BEIJING, Nov. 13, 2023 /PRNewswire/ — Datasea Inc. (NASDAQ: DTSS) ("Datasea" or the "Company"), a global technology company that develops and provides products utilizing intelligent acoustics including ultrasound, infrasound and directional sound, and provides 5G messaging, today announced its financial results for the first quarter ended September 30, 2023.
"Our first quarter results delivered strong performance with revenue of approximately $6.8 million. The increase in revenue was mainly due to the rapid increase of our 5G messaging business in China. For the current period, we benefitted from our diversified communications portfolio, our expanded addressable market and our continued improvement in productivity. Our continuously optimized products and application services that have been developed to match the real needs of customers have brought steady order flow and income to the Company. In addition, our customized systems and services have led to an improvement in our 5G segment operating margins in the first quarter of 2024."
"Datasea is currently transitioning from a China-focused company to one focused on developing business operations in both the US and globally. We are committed to transforming our business into an international technology company with R&D, manufacturing facilities, sales networks, and customer bases in the US and around the world. We plan to provide leading-edge artificial intelligence solutions in the field of acoustic intelligence as we contribute to the development of this essential feature of the digital world on a global scale," commented CEO Zhixin Liu of Datasea.
First Quarter Fiscal Year 2024 Financial Highlights
Revenue was $6,880,743, driven by rapid increase of 5G messaging business in China. For the three months ended September 30, 2023, revenues mainly consisted of service fees from our 5G SMS service. Selling expenses were $84,447, a decrease of 18.9% or $19,667, as compared to the year-ago period. This is mainly due to the strengthening of the Company’s budgeting processes via in-depth analysis of its market, products, and sales targets, while strengthening the monitoring of its sales budget execution via making timely adjustments. General and administration expenses were $693,060, a decrease of 21.7% or $191,900, as compared to the year-ago period. This is mainly due to the Company’s detailed management expense plan, including budgeting and control objectives for various management expenses, as well as corresponding control measures. Capital reserve balances were $32,194,070, an increase of 33.5% or $8,071,097, as compared to $24,122,973 in the year-ago period. This was mainly due to the increase in the issuance of shares by the Company which provided the Company with funding for its strategic growth objectives.
Operations Update
Acoustic Intelligence
Datasea is a developer and promoter of the concept of acoustic intelligence and plans to introduce this cutting-edge technology and its wide range of applications to China, US and globally.
International Business Expansion: Datasea established its wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, USA in July 2023. Since then, DTSS has embarked on its mission of developing leading and high-quality ultrasonic air sterilizers, bathroom and cloakroom sterilizers, and odor removal products. Further, it has engaged in the continuous development of new products including ultrasonic Skin Repair Robots and Schumann frequency sleep monitors for the US and global market.
Technology Collaborations: DTSS has entered into collaborations with renowned research institutions both domestically and internationally, such as the Medical Ultrasound Project with the Chinese Academy of Sciences and the ultrasound-based products for mental alertness and attention enhancement. In addition, Datasea plans to foster collaborations with renowned U.S. universities and research institutions through its U.S. subsidiary. By partnering with these institutions, the Company will engage in joint research and development initiatives to create, develop and produce new intelligent acoustics technologies. The Company believes that this collaborative approach will help Datasea to develop and sustain a technological leadership position in the ultrasonic, infrasound and directional sound technology fields.
U.S. Patent Acquisition and Technology Protection: Datasea prioritizes the acquisition of U.S. patents to protect its innovations and intellectual property. Our attainment of U.S. patents for our technologies is essential to maintain our competitive advantage and defend against potential infringement. We believe that this proactive approach in patent acquisition will ensure that Datasea’s intellectual property remains protected in the U.S. market and provide opportunities for licensing and monetization. Currently, the Company is actively engaged in obtaining U.S. patents through collaboration with a renowned intellectual property firm. We aim to build an intellectual property matrix in the United States and on an international scale.
Marketing and sales expansion. Datasea plans to actively seek long-term contracts and collaborations with domestic and international customers, partners, and major corporate clients. On October 16, 2023, its Delaware operating entity, Datasea Acoustics LLC, entered into a marketing promotion and sales cooperation agreement with Meglio Interiors LLC ("Meglio"), based in Chamblee, Georgia to develop, promote and distribute the Company’s intelligent acoustics products in the US and internationally. Datasea plans to establish an assembly line in the near future for its intelligent acoustics products in Delaware and it is planned that Meglio will be a primary distributor of such products. In terms of our current sales activities, we have engaged in discussions with potential clients such as New York real estate developers and Philadelphia educational institutions. These collaborations can encompass product sales, technical cooperation, and joint research and development, which will help DTSS to develop revenue and market share.
