Datasea(US:DTSS)2022-02-10 16:00Financial Performance - Total revenues for the six months ended December 31, 2021, were $9,650,609, compared to $135,239 for the same period in 2020, representing a significant increase [10]. - Gross profit for the six months ended December 31, 2021, was $309,894, up from $78,226 in the same period of 2020, indicating a strong improvement in profitability [10]. - Operating expenses totaled $3,724,842 for the six months ended December 31, 2021, compared to $1,935,243 for the same period in 2020, reflecting increased investment in operations [10]. - The net loss attributable to the company for the six months ended December 31, 2021, was $3,118,527, compared to a net loss of $1,830,860 in the same period in 2020 [10]. - The company reported a basic and diluted net loss per share of $0.13 for the six months ended December 31, 2021, compared to a loss of $0.09 in the same period in 2020 [10]. - For the six months ended December 31, 2021, the company reported a net loss of approximately $3.11 million, compared to a net loss of $1.83 million for the same period in 2020, indicating an increase in losses of 70.5% [24]. - The company had negative cash flow from operating activities of approximately $3.82 million for the six months ended December 31, 2021, compared to $1.85 million for the same period in 2020, reflecting a 106.5% increase in cash outflow [24]. Assets and Liabilities - Total assets as of December 31, 2021, were $11,873,723, compared to $3,895,117 as of December 31, 2020, showing substantial growth in asset base [8]. - Total liabilities as of December 31, 2021, were $6,802,163, compared to $3,817,406 in the previous year, indicating increased leverage [8]. - Cash and cash equivalents were $2,240,708 as of December 31, 2021, compared to $49,676 in the previous year, highlighting improved liquidity [7]. - The total accumulated deficit increased to $15,180,385 as of December 31, 2021, reflecting ongoing operational challenges [12]. - Total current assets as of December 31, 2021, were approximately $6.59 million, a significant increase from $667,369 as of June 30, 2021 [39]. Research and Development - Research and development expenses increased to $719,571 for the six months ended December 31, 2021, from $329,235 in the same period of 2020, reflecting a focus on innovation [10]. - The company has a total of 9 patents and 47 software copyrights, with 12 patent applications pending, indicating a focus on innovation and technology development [22]. - The company is focused on providing advanced technology solutions in 5G messaging, acoustic intelligence, and smart city sectors [22]. Financing Activities - The company issued 2,436,904 common shares for equity financing, raising $7,681,796 during the period [12]. - The company sold 2,436,904 shares of common stock at $3.48 per share on July 20, 2021, generating net proceeds of approximately $7.64 million, which alleviated liquidity concerns [24]. - The company is exploring additional funding options through private or public offerings to support its R&D and operations [26]. - Management believes that the company will have sufficient working capital to meet its operating needs for at least the next 12 months [26]. Inventory and Assets Management - The company had allowances for slow-moving and obsolete inventory amounting to $59,970 as of December 31, 2021 [49]. - The company recognized no impairment loss on long-lived assets for the six and three months ended December 31, 2021 [58]. - The net Right of Use (ROU) assets for operating leases were $962,056 as of December 31, 2021, with total operating lease liabilities of $917,544 [64]. Taxation and Deferred Revenue - The Company is subject to income taxes based on income derived from the tax jurisdiction in which each entity is domiciled, primarily in the PRC [125]. - The U.S. parent company has net operating loss (NOL) carry forwards of $1.57 million as of December 31, 2021, and $0.94 million as of June 30, 2021, with a 100% deferred tax asset valuation allowance established due to uncertainty in realizing these benefits [126]. - Deferred revenue primarily consists of local government financial support for technology innovation, which will be recorded as income upon passing inspection [60].