Sentage Holdings Inc. Announces Financial Results for Fiscal Year 2021

Rhea-AI Summary

Sentage Holdings Inc. (SNTG) reported a 37.1% decrease in total operating revenue, totaling $2.26 million for the fiscal year 2021, down from $3.59 million in 2020. The company experienced a net loss of $1.09 million, compared to a net income of $1.59 million the previous year. The loss per share was $0.09, a decline from earnings of $0.16 per share in 2020. Increased SG&A expenses rose by 115% to $3.04 million, largely due to IPO-related costs. Cash and cash equivalents increased to $10.78 million.

Positive

• Cash and restricted cash increased significantly to $10.78 million from $0.14 million in 2020.
• Net cash provided by financing activities was $16.40 million for fiscal year 2021, a positive shift from net cash used in financing activities in the prior year.

Negative

• Total operating revenue declined by 37.1% to $2.26 million due to fully completed servicing agreements.
• The company reported a net loss of $1.09 million, a turnaround from net income of $1.59 million in fiscal year 2020.
• Selling, general and administrative expenses surged by 115% to $3.04 million, primarily due to IPO costs.
• Net cash used in operating activities was $0.38 million, contrasting with net cash generated in 2020.

SHANGHAI, July 18, 2022 /PRNewswire/ -- Sentage Holdings Inc. (the "Company", "we", "our") (Nasdaq: SNTG), a Cayman Islands company that offers a comprehensive range of financial services across consumer loan repayment and collection management, loan recommendation, and prepaid payment network services, through its China-base operating entities, today announced its financial results for the fiscal year ended December 31, 2021. The following summarizes such financial results.

Financial Highlights for Fiscal Year 2021

• Total operating revenue was $2.26 million for fiscal year 2021, compared with $3.59 million for fiscal year 2020, representing a 37.1% decrease, primarily due to the fact that the outstanding servicing agreements under the consumer loan repayment and collection management business were fully completed in fiscal year 2021 and revenues from this business were significantly reduced in fiscal year 2021.
• Net loss was $1.09 million for fiscal year 2021, compared with net income of $1.59 million for fiscal year 2020.
• Basic and diluted loss per share was $0.09 for fiscal year 2021, compared with basic and diluted earnings per share of $0.16 for fiscal year 2020.

Impact of the COVID-19 Pandemic

In early 2022, the Omicron variant of COVID-19 spread in China, especially in Jilin Province, Shenzhen and Shanghai where strict lockdowns were imposed.  The Sentage Operating Companies' business facilities in Shanghai, China, were temporarily closed starting from April 2022 to the first week of June 2022, as a result of local government's efforts to contain the resurgence of the COVID-19.  A COVID-19 resurgence may again give rise to economic downturns and other significant changes in regional and global economic conditions. As a result of COVID-19, borrowers' default and delinquency risks might increase as they experience unemployment or reduced income. Any higher default and delinquency risks may increase our operating costs and require us to dedicate more resources to maintain our current collection rate for the loan repayment and collection management business and may pose risk-management challenges for our loan recommendation business. If the COVID-19 situation deteriorates, our service capacity, operational efficiency and results of operations may be adversely affected.

Financial Results for Fiscal Year 2021

Revenues

Total operating revenue decreased by $1.33 million, or 37.1%, to $2.26 million for fiscal year 2021, from $3.59 million for fiscal year 2020. The decrease in revenues was primarily due to the fact that the outstanding servicing agreements under the consumer loan repayment and collection management business were fully completed in fiscal year 2021 and revenues from this business were significantly reduced in fiscal year 2021.

Selling, General and Administrative Expenses 

Selling, general and administrative expenses increased by $1.63 million, or 115%, to $3.04 million for fiscal year 2021, from $1.41 million for fiscal year 2020. This increase was mainly due to the fees incurred in connection with our initial public offering.

Other Income (Expenses) 

Net other expense was $56,931 for fiscal year 2021, an increase of $56,577 from net other expense of $354 for fiscal year 2020. This increase was due to an additional asset impairment loss in fiscal year 2021.

Provision for Income Taxes 

Provision for income taxes decreased by $0.33 million, or 56.6%, to $0.26 for fiscal year 2021, from $0.59 million for fiscal year 2020. This decrease was due to our decreased taxable income.

