from (to) director is non-trade, unsecured, interest free and repayable on demand.\n\n \n\n**Accounts\npayable and accrued liabilities**\n\n \n\n  \nYears ended December 31, \n\n  \n2024  \n2025 \n\n  \nS$’000  \nS$’000  \nUS$’000 \n\nAccounts payable \n 79  \n 16  \n 13 \n\nOther payables \n 21  \n 569  \n 444 \n\nAccruals \n 168  \n 208  \n 162 \n\nDeposit received \n 99  \n 92  \n 71 \n\nDeferred revenue \n 352  \n 389  \n 302 \n\nTotal \n 719  \n 1,274  \n 992 \n\n \n\nOur\naccount payable was approximately S$719,000 as of December 31, 2024 and S$1.274 million (US$992,000) as of December 31, 2025. The majority\nof the account payable consists of deposit received and deferred revenue received. Although these fees are classified under accounts\npayable, the nature of it is the same as deferred revenue as fees are collected before swimming classes are provided.\n\n \n\nDeferred\nrevenue is a contract liability in that the Company is obligated to transfer services to customers for which the Company has received\nadvance swimming fees from customers in the form of cash. The balance of “deferred revenue” represents unfulfilled performance\nobligations in the sales agreement, i.e. services that have not yet been rendered. Once the service has been rendered, the amount in\nthe “Deferred revenue” account is shifted to a revenue account.\n\n \n\n31\n\n \n\n \n\nDeferred\nrevenue recognized as revenue during the respective years ended December 31, 2024 and 2025 was S$462,000 and S$352,000 (US$257,000),\nrespectively.\n\n \n\nWe\ndid not have any material default in payment of accounts payable during the years ended December 31, 2024 and 2025.\n\n \n\n**Contractual\nObligations**\n\n \n\nWe\nbelieve that we have sufficient working capital for our requirements for at least the next 12 months from the date of this annual report,\nabsent unforeseen circumstances, taking into account the financial resources presently available to us, including cash and cash equivalents\non hand and cash flows from our operations.\n\n** **\n\nWe\nhad the following contractual obligations as of December 31, 2025:\n\n \n\nContractual Obligations in S$’000 \nTotal  \nLess than\n1 year  \n2 – 3 years  \n3 – 5 years  \nMore than\n5 years \n\nProperty loans \n 398  \n 10  \n 11  \n 35  \n 342 \n\nRefund liability \n 92  \n 92  \n -  \n -  \n - \n\nTotal obligations \n 490  \n 102  \n 11  \n 35  \n 342 \n\n \n\nWe\nhad the following contractual obligations and lease commitments as of December 31, 2024:\n\n \n\nContractual Obligations in S$’000 \nTotal  \nLess than\n1 year  \n1 – 3 years  \n3 – 5 years  \nMore than\n5 years \n\nProperty loans \n 407  \n 9  \n 20  \n 22  \n 356 \n\nWorking capital loans \n 53  \n 53  \n —  \n —  \n — \n\nOperating lease liabilities \n 37  \n 37  \n —  \n —  \n — \n\nRefund liability \n 94  \n 94  \n —  \n —  \n — \n\nTotal obligations \n 591  \n 193  \n 20  \n 22  \n 356 \n\n \n\n**Bank\nindebtedness**\n\n** **\n\nBank Borrowings \nTerms of Repayments  \nAnnual Interest Rate (%)  \nAs of\nDecember 31, 2025 \n\n  \n   \n   \nS$’000  \nUS$’000 \n\n  \n   \n   \n   \n  \n\nProperty loan \n 27 years  \n 3.75  \n 398  \n 310 \n\nTotal \n    \n    \n 398  \n 310 \n\n \n\nBank Borrowings \nTerms of Repayments  \nAnnual Interest Rate (%)  \nAs of\nDecember 31, 2024 \n\n  \n   \n   \nS$’000  \nUS$’000 \n\n  \n   \n   \n   \n  \n\nTerm loan \n 5 years  \n 2.50  \n 53  \n 39 \n\nProperty loan \n 27 years  \n 4.82  \n 407  \n 298 \n\nTotal \n    \n    \n 460  \n 337 \n\n** **\n\nThe\nterm loan of S$500,000 was an unsecured borrowing from OCBC bank obtained in 2020 with an annual fixed interest rate of 2.50%. The loan\nis for a period of 5 years up to 2025. This amount was used to finance the expansion of our business. The term loan has matured by June\n30, 2025.\n\n \n\n32\n\n \n\n \n\nThe\nmortgage loan of S$420,000 was a secured borrowing from OCBC bank obtained in 2023. The loan is for a period of 27 years up to 2050 with\nan annual variable interest rate of 3.75%. This amount was used to finance the purchasing of our office at 7030 Ang Mo Kio Avenue 5 #09-102\nSingapore 569880.