[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements show significant revenue growth and improved equity, but also a continued net loss and a going concern risk [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $5.90 million and stockholders' equity turned positive, driven by increased intangible assets and reduced liabilities Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 31, 2024 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 1,595,096 | 2,647,892 | | **Total Noncurrent Assets** | 4,308,437 | 643,812 | | **Total Assets** | **5,903,533** | **3,291,704** | | **Total Current Liabilities** | 2,560,305 | 3,599,982 | | **Total Liabilities** | **2,677,125** | **3,599,982** | | **Total Stockholders' Equity (Deficit)** | **3,226,408** | **(308,278)** | - The significant increase in noncurrent assets is mainly due to the growth of **intangible assets**, which rose from **$546,001 to $4,081,544**[10](index=10&type=chunk) - The company shifted from a **stockholders' deficit of $308,278 to a positive equity of $3,226,408**, largely due to an increase in additional paid-in capital[10](index=10&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Substantial revenue growth for the three and six-month periods led to higher gross profit, though the company remains in a net loss position Three Months Ended December 31, (Unaudited) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 20,456,404 | 11,348,469 | +80.3% | | Gross Profit | 417,452 | 102,235 | +308.3% | | Loss from Operations | (1,238,352) | (1,788,536) | -30.8% | | Net Loss to the Company | (1,136,278) | (1,833,039) | -38.0% | | Basic and Diluted Net Loss per Share | (0.16) | (0.72) | -77.8% | Six Months Ended December 31, (Unaudited) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 41,537,498 | 18,229,212 | +127.9% | | Gross Profit | 614,433 | 176,970 | +247.2% | | Loss from Operations | (3,268,902) | (2,646,312) | +23.5% | | Net Loss to the Company | (3,098,267) | (1,855,095) | +67.0% | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash from financing activities funded investments in intangible assets and covered operating cash use, resulting in a slight net cash increase Cash Flow Summary for Six Months Ended December 31, (Unaudited) | Cash Flow Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,587,572) | (5,633,283) | | Net cash used in investing activities | (3,957,527) | (71,816) | | Net cash provided by financing activities | 5,659,128 | 6,241,781 | | **Net increase in cash** | **86,839** | **417,988** | - The primary use of cash in investing activities was the **acquisition of intangible assets, totaling $3.95 million**[17](index=17&type=chunk) - Financing activities were a key source of cash, with **$5.94 million in net proceeds from the issuance of common stock**[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's VIE structure, going concern uncertainty, revenue sources, and significant financing and acquisition transactions - The company operates primarily through a **Variable Interest Entity (VIE) structure** in the People's Republic of China (PRC)[20](index=20&type=chunk) - A **1-for-15 reverse stock split** was effective on January 19, 2024, with all share amounts retroactively restated[35](index=35&type=chunk) - There is **substantial doubt about the Company's ability to continue as a going concern** due to recurring losses and an accumulated deficit of approximately **$42.54 million**[36](index=36&type=chunk) Revenue Breakdown for Six Months Ended Dec 31, 2024 | Revenue Source | Amount ($) | | :--- | :--- | | 5G AI Multimodal communication | 41,161,572 | | Acoustic Intelligence Business | 45,768 | | Software licensing | 326,936 | | Smart City business | 3,046 | | Other | 176 | | **Total revenue** | **41,537,498** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong revenue growth from its 5G+AI business, ongoing net losses, going concern risks, and material weaknesses in internal controls [Overview](index=28&type=section&id=Overview) The company operates via a VIE structure in China, focusing on acoustic tech and a rapidly growing 5G+AI digital business - Datasea is a Nevada-based holding company with business activities in China conducted through a **VIE structure**[158](index=158&type=chunk) - For the six-month period ending Dec 31, 2024, **revenue grew 127.86% to $41.54 million**, driven by the 5G+AI multimodal digital business[160](index=160&type=chunk) - The company is focusing on five key