5G Messaging
Marketing and sales expansion. Datasea is one of the first movers in the 5G messaging industry in China and has built a comprehensive 5G messaging product portfolio with high brand recognition. The Company adopted an integrated sales strategy to boost sales to better promote business development and meet with the demand of customers.
Key Customers and Agreements. Datasea’s 5G messaging solutions have been adopted by leading companies across 11 industries, including express, health care, retail and tourism. As of September 30, 2023, Datasea’s Chinese operating entities, Shuhai Information Technology Co., Ltd. ("Shuhai Beijing") and its subsidiaries have reached agreements with several new clients, Hainuo Xintong (Qingdao) Network Technology Co., Ltd. (hereinafter referred to as "Hainuo") and Xiamen Duoqiao Mai Network Technology Co., Ltd. (hereinafter referred to as "Xiamen Duoqiao"). In just a few months after signing agreements with Hainuo Xintong and Xiamen Duoqiao, Shuhai Beijing and its subsidiaries provided a 5G message top up service worth approximately $8.1 million (or RMB 57.99 million). From May 2023 to September 2023, the revenue from Maiduoqiao is valued at $6.2 million (or RMB 44.51million). From August 2023 to September 2023, the revenue from Hainuo Xintong is $1.9 million (equivalent to RMB 13.5 RMB). Also, Datasea’s Chinese operating entity, Guozhong Times (Beijing) Technology Co., Ltd., has reached an agreement with a new client, Qingdao Ruicheng Lida Network Technology Co., Ltd. As of September 30, 2023, Shuhai Beijing and its subsidiaries have provided 5G message top up services worth approximately $0.8 million (or RMB 5.6 million).
About Datasea Inc.
Datasea Inc. ("Datasea") is a leading provider of products, services, and solutions for enterprise and retail customers in converging and innovative industries, Intelligent Acoustics and 5G messaging, especially focusing on ultrasonic, infrasound and directional sound technology. The Company’s advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G Messaging segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies in intelligent acoustics, utilizing ultrasonic sterilization to combat viruses and prevent human infections, and is also developing innovations in directional sound and medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to mark its global presence. This underlies Datasea’s commitment to Intelligent Acoustics and its intent to offer leading-edge acoustic solutions to the US market. For additional information, please visit: www.dataseainc.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook," "objective" and similar terms. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and which are beyond Datasea’s control, which may cause Datasea’s actual results, performance or achievements (including the RMB/USD value of its anticipated benefit to Datasea as described herein) to differ materially and in an adverse manner from anticipated results contained or implied in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Datasea’s filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov. Datasea does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
Datasea investor and media Contact:
Email: investorrelations@shuhaixinxi.com
DATASEA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
THREE MONTHS
ENDED SEPTEMBER
30,
2023
2022
Revenues
$
6,880,743
$
–
Cost of goods sold
6,806,008
–
Gross profit
74,735
–
Operating expenses
Selling
84,447
104,114
General and administrative
693,060
884,960
Research and development
155,004
106,628
Total operating expenses
932,511
1,095,702
Loss from operations
(857,776)
(1,095,702)
Non-operating income (expenses)
Other expenses
(7,864)
(1,239)
Interest income
106
64
Total non-operating expenses, net
(7,758)
(1,175)
Loss before income tax
(865,534)
(1,096,877)
Income tax
–
8
Loss before noncontrolling interest from continuing operation
(865,534)
(1,096,885)
Loss before noncontrolling interest from discontinued operation
833,546
(337,062)
