SDAI Limited Q3 2025 Financial Results: A Deep Dive for Investors

SDAI Limited, listed on the Catalist board of the Singapore Exchange, has released its unaudited condensed interim financial statements for the third quarter and nine months ended 30 September 2025. Below, we dissect the key numbers, operational highlights, and significant risk factors, providing investors with a structured view of the company’s current standing.

Key Financial Metrics and Performance Table

Historical Performance and Trends

SDAI Limited continues to operate at a loss, but the Q3 2025 numbers show a narrowing of losses compared to the same period last year. Year-to-date, the group reported a net loss of S\$2.08 million for the nine months ended 30 September 2025, slightly higher than the S\$2.04 million loss in the prior period. This persistent underperformance is reflected in the company’s negative equity (S\$9.28 million as at 30 September 2025, down from S\$7.43 million at the end of 2024) and negative net asset value per share of S\$-1.96 cents.

Balance Sheet and Cash Flow Overview

Key points from the balance sheet:

• Negative Working Capital: The group’s current liabilities (S\$11.23 million) far exceed its current assets (S\$1.78 million), resulting in a negative working capital of S\$9.45 million.
• Cash Position: Cash and cash equivalents increased to S\$1.27 million at quarter-end, up S\$0.48 million from end-2024, mainly due to new borrowings.
• Borrowings: Loans totaling S\$9.2 million have been reclassified as current due to their maturity within 12 months, creating significant short-term refinancing pressure. The company has renegotiated loan maturities to 30 June 2026, but this is subject to successful execution and future fundraising.

Exceptional Items and Noteworthy Events

• Exceptional Expenses: The results benefited from a S\$0.26 million foreign exchange gain, reversing last year’s large forex losses. However, no impairment of property, plant, and equipment was recognized this quarter, following significant impairments in FY2024.
• Unusual Fund Flows & Related Party Transactions: There were no significant related party transactions in the current period. However, several loans were obtained from directors and investors, some bearing equity conversion features (though not currently dilutive as conversion terms are not fixed).
• Regulatory and Legal Events: The company continues to be affected by unresolved regulatory and governance issues, including a trading suspension since July 2021, special audits, and ongoing compliance requirements set by SGX RegCo. Major findings included past payroll irregularities and unauthorized transactions, with the company now under close regulatory scrutiny and required to implement internal control improvements.
• Corporate Actions: No dividends, share buybacks, or placements were declared. No treasury shares or convertible issues are currently dilutive.

Business Developments and Outlook

SDAI has shifted its kitchen business to Hong Kong after the compulsory liquidation of a key Singapore unit. Meanwhile, it is actively entering the biotechnology sector, having received regulatory approval to market its proprietary skincare line in China. The new biotech business is in its infancy and not yet contributing significant revenue.

The company’s outlook remains challenged. Management acknowledges that ongoing negative working capital, persistent losses, and unresolved regulatory issues cast doubt on its status as a going concern. The group’s ability to continue hinges on executing turnaround plans, securing fresh financing, and resolving all SGX compliance matters.

Chairman’s Statement

No explicit Chairman’s statement was included in this interim report. The Board, however, expresses confidence that the Group will be able to meet its obligations as they fall due, provided it can complete restructuring initiatives and secure additional financing.

Dividend Policy and Remuneration

• No Dividends: No dividend was declared for Q3 2025, nor in the prior year, due to continued losses and accumulated deficits.
• Directors’ Remuneration: Directors’ fees for the nine months totaled S\$197,500, slightly higher than the prior year.

Conclusion and Investment Recommendations

Overall Assessment: SDAI Limited’s financial performance remains weak, despite slight improvements in revenue and a narrowing of quarterly losses. The company is burdened by negative equity, large short-term liabilities, unresolved regulatory issues, and a challenging turnaround in its core business segments. The new biotechnology venture is promising but at a very early stage and does not yet offset the group’s structural weaknesses.

Recommendation for Existing Shareholders:
Given the persistent losses, negative working capital, and unresolved compliance issues, existing investors should exercise caution. Unless one has a high risk appetite or strong confidence in the biotechnology pivot and regulatory resolution, it may be prudent to reduce exposure or hold only a small speculative position.

Recommendation for Prospective Investors:
Those not currently holding shares should avoid initiating new positions until there is tangible evidence of successful restructuring, regulatory clearance (including trading resumption), and clear, sustainable profitability from new business lines. The risks currently far outweigh the potential rewards.

Disclaimer: This article is based strictly on the company’s latest quarterly report and does not constitute financial advice. Investors should conduct their own due diligence and consider their risk tolerance before making investment decisions.

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