\n\n \n\nThe\nCompany’s bank borrowings currently are guaranteed by a personal guarantee from Ms. Lee, a director and shareholder of the Company.\n\n \n\n**Comparison\nof operating results for the years ended December 31, 2023 and 2024**\n\n** **\n\nThe\nfollowing discussion is based on our Group’s historical results of operations and may not be indicative of our Group’s future\noperating performance.\n\n \n\n**Revenue**\n\n \n\nAs\nset forth in the following table, for the years ended December 31, 2023 and 2024 respectively, our revenue was derived from the following\nsegment:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nGovernment sector \n 1,994  \n 42.9  \n 1,700  \n 1,244  \n 40.3 \n\nPrivate sector \n 2,656  \n 57.1  \n 2,516  \n 1,842  \n 59.7 \n\nTotal \n 4,650  \n 100.0  \n 4,216  \n 3,086  \n 100.0 \n\n \n\nOur\nrevenue for the years ended December 31, 2024 and 2023 is diversified across public and private sectors. Public sector income is driven\nby school-based programs and made up approximately 40% of our revenue for the years ended December 31, 2023 and 2024. In the private\nsector, revenue is mainly from private lessons and aquatic sports, and sales of merchandise products, accounting for approximately 60%\nof our revenue for the years ended December 31, 2023 and 2024.\n\n \n\nTotal\nrevenue decreased by approximately S$434,000 or 9.3% to approximately S$4.216 million (US$3.086 million) for the year ended December\n31, 2024 from approximately S$4.650 million for the year ended December 31, 2023.\n\n \n\nThere\nwas a reduction in revenue in both sectors for the year ended 2024 as compared to the year ended 2023 mainly attributed to fewer MOE\ncontracts being awarded and closure of certain swimming pools in early 2024, resulting in a reduction of students as some customers found\nit inconvenient to travel to new locations.\n\n \n\n**Revenue\nby geographical location**\n\n \n\nFor\nthe years ended December 31, 2023 and 2024, all of our net revenue was derived from customers located in Singapore. We do have plans\nto expand beyond Singapore.\n\n \n\n**Cost\nof revenue**\n\n \n\nOur\ncost of revenue primarily consists of test fees, certification fees and coaches’ fees. For the years ended December 31, 2023 and\n2024, our cost of revenue was S$2.660 million and S$2.694 million (US$1.972 million), respectively. Our cost of revenue increased by\nS$34,000 or 1.3% mainly due to an increase in coaches’ fees and cost of merchandise.\n\n** **\n\nCoaches’\nfees increased by approximately S$8,000, or 0.3% to approximately S$2.317 million (US$1.702 million) compared to S$2.309 million for\nthe year ended December 31,2023. The increase was as a result of efforts to introduce more classes to the students and hence, we increased\nclass offerings that necessitated higher coaches’ fees. However, overall student enrollment was still lower than in 2023 because\neven though we increased the number of classes offered, these classes were not at maximum enrollment.\n\n \n\n33\n\n \n\n \n\nEntrance\nfees decreased by approximately S$31,000, or 13.1% to approximately S$209,000 (US$153,000) compared to S$240,000 in the year ended December\n31, 2023. The reduction in students in 2024 led to a decrease in overall entrance fee expenses.\n\n \n\nAssessment\nfees decreased by approximately S$11,000, or 13.5% to approximately S$71,000 (US$52,000) compared to S$82,000 in the year ended December\n31, 2023. The reduction in students in 2024 led to a decrease in overall assessment fees and certifications.\n\n \n\nCost\nof goods sold – merchandise and related shipment cost increased by approximately S$47,000, or 1673% to approximately S$75,000 (US$55,000)\ncompared to S$28,000 in the year ended December 31, 2023. The increase in 2024 was due to a change in the design of our apparel to enhance\nour corporate image in our re-branding exercise in the first half year of 2024.