Sentage Holdings Inc. Announces Financial Results for Fiscal Year 2021

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Jul 18, 2022, 16:30 ET

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, 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	$	-	$	-