{"url_path":"/sec/ftrk/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":"2026-06-30","source_url":"https://www.sec.gov/Archives/edgar/data/2027262/0001493152-26-031197-index.html","accession_number":"0001493152-26-031197","cik":"0002027262","ticker":"FTRK","issuer_name":"Fast Track Group","edgar_url":"https://www.sec.gov/Archives/edgar/data/2027262/0001493152-26-031197-index.html","primary_entity_key":"0002027262","primary_entity_name":"Fast Track Group"},"word_count":3654,"has_tables":true,"body_markdown":"**ITEM\n5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**\n\n** **\n\n*The\nfollowing discussion and analysis of our financial condition, changes in financial condition and results of operations should be read\nin conjunction with our audited consolidated financial statements and the related notes and other financial information included elsewhere\nin this annual report. In addition to historical consolidated financial information, the following discussion may contain forward-looking\nstatements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. Our actual results could differ materially\nfrom those discussed in the forward-looking statements as a result of many factors, including those factors set forth in “Item\n3. Key Information — D. Risk Factors” and the section titled “Cautionary Note Regarding Forward-Looking Statements,”\nwhich you should review for a discussion of some of the factors that could cause actual results to differ materially from the results\ndescribed in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this annual\nreport.*\n\n* *\n\n**A.\nOperating Results**\n\n \n\n**Overview**\n\n \n\nWe\nare a regional entertainment-focused event management\nand marketing company based in Singapore that provides a full range of services including experiential marketing, artiste endorsement\nand management, movie premiere organizations, grand openings and concerts. In addition to our expertise in event and concert management,\nwe offer comprehensive value-added services tailored to meet specific client demands.\n\n \n\nWe\nspecialize predominantly in the organization and management of large-scale live events and concerts by renowned international artistes\nin Singapore and the region, and provide agency services for artiste endorsements. We go beyond conventional event management and offer\nvalue-added services such as media planning, public relations management, technical production planning, celebrity sourcing, celebrity\nengagement consultancy and event manpower support, a l tailored to the high standards that we set.\n\n \n\nWe\nset ourselves apart from other competitors in the industry by providing comprehensive solutions encompassing technical expertise and\ncreative input. This in turn mitigates the risks of operating in any single business segment.\n\n \n\n**Major\nFactors Affecting Our Performance**\n\n \n\nWe\nbelieve that the major factors affecting the results of our financial results include the following.\n\n \n\n**Market\ndemand and market penetration**\n\n \n\nThe\ndemand for live and experiential entertainment in regional markets is experiencing strong growth, driven by an increasingly youthful\nand culturally engaged population. Understanding and aligning with audience preferences is critical to sustained success. Regional nuances,\nsuch as language, cultural trends, religious sentiments, and local celebrities, greatly influence event turnout and brand engagement.\n\n \n\nOur\nasset-light business model and extensive network of vendors in these countries and regions allow us to expand to more cities quickly.\nOur experience ensure that we can adapt to different market demands, reduce overhead costs, and scale our operations efficiently. By\nleveraging local expertise and resources, we can seamlessly enter new markets, offering high quality events that meet the expectations\nof diverse audiences.\n\n \n\n**Competition\nand differentiation**\n\n \n\nThe\nregional entertainment and event management landscape is becoming increasingly competitive, with a surge of new entrants and from existing\nplayers across both the Live Entertainment and Agency business segments. Our market includes a diverse array of events management companies,\neach vying for market share in the regions where we operate. This environment demands that companies not only compete on pricing but\nalso on creativity, scale, and the ability to deliver seamless, end-to-end event solutions.