application areas for its acoustic technology: **acoustic industry, agriculture, healthcare, health, and IoT**[165](index=165&type=chunk) - The **5G+AI multimodal digital platform is the main revenue source**, serving sectors like banking, insurance, and gaming[184](index=184&type=chunk)[201](index=201&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Revenue grew significantly for both three and six-month periods, but widening net loss for the six-month period reflects rising operating expenses Three-Month Operational Comparison (Ended Dec 31) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 20,456,404 | 11,348,469 | +80.3% | | Gross Profit | 417,452 | 102,235 | +308.3% | | Gross Margin | 2.0% | 0.9% | +1.1 p.p. | | Net Loss to Company | (1,136,278) | (1,833,039) | -38.0% | Six-Month Operational Comparison (Ended Dec 31) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 41,537,498 | 18,229,212 | +127.9% | | Gross Profit | 614,433 | 176,970 | +247.2% | | Gross Margin | 1.5% | 1.0% | +0.5 p.p. | | Net Loss from Cont. Ops | (3,098,267) | (2,688,641) | +15.2% | - The increase in G&A expenses for the six-month period was primarily due to a **$514,297 increase in stock compensation expense** and a **$369,845 increase in professional service fees**[317](index=317&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces a working capital deficit and relies on equity financing to fund operations and investments, highlighting going concern risks - As of December 31, 2024, the company had a **working capital deficit of $965,209** and a current ratio of 0.62:1[325](index=325&type=chunk) Six-Month Cash Flow Summary (Ended Dec 31) | Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,587,572) | (5,633,283) | | Net cash used in investing activities | (3,957,527) | (71,816) | | Net cash provided by financing activities | 5,659,128 | 6,241,781 | - The company's **accounts receivable balance decreased by 70.64%** to $210,980, indicating improved cash collection[343](index=343&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exempt from this disclosure requirement as a "smaller reporting company" - The company is exempt from this disclosure requirement due to its status as a **"smaller reporting company"**[376](index=376&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to material weaknesses in internal controls over financial reporting - The CEO and CFO concluded that the company's **disclosure controls and procedures were not effective** as of the end of the reporting period[377](index=377&type=chunk) - Identified material weaknesses include **inadequate segregation of duties**, a **lack of personnel with U.S. GAAP expertise**, and **insufficient written accounting policies**[378](index=378&type=chunk) - Management is taking steps to **enhance internal controls**, including improving cost control and project management[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) [Part II - Other Information](index=62&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any pending legal proceedings - The company is **not currently involved in any legal proceedings**[393](index=393&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) The company is exempt from this disclosure requirement as a "smaller reporting company" - The company is exempt from this disclosure requirement due to its status as a **"smaller reporting company"**[394](index=394&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details two significant equity financing events in July and September 2024 to fund R&D and corporate purposes - On July 2, 2024, a registered direct offering raised gross proceeds of approximately **$2.25 million**[396](index=396&type=chunk) - In September 2024, the company issued **1,932,224 shares to three non-U.S. investors at $2.06 per share**, including to the CEO and a director[395](index=395&type=chunk) [Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - **None**[401](index=401&type=chunk) [Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[402](index=402&type=chunk) [Other Information](index=63&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted, modified, or terminated a **Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during the quarter[404](index=404&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL data files - Key exhibits include **CEO and CFO certifications** (Exhibits 31.1, 31.2, 32.1, 32.2) and **Inline XBRL documents** (Exhibit 101 series)[405](index=405&type=chunk)

