Sentage Holdings Inc. Announces Financial Results for the First Six Months of Fiscal Year 2023

Rhea-AI Summary

Sentage Holdings Inc. (Nasdaq: SNTG) announced its financial results for the first six months of fiscal year 2023. The total operating revenue decreased by 100% to $82, and the net loss was $1.08 million. The company's prepaid payment network services business saw a significant decrease in revenue, and there was no revenue generated from consumer loan repayment and collection management, or loan recommendation services.

Positive

• The company's financial results show a significant decline in revenue and an increase in net loss, indicating a challenging period for the business.

Negative

• The total operating revenue decreased by 100%, and the net loss was $1.08 million, highlighting a negative trend in the company's financial performance.

Insights

Financial Analyst

Analyzing the financial performance of Sentage Holdings Inc., it's evident that the company is experiencing a significant downturn. The reported 100% decrease in total operating revenue is alarming, as it indicates a complete stall in the company's core business activities. This drastic decline from $0.18 million to a mere $82 is not common for a listed company and raises concerns about the viability of the business model and the effectiveness of the company's strategy to pivot into new business areas.

The increase in net loss, although marginal from $0.96 million to $1.08 million, further compounds the company's financial difficulties. The basic and diluted loss per share also increased, suggesting that shareholders are experiencing a decline in value. The reduction in cash and cash equivalents from $3.83 million to $2.74 million is another red flag that could impact the company's liquidity and its ability to finance ongoing operations or new ventures.

From a financial perspective, these results could suggest a negative outlook for the company's stock performance in the short term, as investors typically seek growth and profitability. In the long term, the company's ability to reverse this trend and introduce successful new business lines will be critical to restoring investor confidence.

Industry Analyst

The consumer loan repayment and collection management sector in China is highly competitive and regulated. Sentage Holdings Inc.'s report of no revenue from its core services such as consumer loan repayment, collection management and loan recommendation services can be interpreted as a failure to keep up with industry dynamics or regulatory changes. The company's reliance on a single merchant customer for its prepaid payment network services, without any prepaid cards issued, signifies a lack of market penetration and questions the demand for their services.

Given the current financial trajectory and the limited information on strategic initiatives to recover and grow, stakeholders should scrutinize the company's next steps closely. The reduced operating expenses, mainly due to decreased professional consulting expenses, may indicate cost-cutting measures but could also mean a decrease in investment towards business development, which is essential for a turnaround.

Risk Management Expert

The financial results of Sentage Holdings Inc. pose significant risks to investors and stakeholders. A substantial revenue decline and an increased net loss highlight the urgency for a strategic reassessment. The company's financial health is precarious, with a significant decrease in cash reserves, which could limit its ability to sustain operations and invest in recovery strategies.

The absence of income tax provisions, while initially appearing positive, could also reflect the lack of taxable income, further underscoring the company's performance issues. The reduced cash flow from operations and the minimal cash used in investing activities suggest limited internal investment, which could be necessary for innovation or expansion. Stakeholders should be aware of these risks and consider the potential need for restructuring or seeking strategic partnerships to mitigate financial distress.

SHANGHAI, Dec. 22, 2023 /PRNewswire/ -- Sentage Holdings Inc. (the "Company", "we", "our") (Nasdaq: SNTG), is a holding company incorporated in the Cayman Islands with no material operations of its own. Through its China-based operating entities, the Company offers consumer loan repayment and collection management, loan recommendation, and prepaid payment network services in China. The Company today announced its financial results for the first six months of fiscal year 2023 ended June 30, 2023. The following summarizes such financial results.

Financial Highlights for the First Six Months of Fiscal Year 2023

• Total operating revenue was $82 in the six months ended June 30, 2023, compared with $0.18 million for the same period of last year, representing a 100% decrease. The reason for the decrease in revenue was that the Company's existing business had been declining while the Company attempted to enter into new businesses.
• Net loss was $1.08 million in the six months ended June 30, 2023, compared with net loss of $0.96 million for the same period of last year.
• Basic and diluted loss per share was $0.46 in the six months ended June 30, 2023, compared with basic and diluted loss per share of $0.41 for the same period of last year.