\n\n \n\n32\n\n \n\n \n\nDifferentiation\nis therefore critical to standing out in a crowded market. One of our core competences lies in our ability to provide comprehensive solutions\nto our customers in respect of the organization and management of an event or concert. Our key management team has vast experience in\nthe organization and management of different kinds and types of events or concerts. As we are well-equipped with the relevant know-how\nand technical expertise associated with the organization and management of events and concerts, we can capitalize on such expertise and\nknow-how to develop and provide value-added input for our customers. This allows us to provide a service that is customized and tailor\nmade for any event or concert of our customers. We also assist our customers in customizing stage-related items for their event or concert\nbased on specifications provided by our customers.\n\n \n\n**Competitive\nadvantage**\n\n \n\nWe\nbelieve that a strong competitive advantage significantly impacts the financial performance of our industry. Key competitive advantages\ntypically revolve around a combination of expertise, relationships, and innovation.\n\n \n\nWe\nhave established a strong network of business relationships with key participants in the entertainment industry within Asia. Our management\nlong-standing experience in the industry has enabled us to establish a wide network of personal relationships with artiste managers globally,\nas well as other professional and technical teams in Singapore and South Korea, leading talent, crew and staff, and other key participants\nin the event and concert production and promotion industry, which have been crucial to our success. Additionally, we believe that one\nof the competitive advantages we have over our peers is that about 90% of our connections with artiste management companies are direct\nconnections, while the remaining 10% of our connections are indirect connections through third-party agents.\n\n** **\n\n**Results\nof Operations**\n\n** **\n\nThe\ntable below sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as\npercentages of our total revenue. This information should be read together with our consolidated financial statements and related notes\nincluded elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may\nbe expected for any future period.\n\n \n\n  \nFor the Years Ended \n\n  \nFebruary 29, 2024  \n\n**%**\n\n**Rev**\n  \n\n**February**\n\n**28, 2025**\n  \n\n**%**\n\n**Rev**\n  \nFebruary 28, 2026  \n\n**%**\n\n**Rev**\n \n\n  \nS$  \n   \nS$  \n   \nS$  \n  \n\nRevenue \n 1,290,951  \n 100.0  \n 1,013,482  \n 100.0  \n 2,147,134  \n 100.0 \n\nCost of revenue \n (1,025,516) \n (79.4) \n (884,883) \n (87.3) \n (1,320,170) \n (61.5)\n\nGross profit \n 265,435  \n 20.6  \n 128,599  \n 12.7  \n 826,964  \n 38.5 \n\n  \n    \n    \n    \n    \n    \n   \n\nDepreciation and amortization \n -  \n -  \n (185) \n N.M.  \n (27,105) \n 1.3 \n\nSales and marketing expenses \n -  \n -  \n -  \n -  \n (4,619,523) \n 215.1 \n\nOperating lease expenses \n (20,987) \n 1.6  \n (40,464) \n 4.0  \n (76,137) \n 3.5 \n\nGeneral and administrative expenses \n (210,899) \n 16.3  \n (514,879) \n 50.8  \n (2,379,860) \n 110.8 \n\nTotal operating expenses \n (231,886) \n 18.0  \n (555,528) \n 54.8  \n (7,102,625) \n 330.8 \n\n  \n    \n    \n    \n    \n    \n   \n\nOperating income (loss) \n 33,549  \n 2.6  \n (426,929) \n (42.1) \n (6,275,661) \n (292.3)\n\n  \n    \n    \n    \n    \n    \n   \n\nOther (expenses) income, net \n (201) \n N.M.  \n (25,521) \n (2.5) \n 172,951  \n 8.1 \n\n  \n    \n    \n    \n    \n    \n   \n\nNet income (loss) \n 33,348  \n 2.6  \n (452,450) \n (44.6) \n (6,102,710) \n (284.2)\n\n \n\n*N.M.:\nNot meaningful.\n\n \n\n33\n\n \n\n \n\n**Revenue**\n\n \n\nWe\ncurrently generate revenue exclusively from the Agency segment.\n\n \n\nFor\nthe years ended February 28, 2026 and February 28, 2025, our revenue was approximately S$2.1 million and S$1.0 million respectively,\nrepresenting an increase of approximately 111.9% primarily due to strategic enhancements to our celebrity agency business, which expanded\nour service offerings, strengthened client and celebrity partnerships, and enabled larger, multi-phase brand activation campaigns across\nthe region.