\n\n \n\n**Gross\nprofit and gross profit margin**\n\n** **\n\nThe\ntable below sets forth our gross profit and gross profit margin by segments for the years indicated as follows:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024 \n  \n\n  \n\n**Gross profit**\n\n**S$’000**\n  \nGross profit margin%  \n\n**Gross profit**\n\n**S$’000**\n \nGross profit US$’000  \nGross profit margin% \n\nGovernment sector \n 299  \n 15.0  \n232 \n 170  \n 13.7 \n\nPrivate sector \n 1,691  \n 63.7  \n1,290 \n 944  \n 51.2 \n\nTotal \n 1,990  \n 42.8  \n1,522 \n 1,114  \n 36.1 \n\n \n\nThe\ndecline in the gross profit margin from 42.8% for the year ended December 31, 2023 to 36.1% for the year ended December 31, 2024 can\nbe attributed to an increase in coaches’ fees, which resulted in lower profit margins.\n\n \n\nOur\ngross profit decreased by approximately S$468,000 or 23.5% during the year ended December 31, 2024 from the corresponding year before,\ndue to a dip in class ratio and a drop in the number of students due to pool closure for retrofitting.\n\n \n\nGross\nprofit margin for sales derived from the government sector decreased by 1.3% to 13.7% for the year ended December 31, 2024 from 15.0%\nfor the corresponding year in 2023 mainly due to a decrease in school related projects.\n\n \n\nGross\nprofit margin for sales derived from private sector decreased by 12.5% to 51.2% for the year ended December 31, 2024 from 63.7% for the\nyear ended December 31, 2023 mainly to a reduction in student enrolments and less than optimal class sizes.\n\n \n\nThe\noverall decline in our gross profit margin can be attributed mainly to dip in class ratio and fewer MOE contracts. The fewer MOE contracts\nare a result of the trickle-down effect of the COVID-19 pandemic as for the years after the pandemic. Students were unable to swim due\nto the lock down restrictions and classes were gradually reinstated and students were catching up after the easing of restrictions, hence\nwe had multiple years of students taking classes through MOE contracts. Going forward, only Primary 3 grade students will participate\nin the MOE program so overall MOE numbers are down from recent prior years as a result.\n\n** **\n\n**Selling\nand distribution**\n\n \n\nOur\nselling and distribution expenses primarily consist of marketing and entertainment expenses. For the years ended December 31, 2023 and\n2024, our selling and distribution expenses were S$25,000 and S$173,000 (US$126,000) respectively. The increase is attributed to the\nincrease of digital advertisement and trade mission to regional countries.\n\n \n\n34\n\n \n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nEntertainment expenses \n 5  \n 20.0  \n -  \n -  \n - \n\nMarketing expenses \n 20  \n 80.0  \n 173  \n 126  \n 100.0 \n\nTotal \n 25  \n 100.0  \n 173  \n 126  \n 100.0 \n\n \n\n**General\nand administrative**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our general and administrative expenses for the periods indicated:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024  \n  \n\n  \nS$’000  \n%  \nS$’000  \nUS$’000  \n% \n\nBank charges \n 33  \n 4.3  \n 10  \n 7  \n 0.7 \n\nDepreciation and amortization \n 31  \n 4.1  \n 84  \n 62  \n 6.5 \n\nLegal and professional fees \n 1  \n 0.1  \n 157  \n 115  \n 12.1 \n\nStaff costs \n 645  \n 85.0  \n 984  \n 720  \n 75.5 \n\nOthers \n 49  \n 6.5  \n 68  \n 50  \n 5.2 \n\nTotal \n 759  \n 100.0  \n 1,303  \n 954  \n 100.0 \n\n \n\nOur\ngeneral and administrative expenses incurred were approximately S$759,000 and S$1.3 million (US$954,000), for the years ended December\n31, 2023 and 2024, respectively, representing approximately 38.2%, and 85.6% of our gross profit for the corresponding years.\n\n \n\nBank\ncharges mainly represent charges incurred on trade-related activities such as remittance charges.\n\n \n\nDepreciation\nexpense is charged on our plant and equipment, which includes (i) computer & software; (ii) renovation expenses; (iii) investment\nproperty; and (v) furniture and fittings\n\n \n\nAmortization\nrelates to the allocation charges over the useful life of the software purchased for our student portal management system.