Datasea Reports Second Quarter Fiscal Year 2022 Earnings and Provides Business Updates
February 11 2022 - 8:30AM
Datasea Inc. (NASDAQ: DTSS) (“Datasea” or the “Company”),
incorporated in Nevada in September 2014, is a digital technology
corporation engaged in three converging and innovative business
segments: 5G messaging, acoustic intelligence and smart city in
China, today announced financial results for the quarter ended
December 31, 2021 and provided an update on its key strategic and
operational initiatives.
“Datasea had a solid quarter as our 5G messaging business
started to demonstrate its great value and capability to
improve the Company’s competitiveness and create new sources of
revenue and profits. As one of the first movers in this industry,
Datasea has been a leading 5G messaging service provider in China.
We will continue to leverage our advantages of entering the market
early to build brand recognition and customer loyalty,” said Zhixin
Liu, CEO of Datasea. “Benefiting from our proprietary technologies
and great synergy effects among the business lines, such as
acoustic intelligence and smart city, we believe that our business
development is on track and is supported by a strong product
portfolio. Datasea’s business goals are to focus on the sustainable
development, and we are integrating it into every business
decision.”
Second Quarter 2022 Financial Highlights
- Revenue was $8,979,479 and $126,184 for the three months ended
December 31, 2021 and 2020, respectively, representing an increase
of $8,853,295, or 7016%.
- Gross profit was $246,299 and $86,070 for the three months
ended December 31, 2021 and 2020, respectively, representing an
increase of $160,229, or 186%. The increase in gross profit was
mainly due to the delivery of services related to the 5G SMS
service platform in 2021.
- R&D expenses were $432,355 and $134,509 for the three
months ended December 31, 2021 and 2020, respectively, representing
an increase of $297,846, or 221%.
- 5G messaging sales revenue increased more than 900% this
quarter, compared with the immediate prior quarter ended September
30, 2021, representing nine-month consecutive growth.
Second Quarter 2022 Business Highlights
5G Messaging
- Client expansion. Since 2021, as a leading
service provider in the field of 5G messaging in China, the Company
has been engaged for services by 100+ institutional clients from
express delivery, catering, tourism, e-commerce, financing, and
technology industry to establish message marketing cloud platform
(“5G MMCP”).
- Marketing and sales expansion. From October
2021 to the end of December 2021, the Company was engaged in
various contracts that were related to SMS, integrated 5G message
marketing cloud platform (“5G IMMCP”) and value-added services,
with a total contract value of approximately $14.73 million, among
which $9.6 million worth of services have been delivered.
- Industry recognition. In December 2021, the
Company assisted ZTO Express to complete the first placement order
through 5G messaging services in express delivery industry. The
Company cooperated with the National Engineering Laboratory for
Logistics Information Technology (“National Engineering
Laboratory”), and continually worked to promote the formulation of
5G Messaging standards in the express industry.
Acoustic Intelligence
The Company commits to tap acoustic intelligence’s full business
potential and wield acoustic intelligence across industries in
meaningful ways.
- Research Partnerships. The Company has entered
into partnerships with top-notch institutions in this area,
equipped itself with solid R&D capability, and released China’s
inaugural white paper “Industry Development and Technology
Application of Acoustic Intelligence in China” with co-authors,
Institute of Cloud Computing and Big Data, China Academy of
Information and Communications Technology.
- Product lineup. Currently, the Company has
four flagship products to unfold the commercial possibilities of
acoustic intelligence in the most wanted areas such as health,
security, and environment protection. These products are 1)
ultrasonic sound sterilization and antivirus equipment (the
first-ever sterilization and antivirus equipment that combines
ultrasonic sound effects with optics to address the Covid-19
disinfecting needs); 2) Tianer voice recognition alarm; 3)
directional sound recognizer (a solution for noise pollution); 4)
sound effect refreshing directional sound device. Datasea has
prepared samples, completed laboratory tests and user pilot tests,
entered mass production to varying degrees for these products, and
they are expected to be introduced to the market in the fiscal year
of 2022.
Smart City
- Client expansion. From October 2021 to the end
of December 2021, the Company was engaged in various contracts that
were related to smart community solutions and food safety
supervision system of the Smart Canteen.