\n\n \n\nFor\nthe years ended February 28, 2025 and February 29, 2024, our revenue was approximately S$1.0 million and S$1.3 million respectively,\nrepresenting a decrease of approximately 21.5% due to the Company took a prudent approach to focus on profitable transactions and timing\nof revenue recognition in line with business activities.\n\n \n\n**Cost\nof Revenue**\n\n \n\nOur\ncost of revenue is predominately pertaining to artiste fees, expenses incurred to set up for events and agency consultancy services.\n\n \n\nFor\nthe years ended February 28, 2026 and February 28, 2025, our cost of revenue was approximately S$1.3 million and S$0.9 million respectively,\nrepresenting an increase of approximately 49.2% primarily due to higher expenses associated with executing large-scale, multi-phase brand\nactivation campaigns and expanding our celebrity and influencer partnerships.\n\n \n\nFor\nthe years ended February 28, 2025 and February 29, 2024, our cost of revenue was approximately S$0.9 million and S$1.0 million respectively,\nrepresenting a decrease of approximately 13.7%. The lower cost of revenue is in line with the decrease in revenue.\n\n** **\n\n**Gross\nProfit and Gross Margin**\n\n \n\nGross\nprofit is total revenue minus total cost of revenue. Gross margin is defined as total gross profit, as a percentage of total revenue.\n\n \n\nOur\ngross profit grew by 543.1% from S$128,599 in 2025 to S$826,964 in 2026. Our gross margin was 12.7% in 2025, as compared to 38.5% in\n2026, primarily due to an expanded service offering with higher profit margin, compared to the predominantly agency-based services provided\nin the prior period.\n\n \n\nOur\ngross profit decreased by 51.6% from S$265,435 in 2024 to S$128,599 in 2025. Our gross margin was 20.6% in 2024, as compared to 12.7%\nin 2025, primarily due to lower profit margin of agency-based services provided during the year.\n\n \n\n**Depreciation\nand amortization**\n\n \n\nOur\ndepreciation expenses increased to S$27,105 for the year ended February 28, 2026, mainly due to the new office improvements depreciating\nin 2026.\n\n \n\n**Sales\nand Marketing Expenses**\n\n \n\nOur\nsales and marketing expenses increased to S$4,619,523 for the year ended February 28, 2026, mainly due to the business and relationship\ndevelopment and marketing to drive business growth throughout Southeast Asia after the IPO.\n\n \n\n**Operating\nLease Expenses**\n\n \n\nFor\nthe years ended February 28, 2026 and February 28, 2025, our operating lease expenses increased by S$35,673, or 88.2% to S$76,137 compared\nto S$40,464 in 2025. The increase is mainly due to higher rental rate and bigger space following the shift to our new office to accommodate\nbusiness expansion.\n\n \n\nFor\nthe years ended February 28, 2025 and February 29, 2024, our operating lease expenses increased by S$19,477, or 92.8% to S$40,464 compared\nto S$20,987 in 2024. The increase is mainly due to full year impact of operating lease for our office.\n\n \n\n34\n\n \n\n \n\n**General\nand Administrative Expenses**\n\n \n\nFor\nthe years ended February 28, 2026 and February 28, 2025, our general and administrative expenses increased by 362.2% from S$514,879\nin 2025 to S$2,379,860 in 2026. The increase was due to investments in team expansion to support client relationships and brand\npositioning, as well as one-off professional fees related to the Company’s transition to a public listing.\n\n \n\nFor\nthe years ended February 28, 2025 and February 29, 2024, our general and administrative expenses increased by 144.1% to S$514,879 compared\nto S$210,899 in 2024. The increase is mainly due to the increase in headcount and salary costs related as the Company expanded the team\nto assist in rebuilding and growing the business.\n\n \n\n**Other\nIncome, Expenses, Gains and Losses**\n\n \n\nOur\ninterest income, interest expense, and foreign exchange (loss) gain was a net expense of S$25,521 in 2025 compared to net income of\nS$172,951 in 2026. The higher non-operating income was mainly due to increased interest income and a reduction in interest expense\nresulting from the full repayment of the Company’s bank loan and working capital loans in 2026.