\n\n \n\nLegal\nand professional fees mainly represented auditor’s remuneration and outsourced of legal advice. Legal and professional fees for\nthe years ended December 31, 2023 and 2024 amounted to S$1,000 and S$157,000 (US$115,000), respectively. The increase was mainly due\nto higher professional service fees as a result of the costs related to our initial public offering.\n\n \n\nStaff\ncosts primarily comprised salaries, employee benefits, retirement contributions for administrative employees, and directors’ remuneration.\nFor the years ended December 31, 2023, and 2024, staff costs amounted to approximately S$645,000 and S$984,000 (US$720,000), respectively,\nreflecting an increase of about S$339,000. This increase was mainly attributable to higher directors’ remuneration and the hiring\nof additional administrative staff to support overall business growth. These costs include employee salaries, bonuses, allowances, and\ncontributions to the Singapore Central Provident Fund.\n\n \n\nMiscellaneous\nexpenses were comprised of accounting fees, corporate secretarial and tax fees, insurance expenses, office supplies, repair and maintenance\nand other general expenses.\n\n \n\n35\n\n \n\n \n\n**Total\nother income (expense), net**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of total other income (expense), net, for the years indicated:\n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024 \n\n  \nS$’000  \nS$’000  \nUS$’000 \n\nInterest income \n 3  \n 6  \n 4 \n\nInterest expense \n (22) \n (25) \n (18)\n\nOther Income \n -  \n 11  \n 8 \n\nGovernment grants \n 48  \n 103  \n 75 \n\nRental income \n -  \n 30  \n 22 \n\nTotal \n 29  \n 125  \n 91 \n\n \n\nOur\nnet total other income was S$29,000 for the year ended December 31, 2023 and S$125,000 (US$91,000) for the year ended December 31, 2024,\nprimarily as a result of government grants net of interest expenses.\n\n \n\n*Interest\nincome*\n\n \n\nInterest\nincome earned from bank fixed deposit.\n\n \n\n*Interest\nexpense*\n\n \n\nOur\ninterest expense arose from secured bank loans. Interest expenses were approximately S22,000 and S$25,000 (US$18,000) for the years ended\nDecember 31, 2023 and 2024 respectively. For more details of our bank borrowings, please see the paragraph headed “Bank Indebtedness”\nin this section.\n\n \n\n*Other\nincome*\n\n \n\nOther\nIncome of approximately S$11,000 (US$8,000) comprise of government paid leave and corporate income tax rebates for the year ended December\n31, 2024 and S$ nil for the year ended December 31, 2023.\n\n \n\n*Government\ngrants*\n\n \n\nGovernment\ngrants comprise mainly grants received for Jobs Growth Incentive (“JGI”), Progressive Wage Credit (“PWCS”), Senior\nEmployment Credit, and Small Business Recovery Grant.\n\n \n\nThe\nJGI is an initiative introduced by the Singapore Government in August 2020 to support local hiring from September 2020 to March 2023,\nto provide wage support to employers to help them in hiring local employees by co-funding monthly salaries paid to each local employee.\n\n \n\nThe\nPWCS is an initiative introduced by the Singapore Government in 2022 to provide transitional wage support for employers to adjust to\nupcoming mandatory wage increases for lower-wage workers covered by the Progressive Wage and Local Qualifying Salary requirements and\nto voluntarily raise wages of lower-wage workers. Under the scheme, the Singapore Government will co-fund wage increases of eligible\nresident employees from 2022 to 2026 and receive the payout for the respective year by the first quarter of the following year.\n\n \n\nFor\nthe year ended December 31, 2024, government grants of approximately S$49,000 (US$36,000) from PWCS and Senior Employment Credit and\nS$52,000 (US$ 38,000) from Enterprise Singapore Business Matching in Korea and digital marketing campaigns. For the year ended December\n31, 2023, government grants of approximately S$48,000 comprised mainly from JGI and PWCS respectively.\n\n \n\n*Rental\nincome*\n\n \n\nRental\nincome of approximately S$30,000 (US$ 22,000) primarily relates to the rental of office space recognized in the year ended December 31,\n2024. In 2023, no rental income was recognized as the properties were used for the Group’s own operations.