Datasea Announces the Closing of a $4.0 Million Private Offering, Primarily Funded by the Company's CEO and Director

Rhea-AI Summary

Datasea Inc. (NASDAQ: DTSS) has announced the closing of a $4.0 million private offering as of October 15, 2024. The company sold 1,932,224 shares of common stock at $2.06 per share to three investors, including its CEO and Director, who are also the company's two largest shareholders. The purchase price was equal to the closing price on September 26, 2024, when binding subscription agreements were signed. Investors have agreed to a 180-day holding period for the shares.

The funds raised will be used to support Datasea's future business operations, including:

• Investments in acoustic high-tech related products design upgrade
• Working capital for mass production and online sales
• Acquiring intellectual property
• Promotion and sales of 5G AI multimodal digital business products

CEO Zhixin Liu stated that the support from major shareholders enhances market confidence and will help accelerate the achievement of strategic goals.

Positive

• Raised $4.0 million through private offering
• CEO and Director participated in the offering, demonstrating confidence in the company
• Funds to be used for product development, production, and sales initiatives
• 180-day holding period for new shares, potentially reducing short-term selling pressure

Negative

• Potential dilution of existing shareholders' ownership
• Reliance on insider funding may indicate external investor interest

Insights

Financial Analyst

This private offering of $4.0 million is a significant development for Datasea, given its small market cap of about $11.4 million. The investment, primarily from insiders including the CEO, signals strong confidence in the company's future. The 35% increase in available capital could substantially boost Datasea's operations and growth potential.

Key points to consider:

• The offering price of $2.06 per share matches the market price, avoiding dilution concerns.
• A 180-day lock-up period for new shares demonstrates long-term commitment from investors.
• Funds will be used for product development, production and sales initiatives in acoustic tech and 5G AI, potentially accelerating revenue growth.
• Insider participation may be viewed positively, but also raises questions about external investor interest.

While this capital injection is important for Datasea's growth plans, investors should monitor how effectively the company deploys these funds to generate returns.

Tech Industry Analyst

Datasea's focus on innovative high-tech acoustics and 5G AI multimodal digital technology positions it in rapidly evolving, high-potential markets. The $4 million investment will be critical for advancing their product portfolio and market presence.

Key technological implications:

• Investment in acoustic high-tech product upgrades could lead to competitive advantages in specialized audio applications.
• Emphasis on 5G AI multimodal digital business products aligns with growing trends in AI and next-gen connectivity.
• Acquiring intellectual property suggests a strategy to strengthen their technological moat and potentially create licensable assets.

The company's ability to innovate in these areas will be important for long-term success. Investors should watch for announcements of new products or partnerships that demonstrate Datasea's technological progress and market traction in the coming months.

BEIJING, Oct. 21, 2024 /PRNewswire/ -- Datasea Inc. (NASDAQ: DTSS) ("Datasea" or the "Company"), a Nevada-based digital technology company focused on innovative high-tech acoustics and 5G AI multimodal digital technology, today announced that, as of October 15, 2024, the Company closed its Regulation S offering (the "Offering") with three investors, including its two largest shareholders, the Company's CEO and Director, pursuant to which the Company sold the investors an aggregate of 1,932,224 shares of its common stock (the "Shares").  The purchase price for the Shares was $2.06 per share, which was equal to the closing price of the Company's common stock on The Nasdaq Capital Market on September 26, 2024, the date on which the binding subscription agreements had been entered into by the parties. The investors have agreed to hold the shares for a period of no less than 180 days.

The investors in the Offering include two members of the Company's management, who are also major shareholders, reflecting their strong confidence in the Company's future development. The funds raised, in the amount of approximately $4.0 million, will primarily be used to support the Company's future business operations, including investments in acoustic high-tech related products design upgrade, working capital for mass production and on-line sales, acquiring intellectual property and working capital for the promotion and sales of 5G AI multimodal digital business products.

Ms. Zhixin Liu, CEO of Datasea stated, "We are pleased to receive support from our major shareholders, which not only enhances market confidence in our development but will also help us accelerate the achievement of our strategic goals."

About Datasea Inc.

Datasea is a leading provider of products, services, and solutions for enterprise and retail customers in two innovative industries, acoustic high tech and 5G-AI multimodal digitalization. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal communication segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies, precision manufacturing and ultrasonic, infrasound and directional sound technology in its acoustics business to combat viruses and prevent human infections, and it is also developing applications in medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to enter the U.S. markets and to mark its global expansion plan. 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 SEC, 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.

Investor and Media Contact: 

Datasea Investor Relations
Email:  investorrelations@shuhaixinxi.com
                       sunhezhi@shuhaixinxi.com  

 

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SOURCE Datasea Inc.

FAQ

What was the size of Datasea's (DTSS) recent private offering?

Datasea (DTSS) closed a $4.0 million private offering on October 15, 2024.

Who were the main investors in Datasea's (DTSS) private offering?

The main investors in Datasea's (DTSS) private offering were the company's CEO and Director, who are also its two largest shareholders.

What was the share price for Datasea's (DTSS) private offering?

The share price for Datasea's (DTSS) private offering was $2.06 per share, equal to the closing price on September 26, 2024.

How will Datasea (DTSS) use the funds from the private offering?

Datasea (DTSS) will use the funds for acoustic high-tech product design upgrades, working capital for production and sales, acquiring intellectual property, and promoting 5G AI multimodal digital business products.