- Product update. The Company recently laid out
a series of upgrades to meet with the client needs in different
scenarios and enhance the system’s analysis efficiency and
integration capability.
Webcast and Conference Call Information
The Company will host a conference call and webcast to discuss
its financial results at 8 a.m. ET (9 p.m. Beijing and Hong Kong
Time) on Monday, February 14, 2022.
Dial-in details for the earnings conference call are as
follows:
Toll
Free: 1-877-451-6152 |
Toll/International: 1-201-389-0879 |
|
Participants should dial-in at least 5 minutes before the
scheduled start time. Additionally, a live webcast of the
conference call will be available at:
https://viavid.webcasts.com/starthere.jsp?ei=1530184&tp_key=e52c484915
A replay of the conference call will be accessible approximately
soon after the conclusion of the live, by dialing the following
telephone numbers:
Toll
Free: 1-844-512-2921Toll/International: 1-412-317-6671Replay
Pin Number: 13727206Replay Start: Monday February 14,
2022, 11:00 AM ETReplay Expiry: Monday February 21, 2022,
11:59 PM ET |
|
About Datasea Inc. Datasea Inc., through its
variable interest entity, Shuhai Information Technology Co., Ltd.,
a digital technology company in China, engages in three converging
and innovative industries: smart city, acoustic intelligence and 5G
messaging. Datasea leverages facial recognition technology and
other visual intelligence algorithms, combined with cutting-edge
acoustic and non-visual intelligence algorithms, to provide smart
city solutions that meet the security needs of residential
communities, schools and commercial enterprises. Most recently, in
response to the growing utilization of 5G technologies and the
overall initiative to utilize Datasea’s technology capabilities to
expand business coverage and revenue resources, Datasea has also
strategically expanded business coverage to 5G messaging and smart
payment solutions. Datasea has been certified as one of the High
Tech Enterprises (jointly issued by the Beijing Science and
Technology Commission, Beijing Finance Bureau, Beijing State
Taxation Bureau and Beijing Local Taxation Bureau) and one of the
Zhongguancun High Tech Enterprises (issued by the Zhongguancun
Science Park Administrative Committee) in recognition of the
company’s achievement in high technology products. For additional
company information, please visit: www.dataseainc.com. Datasea
routinely posts important information on its website.
Cautionary Note Regarding Forward-Looking
Statements This 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," “objective” and
similar terms. 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 which
are beyond Datasea's control, which may cause Datasea's actual
results, performance or achievements (including the RMB/USD value
of its anticipated benefit to Datasea as described herein) 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 law.
Datasea investor and media
Contact:International Elite Capital Inc. Annabelle
ZhangTelephone: +1(646) 866-7989 Email:
datasea@iecapitalusa.com
DATASEA INC.CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS(UNAUDITED)
|
|
SIX MONTHS ENDEDDECEMBER 31, |
|
|
THREE MONTHS ENDEDDECEMBER
31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
9,650,609 |
|
|
$ |
135,239 |
|
|
$ |
8,979,479 |
|
|
$ |
126,184 |
|
Cost of goods sold |
|
|
9,340,715 |
|
|
|
57,013 |
|
|
|
8,733,180 |
|
|
|
40,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
309,894 |
|
|
|
78,226 |
|
|
|
246,299 |
|
|
|
86,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling |
|
|
386,991 |
|
|
|
174,036 |
|
|
|
156,192 |
|
|
|
119,971 |
|
General and administrative |
|
|
2,618,280 |
|
|
|
1,431,972 |
|
|
|
1,498,809 |
|
|
|
812,536 |
|
Research and development |
|
|
719,571 |
|
|
|
329,235 |
|
|
|
432,355 |
|
|
|
134,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
3,724,842 |
|
|
|
1,935,243 |
|
|
|
2,087,356 |
|
|
|