Core Insights - Datasea Inc. reported an expected revenue of approximately $20.5 million for Q2 FY2025, marking an 81% increase from $11.3 million in the same period last year [1] - The gross profit for the same quarter is projected to be $0.41 million, reflecting a significant 310% increase from $0.1 million year-over-year [1] - The growth in revenue and gross profit is attributed to the expansion of the company's 5G AI multimodal digital business and increased market penetration in China [1][2] Company Overview - Datasea Inc. specializes in acoustic high-tech and 5G-AI multimodal digitalization, providing products, services, and solutions for enterprise and retail customers [3] - The company utilizes advanced R&D technology as the backbone for its products, operating its 5G multimodal digital segment on a cloud platform based on AI [3] - Datasea employs cutting-edge technologies in its acoustics business to combat viruses and is also developing applications in medical ultrasonic cosmetology [3] Strategic Initiatives - The company has established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware to facilitate its entry into the U.S. market as part of its global expansion strategy [3] - Datasea's CEO emphasized the importance of their focus on 5G + AI multimodal solutions, which has led to increased adoption of their high-margin technical products and services [2] - The strategic placement of acoustic high-tech products in over 400 high-quality physical retail stores across China is expected to enhance financial results in the upcoming quarters [2]

Core Insights - Datasea Inc. has signed new agreements to expand its acoustic high-tech product placement in 463 stores, projecting sales of 260,000 units and revenue of $19 million by the end of 2025 [1][2][4] Group 1: New Agreements and Market Expansion - The company has entered into 12 additional agreements with health management companies in Tianjin, expanding its reach to 200 beauty stores [1][6] - The new agreements are expected to drive sales of 120,000 additional units and generate approximately $8.2 million in revenue by year-end 2025 [1][6] - Datasea's acoustic high-tech products include sterilizers, sleep products, and 5G+AI Digital Service Systems tailored for the beauty industry [2][6] Group 2: Sales Projections and Revenue Goals - With the new agreements, Datasea aims for a total projected sale of 140,000 units and revenue of $11 million from the previously signed 263 stores by the end of 2025 [3][4] - The company anticipates achieving a full-year revenue forecast of $90 million for the fiscal year ending June 30, 2025 [4] Group 3: Product and Technology Focus - Datasea's products are designed to improve service quality and enhance customer experience in partnered stores [6] - The company continues to deploy its 5G+AI Digital System, which offers personalized customer services and data-driven marketing [6][7] - Datasea is committed to expanding its footprint across Northern China, with plans to increase partnered stores to 10,000 in the coming years [7]

Core Summary - The company, Datasea Inc, has signed cooperation agreements with 14 beauty industry service and management companies, targeting the sale of approximately 140,000 acoustic high-tech products by the end of 2025, which is expected to generate $11 million in revenue [1][2][3] - The agreements involve placing acoustic high-tech products in 263 beauty salons and body care stores in northern China, including Tianjin and Hebei Province, strengthening the company's market presence in the region [1] - The company plans to expand its customer base to up to 10,000 beauty and body care stores over the next 2-5 years, covering provinces in Tianjin, Hebei, Beijing, and Inner Mongolia [3][11] Product and Technology - The acoustic products included in the agreements are acoustic air sterilizers, sleep products, and the company's 5G AI Digital Service System specifically developed for beauty industry stores [2] - The 5G AI Digital System provides independent technical services to partnered stores, helping them offer better services to their customers [2] - The system integrates 5G and AI technologies to reshape service workflows, enabling precise customer need identification, personalized service recommendations, and efficient marketing through big data analytics [6] Strategic Expansion - The company aims to drive the digital transformation of the beauty and body care industry in northern China through its advanced acoustic high-tech products and 5G AI Digital Beauty System [7] - Datasea plans to continue expanding its sales channels and leveraging its technological expertise and marketing know-how to create sustainable value for merchants and consumers [7] - The company expects to increase its online and offline sales of acoustic high-tech products as the number of partner stores grows [11] Company Background - Datasea Inc is a Nevada-based digital technology company specializing in acoustic high-tech and 5G AI multimodal digital innovation, with a focus on ultrasonic, infrasound, and directional sound technology [8] - The company's 5G multimodal digital segment operates on a cloud platform based on AI, and it has established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware to mark its global presence [8]