Net Income/(Loss)

Net loss was $1.09 million for fiscal year 2021, compared with net income of $1.59 million for fiscal year 2020.

Earnings/(Loss) Per Share

Basic and diluted loss per share was $0.09 for fiscal year 2021, compared with basic and diluted earnings per share of $0.16 for fiscal year 2020.

Cash and Cash Equivalents

As of December 31, 2021, the Company had cash and restricted cash of $10.78 million, compared with $0.14 million as of December 31, 2020.

Cash Flow

Net cash used in operating activities was $0.38 million for fiscal year 2021, compared with net cash provided by operating activities of $0.47 million for fiscal year 2020.

Net cash used in investing activities was $5.52 million for fiscal year 2021, compared with $nil for fiscal year 2020.

Net cash provided by financing activities was $16.40 million for fiscal year 2021, compared with net cash used in financing activities of $0.58 million for the same period of last year.

About Sentage Holdings Inc.

Sentage Holdings Inc., headquartered in Shanghai, China, is a financial service provider that offers a comprehensive range of financial services which primarily include consumer loan repayment and collection management, loan recommendation, and prepaid payment network services, through its China-based operating entities. Leveraging the Company's strategic partner relationships and proprietary valuation models and technologies, it is committed to working with its clients to understand their financial needs and challenges and offer customized services to help them meet their financial objectives. For more information, please visit the company's website at ir.sentageholdings.com.

Forward-Looking Statement

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review risk factors that may affect its future results in the Company's registration statement. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's services and economic activity in general. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected.

For more information, please contact:

Sentage Holdings Inc.
Investor Relations Department 
Email: ir@sentageholdings.com

Ascent Investor Relations LLC
Tina Xiao
President
Tel: +1 917-609-0333
Email: tina.xiao@ascent-ir.com

SENTAGE HOLDINGS INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	As of December 31,
	2020				2021
	USD				USD
ASSETS
Current assets
Cash and cash equivalents	$	117,434			$	10,753,118
Restricted cash		22,948				30,269
Loan receivable		-				5,500,000
Accounts receivable, net		1,221,844				403,708
Deferred initial public offering costs		765,885				-
Prepaid expenses and other current assets		383,041				515,062
Total current assets		2,511,152				17,202,157
Non-current assets
Plant and equipment, net		123,672				120,280
Intangible assets, net		61,797				30,547
Deferred tax assets		87,967				13,724
Total non-current assets		273,436				164,551
Total assets	$	2,784,588			$	17,366,708

 

 

SENTAGE HOLDINGS INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
	As of December 31,
	2020				2021
	USD				USD
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	4,912			$	2,743
Contract liabilities		154,106				-
Accrued expenses and other current liabilities		336,467				379,991
Total current liabilities		495,485				382,734
Non-current liability
Due to a related party, non-current		1,437,661				161,020
Total non-current liability		1,437,661				161,020
Total liabilities		1,933,146				543,754
Shareholders' equity
Ordinary shares, $0.001 par value, 50,000,000 shares authorized,   14,000,000 shared issued and outstanding*		10,000				14,000
Additional paid in capital		38,419,832				55,327,885
Statutory reserves		-				166,038
Accumulated deficit		(37,639,385)				(38,898,664)
Accumulated other comprehensive income		60,995				213,695
Total shareholders' equity		851,442				16,822,954
Total liabilities and shareholders' equity	$	2,784,588			$	17,366,708
*Retrospectively restated for effect of 1-for-1,000 forward split of the Ordinary Shares.

 

 

SENTAGE HOLDINGS INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND OTHER COMPREHENSIVE INCOME
	For the years ended December 31,
	2019				2020				2021
OPERATING REVENUE
Consumer loan repayment and collection management   service fees	$	3,618,823			$	1,074,734			$	156,062
Loan recommendation service fees		260,388				2,087,717				1,177,822
Prepaid payment network service fee		86,052				432,958				928,565
Total operating revenue		3,965,263				3,595,409				2,262,449
OPERATING EXPENSE
Selling, general and administrative expenses		1,528,043				1,414,979				3,041,415
Total operating expenses		1,528,043				1,414,979				3,041,415
INCOME(LOSS) FROM OPERATIONS		2,437,220				2,180,430				(778,966)
OTHER INCOME (EXPENSES)		8,495				(354)				(56,931)
INCOME(LOSS) BEFORE INCOME TAX PROVISION		2,445,715				2,180,076				(835,897)
INCOME TAX EXPENSE		611,362				592,701				257,344
NET INCOME(LOSS)		1,834,353				1,587,375				(1,093,241)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		33,571				36,993				152,700
COMPREHENSIVE INCOME (LOSS)	$	1,867,924			$	1,624,368			$	(940,541)
Earnings(loss) per common share- basic and diluted	$	0.18			$	0.16			$	(0.09)
Weighted average shares- basic and diluted		10,000,000				10,000,000				11,873,973
*Retrospectively restated for effect of 1-for-1,000 forward split of the Ordinary Shares.