1,067,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(3,414,948 |
) |
|
|
(1,857,017 |
) |
|
|
(1,841,057 |
) |
|
|
(980,946 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
5,247 |
|
|
|
(12,202 |
) |
|
|
5,224 |
|
|
|
(19,854 |
) |
Interest income |
|
|
32,893 |
|
|
|
1,804 |
|
|
|
12,359 |
|
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income
(expenses), net |
|
|
38,140 |
|
|
|
(10,398 |
) |
|
|
17,583 |
|
|
|
(19,646 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax |
|
|
(3,376,808 |
) |
|
|
(1,867,415 |
) |
|
|
(1,823,474 |
) |
|
|
(1,000,592 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before noncontrolling
interest |
|
|
(3,376,808 |
) |
|
|
(1,867,415 |
) |
|
|
(1,823,474 |
) |
|
|
(1,000,592 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: loss attributable to
noncontrolling interest |
|
|
(258,281 |
) |
|
|
(36,555 |
) |
|
|
(146,181 |
) |
|
|
(36,555 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to the Company |
|
|
(3,118,527 |
) |
|
|
(1,830,860 |
) |
|
|
(1,677,293 |
) |
|
|
(964,037 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive item |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
gain attributable to the Company |
|
|
69,992 |
|
|
|
112,543 |
|
|
|
74,689 |
|
|
|
54,064 |
|
Foreign currency translation
gain (loss) attributable to noncontrolling interest |
|
|
2,294 |
|
|
|
(1,390 |
) |
|
|
2,548 |
|
|
|
(1,390 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to the Company |
|
$ |
(3,048,535 |
) |
|
$ |
(1,718,317 |
) |
|
$ |
(1,602,604 |
) |
|
$ |
(909,973 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to noncontrolling interest |
|
$ |
(255,987 |
) |
|
$ |
(37,945 |
) |
|
$ |
(143,633 |
) |
|
$ |
(37,945 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
share |
|
$ |
(0.13 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used
for computing basic and diluted loss per share |
|
$ |
23,637,930 |
|
|
$ |
21,088,837 |
|
|
|
23,919,867 |
|
|
|
21,233,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATASEA INC.CONSOLIDATED
BALANCE SHEETS
|
|
DECEMBER 31, 2021 |
|
|
JUNE 30,2021 |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash |
|
$ |
2,240,708 |
|
|
$ |
49,676 |
|
Accounts receivable |
|
|
5,223,231 |
|
|
|
1,856 |
|
Inventory |
|
|
210,808 |
|
|
|
194,264 |
|
Value-added tax prepayment |
|
|
156,995 |
|
|
|
171,574 |
|
Prepaid expenses and other current assets |
|
|
1,297,321 |
|
|
|
468,615 |
|
Total current assets |
|
|
9,129,063 |
|
|
|
885,985 |
|
|
|
|
|
|
|
|
|
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
Security deposit for rents |
|
|
275,170 |
|
|
|
256,987 |
|
Long term investment |
|
|
62,738 |
|
|
|
- |
|
Property and equipment, net |
|
|
249,393 |
|
|
|
309,408 |
|
Intangible assets, net |
|
|
1,195,303 |
|
|
|
1,092,147 |
|
Right-of-use assets, net |
|
|
962,056 |
|
|
|
1,350,590 |
|
Total noncurrent assets |
|
|
2,744,660 |
|
|
|
3,009,132 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
11,873,723 |
|
|
$ |
3,895,117 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,022,008 |
|
|
$ |
174,718 |
|
Unearned revenue |
|
|
256,108 |
|
|
|
189,527 |
|
Deferred revenue |
|
|
47,053 |
|
|
|
46,439 |
|
Accrued expenses and other payables |
|
|
502,909 |
|
|
|
561,674 |
|
Due to related party |
|
|
56,541 |
|
|
|
69,305 |
|
Loans payable |
|
|
- |
|
|
|
1,486,819 |
|
Operating lease liabilities |
|
|
688,520 |
|
|
|
730,185 |
|
Total current liabilities |
|
|
6,573,139 |
|
|
|
3,258,667 |
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
229,024 |
|
|
|
558,739 |
|
Total noncurrent liabilities |
|
|
229,024 |
|
|
|
558,739 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
6,802,163 |
|
|
|
3,817,406 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 375,000,000 shares authorized,
24,244,130 and 21,474,138 shares issued and outstanding,
respectively |
|
|
24,244 |
|
|
|
21,474 |
|
Additional paid-in capital |
|
|
20,382,389 |
|
|
|
12,086,788 |
|
Accumulated comprehensive income |