Financial Results for the First Six Months of Fiscal Year 2023

Operating Revenue

Total operating revenue decreased by $0.18 million, or 100%, to $82 in the six months ended June 30, 2023, from $0.18 million for the same period of last year. The reason for the decrease in revenue was that the company's original business had been declining while the Company attempted to enter into new businesses.

Revenue from the prepaid payment network services business decreased by $0.18 million, or 100%, to $82 in the six months ended June 30, 2023, from $0.18 million for the same period of last year. Total number of merchant customers who used the Company's prepaid payment network services was 1 in the six months ended June 30, 2023 and 8 in the same period in 2022. During the six months ended June 30, 2023 and 2022, the Company provided technology consulting and support services to these customers. The Company charged such merchant customers service fees for designing tailored payment solutions, interfacing their internal systems with the Company's prepaid card payment system, and providing their staff with relevant operation training. These merchant customers have not yet issued prepaid cards to their end customers as of June 30, 2023 and 2022 and as of the date of this filing.

The Company did not generate any revenue from consumer loan repayment and collection management, or loan recommendation services, during the six months ended June 30, 2023 and 2022.

Operating Expenses

Selling, general and administrative expenses decreased by $52,717, or 5%, to $1,080,345 in the six months ended June 30, 2022, from $1,133,062 for the same period of last year. The decrease was due to the following reasons:

• Professionals consulting expenses decreased by $ 167,000 or 42% to $ 226,500 in the six months ended June 30, 2023, from $393,500 for the same period of last year. The decrease was primarily due to the Company paid a smaller amount of consulting services to third party professionals.

Provision for Income Taxes

Provision for income taxes was nil for the six months ended 30 June 2023, compared with nil for the same period last year.

Net Loss

Net loss was $1.08 million in the six months ended June 30, 2023, compared with net loss of $0.96 million for the same period of last year.

Loss Per Share

Basic and diluted loss per share was $0.46 in the six months ended June 30, 2023, compared with basic and diluted loss per share of $0.41 for the same period of last year.

Cash and Cash Equivalents

As of June 30, 2023, the Company had cash and restricted cash of $2.74million, compared with $3.83 million as of December 31, 2022.

Cash Flow

Net cash used in operating activities was $1.04 million, compared with Net cash used in operating activities of $1.70 million for the same period of last year.

Net cash used in investing activities was $537, compared with Net cash used in investing activities of $7,874 for the same period of last year.

Net cash used in financing activity was $4,709, compared with Net cash used in financing activity of $0.04 million for the same period of last year.

About Sentage Holdings Inc.

Sentage Holdings Inc., headquartered in Shanghai, China, is a holding company incorporated in the Cayman Islands with no material operations of its own (the "Company"). Through its China-based operating entities, the Company offers consumer loan repayment and collection management, loan recommendation, and prepaid payment network services in China. Leveraging the Company's deep understanding of its client base, strategic partner relationships, and proprietary valuation models and technologies, the Company is committed to working with its clients to understand their financial needs and challenges and offering customized services to help them meet their respective 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.

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 SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
		As of ,
		June 30				December 31
		2023				2022
		USD				USD
ASSETS
Current assets
Cash		$	2,724,245			$	3,805,135
Restricted cash			19,850				23,089
Loan receivable			5,500,000				5,500,000
Accounts receivable, net			398,549				433,510
Prepaid expenses and other assets			4,455,206				4,579,646
Total current assets			13,097,850				14,341,380
Non-current assets
Right-of-use assets, net			112,252				162,270
Property and equipment, net			66,618				53,023
Intangible assets, net			76,014				89,475
Deferred tax assets			12,067				12,686
Total non-current assets			266,951				317,454
Total assets		$	13,364,801			$	14,658,834

 

 

SENTAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
		As of ,
		June 30				December 31
		2023				2022
		USD				USD
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	8,225			$	8,647
Operating lease liabilities			84,820				87,129
Accrued expenses and other liabilities			211,876				309,001
Total current liabilities			304,921				404,777
Non-current liabilities
Operating lease liabilities			23,858				74,384
Due to a related party							4,709
Total non-current liabilities			23,858				79,093
Total liabilities			328,779				483,870
Shareholders' equity
Ordinary shares, $0.005 par value, 10,000,000 shares authorized, 2,805,325 shared    issued and outstanding			14,027				14,027
Additional paid in capital			55,327,858				55,327,858
Statutory reserves			166,038				166,038
Accumulated deficit			(42,542,457)				(41,460,571)
Accumulated other comprehensive income			70,556				127,612
Total shareholders' equity			13,036,022				14,174,964
Total liabilities and shareholders' equity		$	13,364,801			$	14,658,834