Less: loss attributable to noncontrolling interest from continuing operation
(9,932)
5,135
Less: loss attributable to noncontrolling interest from discontinued operation
–
(101,759)
Net loss attribute to noncontrolling interest
(9,932)
(96,624)
Net loss to the Company from continuing operation
(855,602)
(1,102,020)
Net loss to the Company from discontinued operation
833,546
(235,303)
Net loss to the Company
(22,056)
(1,337,323)
Other comprehensive item
Foreign currency translation gain (loss) attributable to the Company
(161,216)
12,338
Foreign currency translation gain (loss) attributable to noncontrolling interest
29,734
(3,690)
Comprehensive loss attributable to the Company
$
(183,272)
$
(1,324,985)
Comprehensive income (loss) attributable to noncontrolling interest
$
19,802
$
(100,314)
Basic and diluted net loss per share
$
(0.00)
$
(0.05)
Weighted average shares used for computing basic and diluted loss per share
29,445,992
24,324,633
DATASEA INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30,
2023
(UNAUDITED)
JUNE 30,
2023
ASSETS
CURRENT ASSETS
Cash
$
1,218,748
$
19,728
Accounts receivable
22,158
255,725
Inventory, net
242,789
241,380
Value-added tax prepayment
70,115
71,261
Prepaid expenses and other current assets
6,358,043
701,423
Total current assets
7,911,853
1,289,517
NONCURRENT ASSETS
Long-term investment
55,713
55,358
Property and equipment, net
67,700
85,930
Intangible assets, net
715,079
1,185,787
Right-of-use assets, net
65,854
137,856
Total noncurrent assets
904,346
1,464,931
TOTAL ASSETS
$
8,816,199
$
2,754,448
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
$
296,177
$
1,005,059
Short term loan
496,035
594,906
Unearned revenue
473,061
609,175
Accrued expenses and other payables
642,294
1,409,939
Due to related parties
494,927
1,162,856
Operating lease liabilities
34,367
124,640
Loan payables – current
2,032,920
–
Total current liabilities
4,469,781
4,906,575
NONCURRENT LIABILITIES
Operating lease liabilities
17,781
26,449
Loan payables – non-current
20,560
1,401,521
Total noncurrent liabilities
38,341
1,427,970
TOTAL LIABILITIES
4,508,122
6,334,545
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value, 375,000,000 shares authorized, 38,073,234
and 27,784,133 shares issued and outstanding as of September 30, 2023 and
June 30, 2023, respectively
38,073
27,784
Additional paid-in capital
32,194,070
24,122,973
Accumulated comprehensive income
232,036
393,252
Accumulated deficit
(28,085,314)
(28,063,258)
TOTAL COMPANY STOCKHOLDERS’ EQUITY (DEFICIT)
4,378,865
(3,519,249)
Noncontrolling interest
(70,788)
(60,848)
TOTAL EQUITY (DEFICIT)
4,308,077
(3,580,097)
TOTAL LIABILITIES AND EQUITY (DEFICIT)
$
8,816,199
$
2,754,448
DATASEA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Common Stock
Additional
paid-in
Accumulated
Accumulated
other
comprehensive
Noncontrolling
Shares
Amount
capital
deficit
income
Total
interest
Balance at July
1, 2023
27,784,133
$
27,784
$
24,122,973
$
(28,063,258)
$
393,252
$
(3,519,249)
$
(60,848)
Net loss
–
–
–
(22,056)
–
(22,056)
(9,932)
Issuance of
common
stock for
equity
financing
10,289,101
10,289
8,050,997
–
–
8,061,286
–
Shares issued
for stock
compensation
expense
–
–
20,100
–
–
20,100
–
Foreign
currency
translation
loss
–
–
–
–
(161,216)
(161,216)
(8)
Balance at
September
30, 2023
38,073,234
$
38,073
$
32,194,070
$
(28,085,314)
$
232,036
$
4,378,865
$
(70,788)
Balance at July
1, 2022
24,324,633
$
24,325
$
20,729,559
$
(18,583,566)
$
283,587
$
2,453,905
$
(854,273)
Net loss
–
–
–
(1,337,323)
–
(1,337,323)
(96,624)
Shares issued
for stock
compensation
expense
–
–
116,250
–
–
116,250
–
Foreign
currency
translation
gain (loss)
–
–
–
–
12,338
12,338
(3,690)
Balance at
September
30, 2022
24,324,633
$
24,325
$
20,845,809
$
(19,920,889)
$
295,925
$
1,245,170
$
(954,587)
IMPORTANT NOTICE TO USERS (summary only, please refer to the Form 10-Q for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our Forms 10-Q and 10-K.
Source : Datasea Reports First Quarter Fiscal Year 2024 Financial Results and Operations Update
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