Sentage Holdings Inc. Announces Financial Results for Fiscal Year 2021
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: [email protected]
Ascent Investor Relations LLC
Tina Xiao
President
Tel: +1 917-609-0333
Email: [email protected]
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, | 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 | $ | 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 | |||||||||||
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 | (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 | |||||||||||
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 | 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.