Core Viewpoint - Datasea Inc. has successfully entered into a strategic sales agreement with Qingrong Digital Chain Technology Co., Ltd., which is expected to generate approximately $20.8 million annually over the next five years through the sale of its acoustic high-tech products [1][2]. Group 1: Event Overview - The product promotion event titled "5G AI: Unlocking the Future with Sound" was held in Tianjin, showcasing Datasea's advancements in acoustic technology and its 5G-AI multimodal platform, attended by over 200 industry leaders and representatives [3][4]. - The event highlighted the introduction of upgraded acoustic air sterilizers and sleep aid products, focusing on the beauty industry in China [4]. Group 2: Strategic Partnerships - The agreement with Qingrong involves the sale of up to 300,000 units of Datasea's acoustic products annually, including air disinfection machines and sleep aids, through Qingrong's extensive network of home decoration stores across China [5]. - Collaboration with the Tianjin Women Entrepreneurs Association aims to promote women-led business ventures and support sales efforts in Tianjin and the greater North China region [4]. Group 3: Company Profile - Datasea Inc. specializes in innovative acoustic high-tech and 5G AI multimodal digital technologies, focusing on ultrasonic, infrasound, and directional sound technology [6][7]. - The company has established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware to enhance its global presence and offer advanced acoustic solutions to the US market [7].

BEIJING, Nov. 19, 2024 /PRNewswire/ -- Datasea Inc. (Nasdaq: DTSS) ("Datasea" or the "Company"), a Nevada-registered digital technology company focused on innovations in acoustic high-tech and 5G AI multimodal digital technologies, today pre-announced that its revenue for the fiscal year ending June 30, 2025, is expected to be approximately $90.0 million. This represents an increase of $66.0 million, or 275.0%, compared to full-year revenue of $24.0 million in fiscal year 2024.As of October 31, 2024, Datase ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-38767 DATASEA INC. (Exact name of registrant as specified in its charter) | --- | --- | |--------------------------------------------------|-----------------------| | Nevad ...

Datasea's Top-Line Performance Driven by its Further Penetration of China's 5G AI Applications SegmentBEIJING, Nov. 13, 2024 /PRNewswire/ -- Datasea Inc. (NASDAQ: DTSS) ("Datasea" or the "Company"), a Nevada-based technology firm, today released its financial results for its first fiscal quarter ended September 30, 2024, reporting robust revenue of $21.1 million, representing 206% growth year-over-year. The increase in revenue was primarily due to the continued success of the Company's leading edge 5G AI mu ...

Core Viewpoint - Datasea Inc. has successfully closed a Regulation S offering, raising approximately $4.0 million through the sale of 1,932,224 shares at $2.06 per share, with significant participation from major shareholders, including the CEO, indicating strong confidence in the company's future [1][2]. Group 1: Offering Details - The Regulation S offering was closed on October 15, 2024, with the shares sold at a price equal to the closing price on September 26, 2024 [1]. - The investors are required to hold the shares for a minimum of 180 days [1]. Group 2: Use of Proceeds - The funds raised will be allocated to support business operations, including upgrades in acoustic high-tech product design, working capital for mass production and online sales, acquiring intellectual property, and promoting 5G AI multimodal digital business products [2]. Group 3: Company Overview - Datasea Inc. specializes in acoustic high-tech and 5G-AI multimodal digitalization, leveraging advanced R&D technology as the backbone for its products [3]. - The company has established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware to facilitate its entry into the U.S. market as part of its global expansion strategy [3].

BEIJING, Oct. 10, 2024 /PRNewswire/ -- Datasea Inc. (Nasdaq: DTSS) ("Datasea" or the "Company"), a Nevada-registered digital technology company focused on innovations in acoustics high-tech and 5G AI multimodal digital technologies, today pre-announced that its revenue for the first quarter of fiscal year 2025, ending September 30, 2024, is expected to be approximately $22.7 million. This represents an increase of approximately $15.8 million, or 230%, compared to $6.88 million in revenue for the first quart ...