 

 

SENTAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
		For the six months ended June 30,
		2023				2022
OPERATING REVENUE
Prepaid payment network service fee			82				177,489
Total operating revenue			82				177,489
OPERATING EXPENSE
Selling, general and administrative expenses			1,080,345				1,133,062
Total operating expenses			1,080,345				1,133,062
LOSS FROM OPERATIONS			(1,080,263)				(955,573)
OTHER EXPENSES			(1,623)				(7,248)
LOSS BEFORE INCOME TAX PROVISION			(1,081,886)				(962,821)
PROVISION FOR INCOME TAXES			-				-
NET LOSS			(1,081,886)				(962,821)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment			(57,057)				(45,407)
COMPREHENSIVE LOSS		$	(1,138,943)			$	(1,008,228)
Loss per common share- basic and diluted		$	(0.46)			$	(0.41)
Weighted average shares- basic and diluted			2,376,764				2,374,795

 

 

SENTAGE HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the six months ended June 30,
		2023				2022
Cash flows from operating activities
Net loss		$	(1,081,886)			$	(962,821)
Adjustments to reconcile net income to cash and restricted cash    provided by (used in) operating activities:
Depreciation and amortization			19,429				21,747
Deferred income tax expense			-				686
Impairment loss recognized in respect of receivables			(2,902)				52,150
Changes in operating assets and liabilities:
Accounts receivable			37,863				(203,307)
Prepaid expenses and other assets			124,441				(623,320)
Interest accrued for lease liabilities			(44,191)				-
Accrued expenses and other liabilities			(97,547)				12,134
Net cash used in operating activities			(1,044,793)				(1,702,731)
Cash flows from investing activity
Additions to property, plant and equipment			(537)				(7,874)
Net cash used in investing activity			(537)				(7,874)
Cash flows from financing activity
Repayment of related party loans			(4,709)				(43,992)
Net cash used in financing activity			(4,709)				(43,992)
Reconciliation of cash and restricted cash, beginning of period
Cash			3,805,135				10,753,118
Restricted cash			23,089				30,269
Cash and restricted cash, beginning of period		$	3,828,224			$	10,783,387
Reconciliation of cash and restricted cash, end of period
Cash			2,724,245				8,953,505
Restricted cash			19,850				23,431
Cash and restricted cash, end of period		$	2,744,095			$	8,976,936
Effect of exchange rate changes on cash and restricted cash			(34,091)				(51,854)
Net decrease in cash and restricted cash			(1,084,130)				(1,806,451)
Cash and restricted cash, beginning of period			3,828,224				10,783,387
Cash and restricted cash, end of period		$	2,744,095			$	8,976,936
Supplemental non-cash financing activity
Lease liabilities arising from obtaining right-of-use assets			3,138				-

 

 

 

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SOURCE Sentage Holdings Inc.

FAQ

What are Sentage Holdings Inc.'s (Nasdaq: SNTG) financial results for the first six months of fiscal year 2023?

The total operating revenue decreased by 100% to $82, and the net loss was $1.08 million.

What caused the decrease in revenue for Sentage Holdings Inc. (Nasdaq: SNTG)?

The decrease in revenue was due to the decline in the company's original business while attempting to enter into new businesses.

What were the operating expenses for Sentage Holdings Inc. (Nasdaq: SNTG) in the first six months of fiscal year 2023?

Selling, general and administrative expenses decreased by 5% to $1,080,345, and provision for income taxes was nil.

What was the net cash used in operating activities for Sentage Holdings Inc. (Nasdaq: SNTG) in the first six months of fiscal year 2023?

Net cash used in operating activities was $1.04 million.

What was the cash and cash equivalents for Sentage Holdings Inc. (Nasdaq: SNTG) as of June 30, 2023?

The company had cash and restricted cash of $2.74 million.