|
|
343,242 |
|
|
|
273,250 |
|
Accumulated deficit |
|
|
(15,180,385 |
) |
|
|
(12,061,858 |
) |
TOTAL COMPANY STOCKHOLDERS’ EQUITY |
|
|
5,569,490 |
|
|
|
319,654 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
(497,930 |
) |
|
|
(241,943 |
) |
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
5,071,560 |
|
|
|
77,711 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
11,873,723 |
|
|
$ |
3,895,117 |
|
|
|
|
|
|
|
|
|
|
DATASEA INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(UNAUDITED)
|
|
SIX MONTHS ENDEDDECEMBER 31 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Loss including noncontrolling interest |
|
$ |
(3,376,808 |
) |
|
$ |
(1,867,415 |
) |
Adjustments to reconcile loss including noncontrolling interest to
net cash used in operating activities: |
|
|
|
|
|
|
|
|
Loss on disposal on fixed assets |
|
|
460 |
|
|
|
- |
|
Depreciation and amortization |
|
|
233,544 |
|
|
|
68,239 |
|
Bad debt expense |
|
|
286,055 |
|
|
|
- |
|
Operating lease expense |
|
|
435,762 |
|
|
|
369,810 |
|
Stock compensation expense |
|
|
294,750 |
|
|
|
- |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(5,175,377 |
) |
|
|
- |
|
Inventory |
|
|
(13,850 |
) |
|
|
(27,296 |
) |
Value-added tax prepayment |
|
|
16,702 |
|
|
|
(49,206 |
) |
Prepaid expenses and other current assets |
|
|
(1,165,822 |
) |
|
|
(123,475 |
) |
Accounts payable |
|
|
4,803,114 |
|
|
|
22,838 |
|
Advance from customers |
|
|
63,507 |
|
|
|
- |
|
Accrued expenses and other payables |
|
|
191,289 |
|
|
|
89,762 |
|
Payment on operating lease liabilities |
|
|
(417,948 |
) |
|
|
(329,549 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
|
(3,824,622 |
) |
|
|
(1,846,292 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of property and equipment |
|
|
(23,787 |
) |
|
|
(91,214 |
) |
Acquisition of intangible assets |
|
|
(198,151 |
) |
|
|
(8,482 |
) |
Long-term investment |
|
|
(62,186 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities |
|
|
(284,124 |
) |
|
|
(99,696 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Due to related parties |
|
|
(13,391 |
) |
|
|
- |
|
Payment of loan payable |
|
|
(1,493,237 |
) |
|
|
- |
|
Proceeds from capital contribution from a major shareholder |
|
|
62,186 |
|
|
|
- |
|
Net proceeds from issuance of common stock |
|
|
7,681,796 |
|
|
|
931,000 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing
activities |
|
|
6,237,354 |
|
|
|
931,000 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
|
62,424 |
|
|
|
23,449 |
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash |
|
|
2,191,032 |
|
|
|
(991,539 |
) |
|
|
|
|
|
|
|
|
|
Cash, beginning of
period |
|
|
49,676 |
|
|
|
1,665,936 |
|
|
|
|
|
|
|
|
|
|
Cash, end of
period |
|
$ |
2,240,708 |
|
|
$ |
674,397 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
Cash paid for income tax |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
Transfer of prepaid software
development expenditure to intangible assets |
|
$ |
50,000 |
|
|
$ |
850,000 |
|
Right-of-use assets obtained
in exchange for new operating lease liabilities |
|
$ |
- |
|
|
$ |
1,276,944 |
|
Shares issued for accrued
bonus to officers |
|
$ |
259,023 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
IMPORTANT NOTICE TO USERS (summary only, please refer to
the Form 10-Q for full text of notice); All information is
unaudited unless otherwise noted or accompanied by an audit opinion
and is subject to the more comprehensive information contained in
our SEC reports and filings. We do not endorse third-party
information. All information speaks as of the last fiscal quarter
or year for which we have filed a Form 10-K or 10-Q, or for
historical information the date or period expressly indicated in or
with such information. We undertake no duty to update the
information. Forward-looking statements are subject to risks and
uncertainties described in our Forms 10-Q and 10-K.
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