 

  

 

SENTAGE HOLDINGS INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the years ended December 31,
	2019				2020				2021
Cash flows from operating activities
Net income (loss)	$	1,834,353			$	1,587,375			$	(1,093,241)
Adjustments to reconcile net income to cash and      restricted cash provided by (used in) operating      activities:
Depreciation and amortization		57,022				53,520				62,971
Gain on disposal of plant and equipment		(10,747)				-				-
Deferred income tax expense		611,362				592,701				74,243
Impairment loss recognised in respect of receivables		-				-				54,896
Changes in operating assets and liabilities:
Accounts receivable		(238,609)				(918,303)				763,240
Prepaid expenses and other current assets		(12,598)				90,290				(132,021)
Accounts payable		2,113				-				-
Contract liabilities		(3,618,822)				(1,056,406)				(154,106)
Accrued expenses and other current liabilities		668				116,033				41,354
Net cash provided by (used in) used in operating activities		(1,375,258)				465,210				(382,664)
Cash flows from investing activities
Additions to plant and equipment		-				-				(19,977)
Investment in loans receivable		-				-				(5,500,000)
Proceeds from disposal of plant and equipment		10,747				-				-
Net cash provided by(used in) investing activities		10,747				-				(5,519,977)
Cash flows from financing activities
Deferred initial public offering costs		-				(765,885)				765,885
Proceeds from IPO		-				-				16,912,053
Proceeds from (Repayment to) related party loans		1,443,234				180,026				(1,276,641)
Net cash provided by (used in) financing activities		1,443,234				(585,859)				16,401,297
Reconciliation of cash and restricted cash, beginning of year
Cash		142,715				227,387				117,434
Restricted cash		22,653				23,644				22,948
Cash and restricted cash, beginning of year	$	165,368			$	251,031			$	140,382
Reconciliation of cash and restricted cash, end of year
Cash		227,387				117,434				10,753,118
Restricted cash		23,644				22,948				30,269
Cash and restricted cash, end of year	$	251,031			$	140,382			$	10,783,387
Effect of exchange rate changes on cash and restricted cash		6,940				10,000				144,349
Net increase (decrease) in cash and restricted cash		85,663				(110,649)				10,643,005
Cash and restricted cash, beginning of year		165,368				251,031				140,382
Cash and restricted cash, end of year	$	251,031			$	140,382			$	10,783,387
Supplemental disclosure of cash flow information
Amount converted from shareholder loans to capital	$	1,148,106			$	-			$	-

 

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SOURCE Sentage Holdings Inc.

FAQ

What are Sentage Holdings Inc.'s total operating revenues for fiscal year 2021?

Sentage Holdings Inc. reported total operating revenues of $2.26 million for fiscal year 2021, down 37.1% from $3.59 million in 2020.

What was Sentage Holdings Inc.'s net loss for fiscal year 2021?

The company recorded a net loss of $1.09 million for fiscal year 2021, compared to a net income of $1.59 million for the previous year.

How did Sentage Holdings Inc.'s earnings per share change in fiscal year 2021?

Basic and diluted loss per share was $0.09 for fiscal year 2021, a decline from earnings per share of $0.16 in fiscal year 2020.

What factors contributed to the decline in Sentage Holdings Inc.'s revenue?

The revenue decline was primarily due to the completion of outstanding servicing agreements in the consumer loan repayment and collection management business.

What changes occurred in Sentage Holdings Inc.'s cash and cash equivalents during fiscal year 2021?

As of December 31, 2021, Sentage Holdings Inc. had cash and restricted cash of $10.78 million, a substantial increase from $0.14 million in 2020.