\n\n \n\n36\n\n \n\n \n\n**Income\ntax expense**\n\n** **\n\nIncome\ntax expense comprised current tax expense for the year ended December 31, 2023 and there is an overprovision of S$5,000 in prior year\nnet of current year tax expense S$4,000 (US$3,000) for the year ended December 31, 2024.\n\n** **\n\n**Net\nIncome**\n\n** **\n\nAs\na result of the foregoing, our net income amounted to approximately S$1.118 million and S$172,000 (US$126,000) for the years ended December\n31, 2023 and 2024, respectively.\n\n \n\n**Liquidity\nand Capital Resources**\n\n** **\n\nOur\nliquidity and working capital requirements primarily relate to our operating expenses. Historically, we have met our working capital\nand other liquidity requirements through a combination of cash generated from our operations and loans from banking facilities. Going\nforward, we expect to fund our working capital and other liquidity requirements from various sources, including but not limited to cash\ngenerated from our operations, loans from banking facilities, the net proceeds from this initial public offering and other equity and\ndebt financings, as and when appropriate.\n\n \n\n**Material\nCash Requirements**\n\n \n\nOur\ncash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to\nfacility leases and other operating leases. We lease our office premises. We expect to make future payments on existing leases from cash\ngenerated from operations. We have limited credit available from our major vendors and are required to prepay the majority of our consumable\npurchases, which further constraints our cash liquidity.\n\n \n\nWe\nhad the following contractual obligations and lease commitments as of December 31, 2024:\n\n \n\nContractual Obligations in S$’000 \nTotal  \nLess than\n1 year  \n1 – 3 years  \n3 – 5 years  \nMore than\n5 years \n\nProperty loans \n 407  \n 9  \n 20  \n 22  \n 356 \n\nWorking capital loans \n 53  \n 53  \n -  \n -  \n - \n\nOperating lease liabilities \n 37  \n 37  \n -  \n -  \n - \n\nRefund liability \n 94  \n 94  \n -  \n -  \n - \n\nTotal obligations \n 591  \n 193  \n 20  \n 22  \n 356 \n\n \n\n**Cash\nflows – 2023 and 2024**\n\n** **\n\nThe\nfollowing table summarizes our cash flows for the years ended December 31, 2023 and 2024:\n\n \n\n  \nYears ended December 31, \n\n  \n2023  \n2024 \n\n  \nS$’000  \nS$’000  \nUS$’000 \n\nCash and cash equivalent at beginning of the year \n 504  \n 815  \n 596 \n\nNet cash provided by operating activities \n 1,296  \n 82  \n 61 \n\nNet cash used in investing activities \n (608) \n (86) \n (63)\n\nNet cash used in financing activities \n (377) \n (497) \n (364)\n\nNet change in cash and cash equivalent \n 311  \n (501) \n (366)\n\nCash and cash equivalent as at end of the year \n 815  \n 314  \n 230 \n\n \n\n37\n\n \n\n \n\n**Cash\nflows from operating activities**\n\n** **\n\nFor\nthe year ended December 31, 2024, our net cash provided by operating activities was approximately S$82,000 (US$61,000), primarily reflecting\nnet profit after tax of approximately S$172,000 (US$126,000), as adjusted by the following:\n\n \n\n(a)\npositive changes of approximately S$84,000 (US$62,000) in non-cash items primarily including depreciation and amortization;\n\n(b)\nan increase of approximately S$25,000 (US$18,000) in interest expense;\n\n(c)\na decrease of approximately S$6,000 (US$4,000) in interest income; and\n\n(d)\nnegative changes of approximately S$193,000 (US$141,000) in working capital primarily reflecting (i) an increase of approximately S$1,000\n(US$1,000) in accounts receivable (ii) a decrease of approximately S$85,000 (US$63,000) in deposit, prepayment and other receivables,\n(iii) an increase of approximately S$77,000 (US$57,000) in payable and (iv) a decrease of approximately S$186,000 (US$136,000) in income\ntax payable.