Datasea(DTSS) - 2021 Q4 - Annual Report

Financial Performance - The company reported revenue of $175,138 for the year ended June 30, 2021, a significant decrease from $1,414,781 in 2020, primarily due to a shift towards 5G messaging and smart payment services [388]. - Gross profit for the year ended June 30, 2021, was $94,003, down from $1,268,400 in 2020, reflecting increased hardware costs and a shift in revenue sources [392]. - The company incurred a net loss of $4,648,477 for the year ended June 30, 2021, compared to a net loss of $1,863,253 in 2020, attributed to business expansion and increased R&D investment [396]. - As of June 30, 2021, the company had a working capital deficit of $2,372,682, with current assets of $885,985, down from a working capital of $2,609,032 in 2020 [399]. - Non-operating income (expenses) was $(23,030) in 2021, compared to $46,958 in 2020, indicating a decline in interest income and an increase in other expenses [395]. Research and Development - Research and development expenses increased to $851,839 in 2021 from $1,114,486 in 2020, with plans to invest approximately $10 million in technological product development over the next three years [393]. - The company is focusing on long-term technological development and strategic deployment to enhance sustainable growth and potential energy accumulation [407]. - The company emphasizes the fusion of perception technologies and cognitive decision-making to create business value for customers [408]. Strategic Agreements and Investments - The company signed a strategic agreement worth approximately $14.76 million (RMB 95.34 million) to provide smart systems for canteens and restaurants in at least 200 schools over the next two years [390]. - Net cash used in investing activities was $168,685 for the year ended June 30, 2021, compared to $306,813 for the year ended June 30, 2020, indicating a decrease of approximately 45% [404]. Cash Flow and Financing - Net cash provided by financing activities was $2,448,847 during the year ended June 30, 2021, a significant increase from a net cash used of $84,842 in the previous year [405]. Market Position and Future Outlook - The company expects to generate revenue through the expansion of smart city, 5G messaging, and acoustic intelligence services, supported by a strong product portfolio [398]. - Datasea is positioned as an emerging technology company in China, dedicated to intelligent product solutions and value-added services [408]. - The company has strategically entered 5G messaging and smart payment sectors, enhancing overall product value and ecological viability [407]. Operational Changes - Selling expenses increased by 30% to $568,034 in 2021, primarily due to increased payroll expenses for sales personnel [392]. - Integration of visual perception technology and artificial intelligence big data technology aims to shift from passive monitoring to active prevention in security solutions [407]. Financial Condition - There are no off-balance sheet arrangements that are likely to affect the company's financial condition or capital resources [409].