\n\n \n\nOur\ninterest income, interest expense, and foreign exchange (loss) gain was a net expense of S$201 in 2024 compared to S$25,521 in 2025.\nThe higher non-operating expense was mainly due to interest incurred for a bank loan and working capital loans obtained from two investors.\n\n \n\n**Segment\nProfitability Metric**\n\n \n\nWe\nhave two reportable segments, namely, Live Entertainment and Agency. The chief operating decision maker (“CODM”), comprising\nour senior management team, reviews the performance of each segment based on revenue and certain key operating metrics of the operations\nand uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment.\n\n \n\nFor\nthe years ending February 28, 2025 and February 28, 2026, we reported revenue exclusively from the Agency segment. We have adopted a cautious\napproach and focused on developing the business within the Agency segment. This differed from the Live Entertainment segment, which demands\nsignificant upfront investment in capital resources before revenue can be generated.\n\n** **\n\n**B.\nLiquidity and Capital Resources**\n\n \n\nIn\nassessing the Company’s liquidity, the Company monitors and evaluates its cash and cash equivalent and its operating and capital\nexpenditure commitments.\n\n \n\nThe Company’s liquidity needs are to meet its\nworking capital requirements, operating expenses and capital expenditure obligations. Cash flow from operations and capital contributions\nhave been utilized to finance the working capital requirements of the Company. For the year ended February 28, 2026, the Company had a\nnet loss of S$6,102,710 and recorded net cash used in operating activities of S$15,825,468. As of February 28, 2026, the Company had S$2,375,293\nin cash and cash equivalents. Cash and cash equivalents comprise cash on hand and bank deposits placed with banks which are unrestricted\nas to withdrawal and use and have original maturities of three months or less.\n\n \n\nManagement has commenced a strategy to raise debt\nand equity. However, there can be no certainty that these additional financings will be available on acceptable terms or at all. If management\nis unable to execute this plan, there would likely be a material adverse effect on the Company’s business.\n\n \n\nBased on the above factors and in consideration of\nthe Company’s business plans and forecasts, management has a reasonable expectation that the Company has sufficient funds to meet\nits operating and capital expenditure needs and obligations in the next 12 months.\n\n \n\n35\n\n \n\n \n\n**Cash\nFlows**\n\n \n\nThe\nfollowing table sets forth a summary of our cash flows for the periods indicated:\n\n \n\n  \nFor the Years Ended \n\n  \nFebruary 29,\n2024  \nFebruary 28,\n2025  \nFebruary 28,\n2026 \n\n  \nS$  \nS$  \nS$ \n\nNet cash (used in) generated from operating activities \n (9,517) \n 428,469  \n (15,825,468)\n\nNet cash used in investing activity \n -  \n (2,216) \n (286,096)\n\nNet cash (used in) generated from financing activities \n (39,413) \n (161,010) \n 18,218,421 \n\nNet (decrease) increase in cash and cash equivalents \n (48,930) \n 265,243  \n 2,106,857 \n\nCash and cash equivalents, beginning of year \n 52,123  \n 3,193  \n 268,436 \n\nCash and cash equivalents, end of year \n 3,193  \n 268,436  \n 2,375,293 \n\n \n\n**Cash\nFlows from Operating Activities**\n\n \n\nNet\ncash used in operating activities in 2026 consisted of S$6.10 million of net losses, a S$0.103 million positive impact from non-cash\nitems, and a S$9.83 million net cash outflow in change of assets and liabilities due to the timing of when amounts came\ndue.\n\n \n\nNet\ncash used in operating activities in 2025 consisted of S$0.45 million of net losses, a S$0.045 million positive impact from non-cash\nitems, and a S$0.84 million net cash inflow in change of assets and liabilities due to the timing of when amounts came due.\n\n \n\nNet\ncash used in operating activities in 2024 consisted of S$0.033 million of net losses, a S$0.097 million positive impact from non-cash\nitems, and a S$0.14 million net cash outflow in change of assets and liabilities due to the timing of when amounts came due.