Datasea Reports Second Quarter Fiscal Year 2024 Financial Results and Operations Update - Second Quarter Revenue is $11.3 Million Versus $0.1 Million in the Year-Ago Period
- Strong financial performance in Q2 2024 with revenue of $11.3 million and $18.2 million for the first half of the fiscal year.
- Growth attributed to the 5G multimodal communication business in China, signing significant service agreements.
- Focus on customer needs, product optimization, and technology advantages.
- Expansion into the US market with air sterilization products and pursuit of intellectual property rights.
- Commitment to providing cutting-edge acoustics technology with AI for healthy living solutions globally.
- None.
Insights
The reported revenue growth of Datasea Inc. is remarkable, showing an increase of 13,766.8% compared to the previous year. This is a clear indicator of the company's rapid expansion and successful penetration into the 5G multimodal communication market in China. The financial health of the company is further evidenced by the reduction in administrative expenses by 24.8% and a substantial decrease in accounts receivable by 78.8%, which suggests improved operational efficiency and credit management. These factors combined indicate a strong financial performance that could pique the interest of investors and analysts, potentially affecting the company's stock valuation positively.
Datasea's strategic focus on intelligent acoustics and 5G multimodal communication technologies places it at the forefront of two rapidly growing markets. The expansion into the US market and the establishment of a subsidiary in Delaware demonstrate an aggressive international growth strategy. The collaborations with Meglio Interiors LLC and renowned research institutions, coupled with the pursuit of U.S. patents, highlight the company's commitment to innovation and market expansion. These moves are likely to enhance brand recognition and create new revenue streams, positioning Datasea well for capturing a significant share of the intelligent acoustics and 5G communication markets both domestically and internationally.
The emphasis on acquiring U.S. patents is a strategic legal maneuver by Datasea to safeguard its technological advancements and intellectual property. This proactive approach in intellectual property management is crucial for maintaining a competitive edge in the tech industry, especially when entering a new market like the U.S. It also opens avenues for licensing deals and mitigates the risk of infringement litigation. For stakeholders, this signifies a company that is not only focused on growth but also on protecting its assets, which can be a reassuring signal for investors concerned about the long-term sustainability of Datasea's innovations.
"We delivered strong performance in our second quarter of 2024 with revenue of approximately
"We launched our air sterilization products in
First Half Fiscal Year 2024 Financial Highlights
- For the six months ended December 31, 2023 and 2022, revenues were
$18,229,212 $131,459 $18,097,753 766.8% over the same period of last year, mainly due the Company's is current leadership in the research and development of 5G multimodal communication technology, where it has formed a stable customer base after a sustained expansion of its customer base. In addition to Datasea's technological R&D achievements over the years, our improved market positioning is due to extensive market promotion and our exceptional customer support. In addition, the structural dynamics in which we operate have improved with the general development of the 5G upstream and downstream chain, which has led to a thriving 5G market and the formation of a very sizeable and loyal customer base. - For the six months ended December 31, 2023 and 2022, the Company's administrative expenses were
$1,316,516 $1,751,359 $434,843 24.8% , compared to the same period last year. The main reason is that the Company continues to rationalize its administrative expenses, improve its operational efficiency, and improve the granularity of its expenses to improve management efficiency and reduce expenses. - As of December 31, 2023 and June 30, 2023, the Company's accounts receivable balance were
$54,123 $255,725 $201,602 78.8% from the prior period. Mainly, the Company reduced the occurrence of bad debts by strengthening the credit evaluation of customers, strengthened its collection processes including collection efficiency and shortened the account period, all of which improved the management efficiency of its accounts receivable.
Operations Update
Acoustic Intelligence
Datasea is a developer and promoter of acoustic intelligence and plans to introduce Its cutting-edge technology and its wide range of applications to
International Business Expansion: Datasea established its wholly-owned subsidiary, Datasea Acoustics LLC, in
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, 2023, its
Technology Collaborations: Datasea believes that it is at the forefront of delivering cutting-edge intelligent acoustics solutions, especially focusing on ultrasound, infrasound, directional sound and Schumann resonance technology, to meet the evolving needs of our customers worldwide. DTSS has entered into collaborations with renowned research institutions 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
US Patent Acquisition and Technology Protection: Datasea prioritizes the acquisition of US patents to protect its innovations and intellectual property. Our attainment of US patents for our technologies is essential to maintain our competitive advantage and defend against potential infringement. We believe that our planned patent acquisition will ensure that Datasea's intellectual property remains protected in the US market and provide opportunities for licensing and monetization. Currently, the Company is actively engaged in obtaining
5G Multimodal Communication
Marketing and sales expansion. Datasea is a first pioneer in the 5G multimodal communication, upgraded 5G messaging services in China, and has built a comprehensive 5G multimodal communication product portfolio with high brand recognition. With the rapid development of 5G multimodal communication in the Chinese market, its application trend will show the characteristics of intelligence, strong connectivity, immersive experience, enabling thousands of industries, personalized service and border blurring, and promote the digital transformation and intelligent development of all walks of life. The Company's communication suite enables users to enjoy various effective interfaces with integrated messages, including texts, pictures, audio, video and emojis, as well as status, location and other communication functions. It has the characteristics of high contact rate, rich media, strong interactivity, convenient service, and high security. Datasea has adopted an integrated sales strategy to boost sales to better promote business development and meet the demand of its customers.
