LEARNING solutions company Alpha DX Group flagged uncertainty over its ability to continue as a going concern, in its response to queries from the Singapore Exchange (SGX) on Tuesday (Mar 15).

The company noted that since its previous going-concern assessment on Mar 2, it has received a letter of statutory demand, and negotiations with its creditors have either deteriorated or not yielded desired outcomes.

Alpha DX had on Mar 4 said it received a letter of statutory demand from Kydon Holdings over the payment of a sum of S$1.9 million, relating to the remaining consideration and interest charges for the acquisition of Kydon Learning Systems Institute - now known as Zionext.

It also made an application to Singapore's High Court for the grant of a moratorium under Section 64 of the Insolvency Restructuring and Dissolution Act, as a short-term measure in order to allow the company time to resolve its cash flow issues, the company said.

Its board of directors expects the company will not be able to continue operating on a going-concern basis unless the group receives a fresh injection of funds.

The company noted that its cash and cash equivalents of S$3.4 million, while able to partially satisfy its short-term liabilities, is not sufficient to cover all its short-term liabilities of S$7.3 million.

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By Dec 31, 2022, while the company may be able to obtain an additional S$5.3 million to S$5.5 million in cash inflows if it can restructure its short-term liabilities into periodic payments, the group also expects it will incur around S$9.2 million in net cash outflows.

As for its in-principle agreement to convert liabilities of S$1.1 million into shares, the company is renegotiating settlement terms with the creditor, after the trading of the company's shares were suspended.

Alpha DX had on Mar 11 requested for a trading suspension, until there is "clarity on the affairs in the company", including its ability to operate as a going concern.

The company noted that it is discussing with potential investors and with controlling shareholder Didi Investments for a further injection of funds to resolve its current cash flow issues, although the negotiations "are not conclusive at this juncture".

Alpha DX had previously received a notice of compliance from SGX RegCo after 4 of its directors quit over the span of 2 weeks. Earlier, the company had also received a termination notice and a writ of summons from its sponsor PrimePartners Corporate Finance over unpaid sums and late interest charges.

Alpha DX last traded at S$0.112 before a trading halt was called on Mar 7.

READ MORE:

• SGX RegCo slaps Alpha DX with compliance notice after 4 directors quit over a fortnight

• 2 more Alpha DX directors resign

• Alpha DX receives S$1.9m letter of demand from vendor