\n\n \n\n**Cash\nFlows from Investing Activities**\n\n \n\nNet\ncash used in investing activities in 2026 consisted of S$286,096, an increase from S$2,216 in 2025, primarily arising from\nexpenditures for new office improvements and the purchase of office equipment to support the team expansion following our\nIPO.\n\n \n\nNet\ncash used in investing activities in 2025 consisted of S$2,216, an increase from nil in 2024, primarily arising from the purchase of\nproperty and equipment to support the team expansion.\n\n \n\nThere\nwasn’t cash used in investing activities in 2024.\n\n \n\n**Cash\nFlows from Financing Activities**\n\n \n\nNet\ncash provided by financing activities in 2026 consisted of S$19.2 million in net proceeds from our IPO in May 2025 after IPO-related\nexpenses, S$0.68 million repayment of short-term advances from directors as well as S$0.28 million in repayment of a short-term loan.\n\n \n\nNet\ncash used in financing activities in 2025 consisted of S$0.79 million deferred expenses for IPO, S$0.63 million in net proceeds from\na short-term loan and short-term advances from directors.\n\n \n\nNet\ncash used in financing activities in 2024 consisted of S$0.39 million in repayment of a short-term loan and short-term advances from\ndirectors.\n\n** **\n\n**Contractual\nCash Obligations**\n\n \n\nOur\noperating lease obligations, including imputed interest, were S$436,404 as of February 28, 2026, of which S$170,436 is payable within\nthe next 12 months. For further information on our leases, refer to Note 9 – Leases in the accompanying notes to consolidated financial\nstatements included in “Item 17. Financial Statements.”\n\n \n\n**C.\nResearch and Development, Patents and Licenses, etc.**\n\n \n\nSee\n“Item 4. Information on the Company—B. Business Overview—Licenses.”\n\n \n\n**D.\nTrend Information**\n\n \n\nOther\nthan as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for\nthe year ended February 28, 2026 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability,\nliquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating\nresults or financial conditions.\n\n \n\n36\n\n \n\n \n\n**E.\nCritical Accounting Estimates**\n\n \n\nWe\nprepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions\nthat affect our reporting of, among other things, assets and liabilities, disclosure of contingent assets and liabilities and revenue\nand expenses. We regularly evaluate these estimates and assumptions based on the most recently available information, our own historical\nexperiences and other factors that we believe to be relevant under the circumstances. Since our financial reporting process inherently\nrelies on the use of judgments, estimates and assumptions, our actual results could differ from what we expect.\n\n \n\nWe\nbelieve that the following accounting policies reflect the significant judgments, estimates and assumptions used in the preparation of\nour consolidated financial statements. For additional information, see the disclosure included in Note 2 – Summary of Significant\nAccounting Policies in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.”\n\n \n\n*Accounts\nreceivable and allowance for expected credit losses*\n\n \n\nAccounts\nreceivable mainly represent amounts due from customers that meet the revenue recognition criteria. These accounts receivables are recorded\nnet of any allowance for credit losses and specific customer credit allowances. The Company maintains an allowance for estimated credit\nlosses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses\nadjusted to take into account current market conditions and the Company’s customers’ financial condition, the receivable\namount in dispute, and the current receivables aging and current payment patterns, over the contractual life of the receivable. Forward-looking\ninformation is also considered in the evaluation of current expected credit losses. The Company writes off the receivable when it is\ndetermined to be uncollectible.\n\n \n\n*Revenue\nrecognition*\n\n \n\nThe\nCompany accounts for its revenue under ASC Topic 606, Revenue from Contracts with Customers. The five-step model defined by ASC Topic\n606 requires the Company to:\n\n \n\n \n1.\nidentify\nits contracts with customers;\n\n \n2.\nidentify\nits performance obligations under those contracts;\n\n \n3.\ndetermine\nthe transaction prices of those contracts;\n\n \n4.\nallocate\nthe transaction prices to its performance obligations in those contracts; and\n\n \n5.