Datasea Inc.
(NASDAQ: DTSS)
(“Datasea” or the
“Company”), a technology company engaged in
providing smart security solutions and developing education-related
technologies in China, reported results for the fiscal fourth
quarter and full year ended June 30, 2020.
Fiscal Fourth Quarter 2020 and Recent Operational
Highlights:
- Signed two agreements with Beijing
Hangteng Property Management and Jinghua Granary International
Trade Co., respectively, for the Company’s Public Community
Security System, and two agreements with Beijing Xuanwu Hongqi
Spare-time University and Nanjing Normal University Subsidiary
Primary School, respectively, for the Company’s Safe Campus
Management System.
- Entered into six service agreements
involving the Company’s Smart Information Service System with
Shenzhen Linghang Haocheng Education Technology Co., an education
training company, Shenzhen Weisou Technology Co., an application
operator, and four gas stations in Shenzen and Shanwei, all located
on the Guangdong province.
- Expanded the Company’s marketing
efforts by entering into a Cooperation Framework Agreement with
China Africa Friendship Town Investment Group Limited to establish
a general framework and promote Datasea’s products across several
countries in Africa.
- Received a second subsidy from the
Harbin Municipal Government to enhance and customize the Company’s
Safe Campus Management System.
- Signed an agreement with Beijing
Tengyuejunjie Parking Management to install the Company’s
proprietary Public Community Security System in Nantaipingzhuang
Beixiang, the first-of-its-kind arrangement in Beijing.
- Selected by the Harbin Municipal
Government of Heilongjiang Province to conduct pilot projects of
the Company’s Safe Campus Management System at two new school
campuses, in addition to receiving a $113,000 USD subsidy from the
Harbin Municipal Government.
- Secured 33 purchase orders for
Datasea’s customized hardware and proprietary software solutions
that are being utilized in public spaces on campuses, shopping
malls, scenic areas, residential areas, and factories, with cash
inflow from customers in full amount.
Management Commentary
“Over the past few months, we have been able to gain momentum as
a result of our diversified customer base and growing portfolio of
robust product offerings, which has generated positive top line
results for the first time in Datasea’s history,” said Chairman and
CEO, Ms. Liu Zhixin. “I am proud to share that we have been engaged
in a total of 94 agreements: 64 agreements with public communities,
24 agreements with educational institutions, and 6 with respect to
our big data value-added services. In addition to our core
offerings of the Safe Campus, Public Community, and Scenic Area
Security Systems, we have been able to leverage our big data and
Smart 3-D technology to create a Smart Information Service System,
another product we can now offer to customers. This novel system,
in addition to the Epidemic Control System developed last quarter,
showcases our R&D ability to innovate and adapt our core
technology to various market needs.
“In addition to expanding our R&D initiatives, we also plan
to focus on growing our dynamic sales channels through our sales
team and channel agents, in our efforts to commercialize the
business domestically and internationally. As part of our
development strategy, we recently launched marketing operations in
Africa and look to further expand internationally to capture as
much of the global market share as possible. Our team is certainly
encouraged by the results we have achieved thus far, and we look
forward to continue growing as a company that offers customers
state of the art smart security solutions.”
Fiscal Fourth Quarter 2020 Financial
Results
Total revenue was $1.4 million for the fiscal fourth quarter
2020 compared to $0 in the same year-ago period. The increase in
revenue was primarily due to twenty recognized implementations of
the Company’s Safe Campus Management System, in addition to the
sales of software and hardware customized solutions developed to
address certain aspects of the pandemic outbreak across a number of
schools and public communities.
Selling expense increased to $296,000 from $16,000 in the same
year-ago period. The increase was primarily driven by a significant
investment to the Teenager Scientific Quality Cultivation
project.
General and administrative expenses increased to $247,000 from
$118,000 in the same year-ago period. The increase was primarily
due to an increase in rent and labor expenses.
Research and development expenses increased to $315,000 from
$35,000 in the same year-ago period. The increase was primarily due
to investments in additional R&D personnel and the development
of the Tour Site Security system and the Facial Recognition and Eye
Protection system.
Net profit totaled $413,000 compared to net loss of $(140,000)
in the same year-ago period.
Full Year Fiscal 2020 Financial Results
Total revenue was $1.4 million for the full fiscal year 2020
compared to $0 in the same year-ago period. The increase in revenue
was primarily due to twenty recognized implementations of the
Company’s Safe Campus Management System, in addition to the sales
of software and hardware customized solutions for the pandemic
outbreak across a number of schools and public communities.
Selling expense increased to $439,000 from $199,000 in the same
year-ago period. The increase in selling expense was primarily
attributed to a payment made to a service provider, Beijing R&D
Education Technology, to develop and market an education platform
for teachers and students.
General and administrative expense increased to $1.6 million
from $1.1 million in the same year-ago period. The increase was
primarily due to increases in rent, property management, and salary
expenses.
Research and development expenses increased to $1.1 million from
$168,000 in the same year-ago period. The increase was primarily
due to investments in additional R&D personnel, the Tour Site
Security system, and the Facial Recognition and Eye Protection
system.
Net loss totaled $(1.9) million compared to net loss of $(1.4)
million in the same year-ago period.
About Datasea
Inc.
Datasea is a technology company in China engaged
in providing smart security solutions and developing
education-related technologies. Datasea leverages its proprietary
technologies, intellectual property, innovative products and market
intelligence to provide comprehensive and optimized security
solutions and education-related technologies to its clients. For
additional company information, please
visit: www.dataseainc.com.
Cautionary Note Regarding Forward-Looking
StatementsThis press release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates," "target," "going forward," "outlook" and similar
statements. Such statements are based upon management's current
expectations and current market and operating conditions, and
relate to events that involve known or unknown risks, uncertainties
and other factors, all of which are difficult to predict and many
of which are beyond Datasea's control, which may cause Datasea's
actual results, performance or achievements (including, without
limitation, the performance and related results of operations
arising from Datasea’s contracts and products addressed in this
press release), Datasea’s ability to maintain and generate any
revenue from the agreements subject of this press release, to
differ materially and in an adverse manner from anticipated results
contained or implied in the forward-looking statements. Further
information regarding these and other risks, uncertainties or
factors is included in Datasea's filings with the U.S. Securities
and Exchange Commission, which are available at www.sec.gov.
Datasea does not undertake any obligation to update any
forward-looking statement as a result of new information, future
events or otherwise, except as required under the law.
Investor Relations Contact:
Gateway Investor Relations
Matt Glover and John Yi
DTSS@gatewayir.com
949-574-3860
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