Key Customers and Agreements. As of December 31, 2023, Datasea's Chinese operating entities have reached agreements with two important new clients, Hainuo Xintong (
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 multimodal communication 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 multimodal communication 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
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
Datasea Investor and Media Contact:
Email: investorrelations@shuhaixinxi.com
Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com
DATASEA INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | 11,348,469 | $ | 131,459 | $ | 18,229,212 | $ | 131,459 | ||||||||
Cost of goods sold | 11,246,234 | 96,030 | 18,052,242 | 96,030 | ||||||||||||
Gross profit | 102,235 | 35,429 | 176,970 | 35,429 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling | 1,149,944 | 45,588 | 1,234,391 | 149,702 | ||||||||||||
General and administrative | 623,456 | 866,399 | 1,316,516 | 1,751,359 | ||||||||||||
Research and development | 117,371 | 148,812 | 272,375 | 255,440 | ||||||||||||
Total operating expenses | 1,890,771 | 1,060,799 | 2,823,282 | 2,156,501 | ||||||||||||
Loss from operations | (1,788,536) | (1,025,370) | (2,646,312) | (2,121,072) | ||||||||||||
Non-operating income (expenses) | ||||||||||||||||
Other expenses | (46,187) | (34,326) | (54,051) | (35,565) | ||||||||||||
Interest income | 1,623 | 29 | 1,729 | 93 | ||||||||||||
Total non-operating expenses, net | (44,564) | (34,297) | (52,322) | (35,472) | ||||||||||||
Loss before income tax | (1,833,100) | (1,059,667) | (2,698,634) | (2,156,544) | ||||||||||||
Income tax | - | - | - | 8 | ||||||||||||
Loss before noncontrolling interest from continuing | (1,833,100) | (1,059,667) | (2,698,634) | (2,156,552) | ||||||||||||
Income (loss) before noncontrolling interest from | - | (351,418) | 833,546 | (688,480) | ||||||||||||
Less: loss attributable to noncontrolling interest from | (61) | (14,002) | (9,993) | (8,867) | ||||||||||||
Less: loss attributable to noncontrolling interest from | - | (106,093) | - | (207,852) | ||||||||||||
Net loss attribute to noncontrolling interest | (61) | (120,095) | (9,993) | (216,719) | ||||||||||||
Net loss to the Company from continuing operation | (1,833,039) | (1,045,665) | (2,688,641) | (2,147,685) | ||||||||||||
Net income (loss) to the Company from discontinued | - | (245,325) | 833,546 | (480,628) | ||||||||||||
Net loss to the Company | (1,833,039) | (1,290,990) | (1,855,095) | (2,628,313) | ||||||||||||
Other comprehensive item | ||||||||||||||||
Foreign currency translation gain (loss) attributable to | 34,601 | (61,105) | (126,615) | (48,767) | ||||||||||||
Foreign currency translation gain attributable to | 116 | 32,426 | 29,850 | 28,736 | ||||||||||||
Comprehensive loss attributable to the Company | $ | (1,798,438) | $ | (1,352,095) | $ | (1,981,710) | $ | (2,677,080) | ||||||||
Comprehensive income (loss) attributable to | $ | 55 | $ | (87,669) | $ | 19,857 | $ | (187,983) | ||||||||
Basic and diluted net loss per share | $ | (0.72) | $ | (0.80) | $ | (0.82) | $ | (1.62) | ||||||||
Weighted average shares used for computing basic and diluted loss per share * | 2,538,286 | 1,621,642 | 2,250,711 | 1,621,642 | ||||||||||||
* | Retroactively reflects a 1-for-15 reverse stock split effective on January 19, 2024 |
DATASEA INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
DECEMBER 31, | JUNE 30, | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 437,716 | $ | 19,728 | ||||
Accounts receivable | 54,123 | 255,725 | ||||||
Inventory, net | 185,806 | 241,380 | ||||||
Value-added tax prepayment | 82,987 | 71,261 | ||||||
Prepaid expenses and other current assets | 3,297,619 | 701,423 | ||||||
Total current assets | 4,058,251 | 1,289,517 | ||||||
NONCURRENT ASSETS | ||||||||
Long-term investment | 56,476 | 55,358 | ||||||