\n\n \n\nFor\nthe year ended December 31, 2023, our net cash provided by operating activities was approximately S$1.296 million (US$981,000), primarily\nreflecting net income after tax of approximately S$1.118 million (US$847,000), as adjusted by the following:\n\n \n\n(a)\npositive changes of approximately S$31,000 (US$23,000) in non-cash items primarily including depreciation of property and equipment;\n\n(b)\nan increase of approximately S$22,000 (US$17,000) in interest expense;\n\n(c)\na decrease of approximately S$3,000 (US$3,000) in interest income; and\n\n(d)\npositive changes of approximately S$128,000 (US$97,000) in working capital primarily reflecting (i) a decrease of approximately S$1,000\n(US$1,000) in accounts receivable, (ii) a decrease of approximately S$127,000 (US$96,000) in deposits, prepayment and other receivables,\n(iii) an increase of approximately S$203,000 (US$154,000) in payable and (iv) an increase of approximately S$53,000 (US$40,000) in income\ntax payable.\n\n \n\n**Cash\nflows from investing activities**\n\n* *\n\nFor\nthe year ended December 31, 2024, our net cash used in investing activities totaled approximately S$86,000 (US$63,000). This figure primarily\ncomprised a purchase of property, plant, and equipment amounting to S$33,000 (US$24,000) and intangible asset amounting to S$59,000 (US$43,000).\nIt was partially offset by the interest income of S$6,000 (US$4,000).\n\n \n\nFor\nthe year ended December 31, 2023, our net cash used in investing activities totaled approximately S$608,000 (US$460,000). This figure\nprimarily comprised a purchase of property, plant, and equipment amounting to S$611,000 (US$463,000).\n\n \n\n**Cash\nflows from financing activities**\n\n** **\n\nFor\nthe year ended December 31, 2024, our net cash used in financing activities was approximately S$497,000 (US$364,000), primarily consisting\nof a dividend of S$300,000 (US$220,000) paid to a shareholder of the Company; repayment of a loan of approximately S$112,000 (US$82,000),\ninterest paid of approximately S$22,000 (US$16,000); lease payment of S$38,000 (US$28,000); net balances of loans from a director of\nS$1.129 million (US$827,000) and advance payment of transaction cost in connection to the issuance of shares of S$1.154 million (US$845,000).\n\n \n\nFor\nthe year ended December 31, 2023, our net cash used in financing activities was approximately S$377,000 (US$286,000), primarily consisting\nof a loan drawdown of approximately S$420,000 (US$318,000) offset by a repayment of loan of approximately S$105,000 (US$79,000), interest\npaid of approximately S$22,000 (US$17,000), net balances of loans to and from the director of S$670,000 (US$508,000) and dividends amounting\nto S$1.236 million (US$937,000) were paid by offsetting them from the amount due from a director.\n\n \n\n38\n\n \n\n \n\n**Capital\nExpenditures**\n\n \n\nThere\nwere capital expenditures of S$611,000 and S$92,000 incurred in the years ended December 31, 2023 and December 31, 2024, respectively.\n\n \n\nWe\nplan to fund our future capital expenditures with our existing cash balance and proceeds from this public initial offering. We will continue\nto make capital expenditures to meet the expected growth of our business.\n\n \n\n**Going\nconcern**\n\n** **\n\nAs\nof December 31, 2024, the Company’s negative operating cash flow and net current liability position raise substantial doubt about\nthe Company’s ability to continue as a going concern. In assessing the going concern, management and the Board have considered\nthe following:\n\n \n\n1.\nOngoing support from our chief executive officer, demonstrated by the substantial related-party financing.\n\n \n\n2.\nPotential equity financing or capital infusion as indicated by the historical increase in paid-in capital.\n\n \n\n3.\nCost management and lean operations.\n\n \n\n4.\nRevenue improvement initiatives not reflected in balance sheet alone.\n\n \n\nIf\nmanagement is unable to execute this plan, there would likely be a material adverse effect on the Company’s business. These consolidated\nfinancial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue in operation\nfor the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course\nof business.\n\n \n\n**Accounts\nreceivable**\n\n** **\n\nThere\nare no accounts receivable as of December 31, 2024 and approximately S$1,000 (