Alpha DX receives letter of statutory demand for S$1.9m

LEARNING solutions company Alpha DX Group said on Saturday (March 5) that it has received a letter of statutory demand from the lawyers for Kydon Holdings, in relation to payment of a sum of S$1.9 million.

It noted in the bourse filing that Kydon Holdings has demanded payment within 3 weeks from the date of the letter on March 4, failing which it may commence winding up proceedings against Alpha DX.

The letter of statutory demand is for fees allegedly owed by Alpha DX. Kydon Holdings is seeking payment of the sum of S$1,900,377.08 relating to the remaining consideration and interest charges for the acquisition of Kydon Learning Systems Institute - now known as Zionext.

Alpha DX said it is seeking legal advice to determine its next course of action.

The company had previously announced on Feb 25 that it received a letter of demand from Kydon Holdings - dated Feb 18 - relating to payment of S$1,900,937.75 for the remaining consideration and interest charges for the acquisition of equity interest in Zionext.

The earlier letter had demanded the company to repay the outstanding sum by Feb 28, failing which Kydon Holdings would commence legal proceedings against the company.

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Two independent non-executive directors - Chang Chi Hsung and Max Ng Chee Weng - resigned on Feb 25, which was announced by Alpha DX on Feb 28.

It indicated that the directors had differences with management on the administration and the timeliness of certain disclosure and announcement of matters to shareholders, with reference to the Feb 25 announcement of the letter of demand from Kydon Holdings.

The company had also received another letter of demand from its sponsor in February.

It said on Mar 2 - in response to queries from the Singapore Exchange (SGX) - that it has also received a letter of demand on Feb 11 from lawyers representing its sponsor PrimePartners Corporate Finance (PPCF) for an outstanding amount of S$604,844.76.

However, this letter was collected from its office only on Feb 25 - following an email from the lawyers on the same day - due to work from home arrangements. Alpha DX noted that this amount together with the amount of claim from Kydon Holdings under the Feb 25 announcement did not exceed 20 per cent of the company's net asset value.

"Hence the company believed that an immediate announcement on the PPCF letter was not warranted," Alpha DX said.

It also announced on Mar 2 that it had received a writ of summons and statement of claim filed by PPCF in the High Court of Singapore, with PPCF claiming a sum of S$604,844.76 in unpaid sums payable under agreements between the 2 companies and S$111,789.75 for late interest charges. It has also received a notice of termination of continuing sponsorship from PPCF.

Alpha DX had said in its response to SGX on Mar 2 that "the board has assessed that the group is able to continue as a going concern".

It noted that the group had short-term liabilities of around S$7.3 million as at end-January, which could be partially satisfied by its cash and cash equivalents of S$3.4 million.

It added that it is negotiating to convert liabilities of around S$2 million into shares, and it is also discussing with creditors to restructure its short-term liabilities by extending the due date.

Shares of Alpha DX closed unchanged at S$0.112 on Friday.