Property and equipment, net | 62,512 | 85,930 | ||||||
Intangible assets, net | 660,080 | 1,185,787 | ||||||
Right-of-use assets, net | 107,329 | 137,856 | ||||||
Total noncurrent assets | 886,397 | 1,464,931 | ||||||
TOTAL ASSETS | $ | 4,944,648 | $ | 2,754,448 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 339,897 | $ | 1,005,059 | ||||
Unearned revenue | 58,456 | 609,175 | ||||||
Accrued expenses and other payables | 670,596 | 1,409,939 | ||||||
Due to related parties | 568,492 | 1,162,856 | ||||||
Operating lease liabilities | 116,594 | 124,640 | ||||||
Bank loan payable | 502,836 | 594,906 | ||||||
Loan payable | 155,308 | - | ||||||
Total current liabilities | 2,412,179 | 4,906,575 | ||||||
NONCURRENT LIABILITIES | ||||||||
Operating lease liabilities | - | 26,449 | ||||||
Loan payable | 1,310,306 | |||||||
Bank loan payable | 672 | 91,215 | ||||||
Total noncurrent liabilities | 672 | 1,427,970 | ||||||
TOTAL LIABILITIES | 2,412,851 | 6,334,545 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
Common stock, | 2,538 | 1,852 | ||||||
Additional paid-in capital | 32,251,708 | 24,148,905 | ||||||
Accumulated comprehensive income | 266,637 | 393,252 | ||||||
Accumulated deficit | (29,918,353) | (28,063,258) | ||||||
TOTAL COMPANY STOCKHOLDERS' EQUITY (DEFICIT) | 2,602,530 | (3,519,249) | ||||||
Noncontrolling interest | (70,733) | (60,848) | ||||||
TOTAL EQUITY (DEFICIT) | 2,531,797 | (3,580,097) | ||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 4,944,648 | $ | 2,754,448 | ||||
* | retroactively reflect 1-for-15 reverse stock split effective on January 19, 2024 |
DATASEA INC. | ||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||
SIX AND THREE MONTHS ENDED DECEMBER 31, 2023 AND 2022 | ||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||
Common Stock | Additional | Accumulated | Accumulated | Noncontrolling | ||||||||||||||||||||||||
Shares | Amount | capital | deficit | income | Total | interest | ||||||||||||||||||||||
Balance at July 1, 2023 | 1,852,346 | $ | 1,852 | $ | 24,148,905 | $ | (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 | 685,940 | 686 | 8,060,600 | - | - | 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 | 2,538,286 | 2,538 | 32,229,605 | (28,085,314) | 232,036 | 4,378,865 | (70,788) | |||||||||||||||||||||
Net loss | - | - | - | (1,833,039) | - | (1,833,039) | (61) | |||||||||||||||||||||
Shares issued for stock compensation expense | - | - | 22,103 | - | - | 22,103 | - | |||||||||||||||||||||
Foreign currency translation gain | - | - | - | - | 34,601 | 34,601 | 116 | |||||||||||||||||||||
Balance at December 31, 2023 | 2,538,286 | $ | 2,538 | $ | 32,251,708 | $ | (29,918,353) | $ | 266,637 | $ | 2,602,530 | $ | (70,733) | |||||||||||||||
Balance at July 1, 2022 | 1,621,642 | $ | 1,622 | $ | 20,752,262 | $ | (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 | 1,621,642 | 1,622 | 20,868,512 | (19,920,889) | 295,925 | 1,245,170 | (954,587) | |||||||||||||||||||||
Net loss | - | - | - | (1,290,990) | - | (1,290,990) | (120,095) | |||||||||||||||||||||
Shares issued for stock compensation expense | - | - | 117,000 | - | - | 117,000 | - | |||||||||||||||||||||
Purchase of minority interest ownership | - | - | (982,014) | - | - | (982,014) | 982,014 | |||||||||||||||||||||
Foreign currency translation gain (loss) | - | - | - | - | (61,105) | (61,105) | 32,426 | |||||||||||||||||||||
Balance at December 31, 2022 | 1,621,642 | $ | 1,622 | $ | 20,003,498 | $ | (21,211,879) | $ | 234,820 | $ | (971,939) | $ | (60,242) | |||||||||||||||
IMPORTANT NOTICE TO USERS
The information provided is a summary only, please refer to the Form 10-Q for the full text of this 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.
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SOURCE Datasea Inc.
FAQ
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