\nrecognize\nrevenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised services are transferred\nto the client in an amount that reflects the consideration expected in exchange for those services.\n\n \n\nRevenues\nare recognized when persuasive evidence of an arrangement exists, service has occurred, and all performance obligations have been performed\npursuant to the terms of the agreement, the sales price is fixed or determinable and collectability is reasonably assured. Our revenue\nagreements generally do not include a right of return in relation to the delivered products or services. Depending on the terms of the\nagreement and the laws that apply to the agreement, control of the services may be transferred over time or at a point in time. Control\nof the services is transferred over time if our performance:\n\n \n\n \n-\nprovides\nall of the benefits received and consumed simultaneously by the client;\n\n \n-\ncreates\nand enhances an asset that the client controls as the Company performs; or\n\n \n-\ndoes\nnot create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance complete\nto date. If a service obligation is delivered over time, revenue is recognized over the period of the agreement by reference to progress\ntoward complete satisfaction of that service obligation. Otherwise, revenue is recognized at a point in time when service obligation\nis delivered to the client.\n\n \n\nLive\nentertainment\n\n \n\nLive\nentertainment/concert revenue is generated through one-time or non-recurring projects with existing or new customers. Revenue from artist\nperformance and sponsorship revenue where the Company undertook the role of concert organizer, and which the Company is acting as an\nagent.\n\n \n\nRevenue\nfrom live entertainment/concert performances and other special events is recognized when the events take place. Revenue from an one-time\nevent is recognized if (i) persuasive evidence of an arrangement exists; (ii) the event has occurred; (iii) the price is fixed or determinable;\nand (iv) collectability is reasonably assured.\n\n \n\n37\n\n \n\n \n\nRevenue\nfrom sponsorships associated with event management. Sponsorship advances are deferred until earned pursuant to the sponsorship agreement\nand are presented as contract liabilities on the statement of financial position. Revenue is recognized at point in time when the Company\nhas fulfilled the performance obligation of the revenue contracts or recognized when services are rendered upon completion of events\nor services and when the Company has no remaining obligation to perform.\n\n \n\nAgency\n\n \n\nThe\nCompany brokers and supplies artistes to clients, generating revenue from their participation in events, advertisements, and various\nentertainment content projects. Additionally, the Company offers consultancy services to clients, assisting with event management and\nproviding infrastructure and logistical support. Revenue is recognized when the services are rendered upon completion of the events and\nwhen the Company has no remaining obligation to perform.\n\n \n\nThe\nadvances received from customers related to advance billing to customers based on contract, for which service has yet been completed.\n\n \n\n*Income\ntaxes*\n\n \n\nWe\naccount for income taxes using the liability method. We determine deferred tax assets and liabilities based on the difference between\nthe financial reporting and tax bases of assets and liabilities using enacted tax rates that are in effect in the period in which the\ndifferences are expected to reverse. Determining the likelihood that our net deferred tax assets will be realized from future taxable\nincome may require certain judgment. The accounting for deferred tax represents our best estimates of certain future events. We record\na valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some\nportion, or all, of the deferred tax assets will not be realized. Changes in estimates, due to unanticipated events or otherwise, could\nhave a material effect on our consolidated financial statements.\n\n \n\n**Recent\naccounting pronouncements**\n\n \n\nSee\nthe discussion of the recent accounting pronouncements contained in Note 2 to the consolidated financial statements, “Summary of\nSignificant Accounting Policies”."}