Datasea(US:DTSS)2025-11-13 19:31Financial Performance - Revenues for the three months ended September 30, 2025, were $13,813,551, a decrease of 34.5% compared to $21,081,094 for the same period in 2024[10]. - Gross profit improved to $1,169,092 for the three months ended September 30, 2025, compared to $196,981 in the prior year, marking a significant increase[10]. - Operating expenses decreased to $1,457,715 for the three months ended September 30, 2025, down from $2,227,531 in 2024, a reduction of 34.5%[10]. - The net loss attributable to the Company for the three months ended September 30, 2025, was $201,026, compared to a net loss of $1,961,989 in the same period of 2024, reflecting an improvement of 89.8%[10]. - For the three months ended September 30, 2025, the Company reported a net loss of approximately $0.20 million, compared to a net loss of $1.96 million for the same period in 2024[32]. - The net loss for the three months ended September 30, 2025, was $413,389, a slight improvement from a net loss of $452,170 in the same period of 2024[47]. - Revenue for the same period was $13,813,551, a decrease of $7,267,543 or 34.47% compared to $21,081,094 in the previous year, due to a strategic contraction of low-margin business[167]. Assets and Liabilities - Total assets increased to $7,691,360 as of September 30, 2025, up from $6,735,881 as of June 30, 2025, representing a growth of 14.2%[9]. - Total current assets increased to $2,387,658 as of September 30, 2025, from $1,734,402 as of June 30, 2025, representing a growth of approximately 37.7%[47]. - Total liabilities increased to $4,564,383 as of September 30, 2025, from $3,735,390 as of June 30, 2025, indicating a rise of approximately 22.2%[47]. - The total stockholders' equity rose to $3,013,452 as of September 30, 2025, compared to $2,942,195 as of June 30, 2025, an increase of 2.4%[9]. - The Company had an accumulated deficit of approximately $44.73 million as of September 30, 2025[32]. Cash Flow and Investments - Cash and cash equivalents increased to $745,264 as of September 30, 2025, from $620,807 at the beginning of the period, representing a growth of 20.1%[14]. - Cash flows from operating activities generated $879,299 for the three months ended September 30, 2025, compared to a cash outflow of $732,655 in the same period of 2024[14]. - The Company acquired intangible assets amounting to $1,551,009 during the three months ended September 30, 2025[14]. - The total amount of unearned revenue increased to $180,195 as of September 30, 2025, up from $150,088 as of June 30, 2025, reflecting a growth of approximately 20.5%[111]. Stock and Equity Transactions - The Company issued 95,377 shares for stock compensation expense, contributing to an increase in additional paid-in capital to $47,582,488 as of September 30, 2025[11]. - The Company granted 398,925 restricted shares to Chairwoman and CEO Ms. Zhixin Liu for the acquisition of software copyrights, with the purchase accounted at a historical cost of $0[136]. - The Company recorded stock compensation expenses of $3,900 and $4,500 to independent directors for the three months ended September 30, 2025 and 2024, respectively[140]. - The Company issued 18,367 shares to a consultant, with a fair value of $36,000 recorded as stock compensation expense for the three months ended September 30, 2025[142]. Research and Development - Research and development expenses are expensed in the period incurred, primarily consisting of materials, salaries, and third-party fees[79]. - The Company achieved a major technological breakthrough in AI-enhanced acoustic coupling for neural regulation and precision medicine in August 2025, entering an accelerated commercialization stage[172]. - The Company has established in-depth cooperation with top research institutions to drive ongoing innovation in acoustic technologies[176]. - New product developments include ultrasonic disinfectants and AI medical robots, targeting healthcare and medical aesthetics sectors[199]. Strategic Initiatives - The Company established a wholly owned subsidiary, Datasea Acoustic, LLC, in Delaware on July 31, 2023, to expand its products to the North American market[30]. - The Company formed a joint venture, Nanjing Shuhai Equity Investment Fund Management Co. Ltd., with a 99% ownership interest to facilitate access to government funding for new technology development[20]. - Datasea plans to strengthen its competitive advantages through scaled sales and international deployment of high-margin acoustic high-tech products and AI multimodal technology solutions in fiscal year 2026[175]. - The Company is exploring options to raise additional funds through strategic investors or public offerings to support its operations and R&D[33]. Market and Product Development - Flagship products like the Tianer sterilization series and Star Dream sleep-aid systems are driving high-margin growth, with plans for overseas market expansion[192]. - The Company has built a comprehensive sound-based health ecosystem covering environmental sterilization, physiological regulation, cognitive enhancement, and sleep improvement[191]. - The Company is developing high-end clinical intervention systems for tertiary hospitals and portable therapeutic devices for community rehabilitation centers, extending neuromodulation applications[189]. - The Company is focusing on five key sub-sectors: acoustic healthcare, acoustic health, acoustic industry, acoustic agriculture, and acoustic IoT, leveraging cutting-edge technologies[206].