20-F: Fitness Champs Holdings Reports FY2025 Results

Fitness Champs Holdings Limited announced its fiscal year 2025 results, showing a decrease in revenue and a net loss, alongside increased operating expenses.

Summary

• Fitness Champs Holdings Limited reported a total revenue of S$4.150 million (US$3.232 million) for the year ended December 31, 2025, a decrease of 1.6% from S$4.216 million in 2024.
• The company experienced a net loss of S$1.365 million (US$1.063 million) for the year ended December 31, 2025, compared to a net income of S$172,000 in 2024.
• Cost of revenue increased by 12.0% to S$3.015 million (US$2.348 million), primarily due to higher hourly rates paid to coaches.
• Gross profit margin declined from 36.1% in 2024 to 27.3% in 2025, attributed to increased coaching fees and lower student enrollments.
• General and administrative expenses significantly increased by 74.5% to S$2.274 million (US$1.771 million) in 2025, driven by higher legal, professional, and staff costs.
• The company received a notice from Nasdaq for failing to meet the minimum bid price requirement, which was addressed through a share consolidation.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the reported net loss, declining revenue, shrinking profit margins, and increased operating expenses, coupled with Nasdaq listing concerns and a class action lawsuit.

Positives

• The company's revenue remains diversified across government (41.3%) and private (58.7%) sectors.
• Despite a net loss, the company's cash and cash equivalents increased significantly to S$1,990,000 (US$1,549,000) as of December 31, 2025, from S$314,000 in 2024, largely due to financing activities.
• The company has a history of securing government contracts, being one of five certified providers for the SwimSafer program in Singapore.

Negatives

• The company reported a net loss of S$1.365 million for FY2025, a significant downturn from a net profit of S$172,000 in FY2024.
• Revenue decreased by 1.6% to S$4.150 million in FY2025.
• Gross profit margin contracted sharply from 36.1% in FY2024 to 27.3% in FY2025.
• General and administrative expenses more than doubled from S$1.303 million in FY2024 to S$2.274 million in FY2025.
• The company received a notice from Nasdaq for failing to meet the minimum bid price requirement, indicating potential delisting risks.
• The company has identified a material weakness in its internal controls related to insufficient financial reporting and accounting personnel with U.S. GAAP knowledge.

Risks

• The company's operations are subject to regulatory requirements in Singapore, and failure to obtain or renew registrations could lead to suspension.
• Enforceability of restrictive covenants with coaches poses a risk of competition from former coaches.
• Infringement of intellectual property related to course materials and training methodology is a potential risk.
• Reliance on students from primary schools under the SwimSafer program makes the company vulnerable to changes in MOE contracts or certifications.
• The company's brand and reputation are critical, and any damage could adversely affect student enrollment and financial performance.
• The company's coaches' actions or inactions could lead to claims, litigation, or regulatory impacts.
• Unauthorized disclosure of student and staff data could result in litigation and reputational damage.
• Advertising and marketing campaigns may not translate into increased enrollments or revenue.
• The company's business operations are susceptible to adverse weather conditions, particularly for outdoor classes.
• Natural disasters, pandemics, or other catastrophic events could adversely affect operations and financial performance.
• The company operates in a competitive market and may lose market share if it cannot compete effectively.
• Changes in laws, regulations, and government policies may increase costs.
• The company is exposed to the risk of accidents and injuries during swimming lessons, which could lead to liabilities.
• The company's executive officers have no prior experience operating a U.S. public company, posing risks to compliance.
• Failure to maintain effective internal controls could lead to inaccurate financial reporting, fraud, and loss of investor confidence.
• The company received a notice from Nasdaq for failing to meet listing requirements, with potential delisting consequences.
• The trading price of the company's shares has been volatile, increasing the risk of substantial losses for investors.
• The company is subject to a securities class action lawsuit alleging securities fraud.

Future Outlook

The company's future outlook is impacted by the normalization of student participation levels post-COVID-19, increased operating costs, and the need to manage regulatory compliance and Nasdaq listing requirements. The company plans to focus on geographical expansion and potential acquisitions to drive growth.

Management Comments

• Management notes that the decline in gross profit margin was primarily attributable to lower class ratios and a reduction in the number of MOE contracts, mainly due to the normalization of demand following the COVID-19 pandemic.
• Management attributes the increase in general and administrative expenses to higher professional service fees incurred in connection with ongoing compliance and corporate governance requirements as a publicly listed company.
• Management states that the company intends to defend vigorously against the securities class action lawsuit.

Industry Context

StockSavvy.ai notes that the sports education sector, particularly swimming instruction, is sensitive to government policies and public health events. The normalization of post-pandemic demand and increased competition are key industry trends impacting companies like Fitness Champs Holdings.

Comparison to Industry Standards

• The company's gross profit margin of 27.3% for FY2025 is lower than the industry average for specialized sports education providers, which typically range from 35-50%, depending on scale and service mix.
• The significant increase in general and administrative expenses (74.5%) is higher than typical for companies of similar size in the sports education sector, suggesting potential inefficiencies or significant compliance burdens.
• The company's reliance on government contracts (41.3% of revenue) is a common strategy in Singapore's education sector, but it also introduces regulatory risk compared to companies with more diversified revenue streams.

Corporate Governance

Legal Proceedings

• A securities class action lawsuit was filed in April 2026 in the U.S. District Court for the Southern District of New York, alleging securities fraud between September 3, 2025, and September 23, 2025. The company denies the allegations and intends to defend vigorously.

Related Party Transactions

• Ms. Joyce Lee Jue Hui, the Executive Director and controlling shareholder, provided shareholder loans to the company to fund offering costs, with an outstanding balance of S$218,000 as of December 31, 2025. Additional advances of S$730,000 were provided in FY2025.
• Historically, Ms. Lee made salary payments, coaches fees, and company expenses directly, with the company transferring funds to her for these payments. This practice ceased in December 2023 for coach fees and salaries.

Stakeholder Impact

• Shareholders may experience volatility in share price due to market conditions and company performance, as well as potential dilution from future offerings.
• Employees, particularly coaches, are critical to operations; any inability to retain qualified staff could impact service delivery.
• Customers (students and parents) rely on the company's brand reputation and the quality of its swimming programs.

Next Steps

• Focus on geographical expansion into new markets in the region.
• Expand business through acquisitions, joint ventures, and/or strategic alliances.
• Address Nasdaq listing requirements and regain compliance.
• Defend vigorously against the securities class action lawsuit.
• Continue to manage costs and improve financial oversight.

Key Dates

Recommendation

The company's financial performance has deteriorated significantly, with a shift from profit to loss, declining revenue, and shrinking margins. Increased operating expenses, coupled with a material weakness in internal controls and Nasdaq listing concerns, present substantial risks. The ongoing class action lawsuit further adds to the uncertainty. While there are plans for expansion, the current financial health and operational challenges suggest a sell recommendation.

Keywords

Fitness Champs Holdings, SEC Filing, Form 20-F, Annual Report, Singapore, Swimming Lessons, Sports Education, SwimSafer Program, Financial Results, Nasdaq, Class A Ordinary Shares, Class B Ordinary Shares