Business Context and Reporting Period
Company: Fitness Champs Holdings Ltd (Cayman Islands)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: The Company is a sports education provider specializing in swimming lessons in Singapore, operating through subsidiaries Fitness Champs (school-based programs) and Fitness Aquatics (private lessons). It recently expanded into Dubai. The Company is listed on the Nasdaq Capital Market under the symbol "FCHL."
Capital Structure: As of December 31, 2025, the Company had 17,000,000 ordinary shares outstanding. Subsequent to the reporting period, the Company effected a 15-for-1 reverse share split (February 2026) and a 30-for-1 reverse share split (May 2026), resulting in approximately 37,778 ordinary shares outstanding (Class A and Class B) as presented retrospectively in the filing.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (S$'000) | 2025 (US$'000) | 2024 (S$'000) |
|---|---|---|---|
| Revenue | 4,150 | 3,232 | 4,216 |
| Gross Profit | 1,135 | 884 | 1,522 |
| Gross Margin | 27.3% | 27.3% | 36.1% |
| Operating Loss | (1,472) | (1,147) | 46 |
| Net Loss | (1,365) | (1,063) | 172 |
| Cash & Equivalents (End of Period) | 1,990 | 1,549 | 314 |
| Total Debt (Bank Borrowings) | 398 | 310 | 460 |
| Working Capital | 547 | 425 | (266) |
Note: US$ figures are translated at the rate of US$1.00 = S$1.2841.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased by 1.6% (S$66,000) to S$4.15 million. Both Government sector (SwimSafer program) and Private sector revenues declined due to lower enrollment levels and the normalization of demand following the post-pandemic backlog.
- Profitability Deterioration: The Company shifted from a net profit of S$172,000 in 2024 to a net loss of S$1.365 million in 2025. Operating expenses increased significantly to S$2.607 million (up 76.6% from 2024), driven by higher legal/professional fees for public company compliance, increased staff costs, and a one-off stakeholder engagement event.
- Margin Compression: Gross margin fell from 36.1% to 27.3%. This was primarily caused by a 13.9% increase in coaches' fees (S$322,000) despite lower revenue, and reduced class sizes.
- Liquidity Improvement: Cash and cash equivalents increased significantly from S$314,000 to S$1.99 million, bolstered by S$2.127 million in proceeds from the issuance of share capital (IPO and follow-on offering) and a reduction in director loans.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Management Commentary
Management expects government sector revenues to stabilize at pre-pandemic levels as the backlog of students clears. The Company plans to fund future capital expenditures and working capital through existing cash balances and proceeds from its IPO and follow-on offering. Expansion into Dubai is underway.
Material Risks
- Nasdaq Listing Compliance: The Company received a notice in November 2025 regarding failure to meet the minimum bid price requirement ($1.00). It executed a 15-for-1 reverse split in March 2026 and a 30-for-1 reverse split in May 2026 to regain compliance. There is no assurance the price will not fall below requirements again.
- Internal Controls: Management identified a material weakness in internal control over financial reporting due to a lack of personnel with sufficient U.S. GAAP expertise. The Company is engaging external consultants to address this.
- Legal Proceedings: A securities class action lawsuit was filed in April 2026 alleging securities fraud related to the IPO period. The outcome is uncertain and could result in significant costs.
- Concentration Risk: Approximately 41% of revenue is derived from the government's SwimSafer program. Failure to renew this contract would materially impact operations.
Unusual Items
- Related Party Transactions: Significant loans were provided by the controlling shareholder (Ms. Lee) to fund offering costs. As of the report date, the outstanding balance of S$218,000 was fully repaid.
- Share Capital Restructuring: Multiple reverse share splits and re-designations of share classes (Class A and Class B) occurred in 2026 to maintain listing status and adjust capital structure.
Investor Verification Checklist
- Listing Status: Verify current Nasdaq compliance status following the May 2026 reverse split and monitor for any future delisting notices.
- Internal Controls: Review the Company's progress in remedying the material weakness in internal controls and the associated costs of external consultants.
- Legal Exposure: Monitor the status of the securities class action lawsuit filed in April 2026 and potential financial impact.
- Revenue Normalization: Assess whether the decline in government sector revenue is a permanent structural change or a temporary normalization post-pandemic.
- Related Party Dependence: Confirm the terms of any future financing from the controlling shareholder and the independence of the Company's operations.