DataSea Inc. Files 2024 Annual Report

TL;DR

DATASEA INC. 10-K FILED: FULL YEAR RESULTS & BUSINESS OVERVIEW FOR FY24.

AI Summary

DataSea Inc. filed its annual report on Form 10-K for the fiscal year ended June 30, 2024. The company, formerly known as Rose Rock Inc. until January 21, 2015, is incorporated in Nevada and headquartered in Beijing, China. DataSea Inc. operates in the prepackaged software services industry, with its principal executive offices located at 20th Floor, Tower B, Guorui Plaza 1 Ronghua South Road, Technological Development Zone, Beijing, People's Republic of China.

Why It Matters

This filing provides investors with a comprehensive overview of DataSea Inc.'s financial performance and business operations for the fiscal year ended June 30, 2024, including any significant changes or risks.

Risk Assessment

Risk Level: medium — The filing is a standard annual report, but the nature of the software industry and international operations can introduce inherent risks not detailed in this summary.

Key Numbers

• FY2024 — Fiscal Year End (The report covers the period ending June 30, 2024.)
• 001-38767 — SEC File Number (Identifies the company's filings with the SEC.)

Key Players & Entities

• DATASEA INC. (company) — Registrant
• June 30, 2024 (date) — Fiscal year end
• Rose Rock Inc. (company) — Former company name
• January 21, 2015 (date) — Date of name change
• Nevada (jurisdiction) — State of incorporation
• Beijing, People's Republic of China (location) — Principal executive offices location
• 001-38767 (identifier) — Commission file number
• 7372 (industry_code) — Standard Industrial Classification

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value DTSS NASDAQ Capital Market
• $3.52 — ed by reference to the closing price of $3.52 for the Registrant's common stock on De
• $23,975,867 — r ending June 30, 2024, our revenue was $23,975,867, reflecting a 558.6% increase compared
• $21.37 million — ately RMB 152.40 million (equivalent to $21.37 million) in cash prepayments from large custome
• $100 million — will be recognized as revenue, exceeds $100 million. Datasea's common stock currently list

Filing Documents

• ea0214480-10k_datasea.htm (10-K) — 2500KB
• ea021448001ex21-1_datasea.htm (EX-21.1) — 7KB
• ea021448001ex23-1_datasea.htm (EX-23.1) — 2KB
• ea021448001ex31-1_datasea.htm (EX-31.1) — 10KB
• ea021448001ex31-2_datasea.htm (EX-31.2) — 10KB
• ea021448001ex32-1_datasea.htm (EX-32.1) — 6KB
• ea021448001ex97_datasea.htm (EX-97) — 33KB
• image_001.jpg (GRAPHIC) — 110KB
• image_002.jpg (GRAPHIC) — 19KB
• image_003.jpg (GRAPHIC) — 53KB
• image_004.jpg (GRAPHIC) — 6KB
• image_005.jpg (GRAPHIC) — 8KB
• image_006.jpg (GRAPHIC) — 7KB
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• image_009.jpg (GRAPHIC) — 9KB
• image_010.jpg (GRAPHIC) — 110KB
• image_011.jpg (GRAPHIC) — 42KB
• image_012.jpg (GRAPHIC) — 53KB
• image_013.jpg (GRAPHIC) — 6KB
• image_014.jpg (GRAPHIC) — 8KB
• image_015.jpg (GRAPHIC) — 7KB
• image_016.jpg (GRAPHIC) — 8KB
• image_017.jpg (GRAPHIC) — 8KB
• image_018.jpg (GRAPHIC) — 11KB
• image_019.jpg (GRAPHIC) — 78KB
• ex97_001.jpg (GRAPHIC) — 3KB
• ex97_002.jpg (GRAPHIC) — 4KB
• ex97_003.jpg (GRAPHIC) — 5KB
• 0001213900-24-082285.txt ( ) — 12955KB
• dtss-20240630.xsd (EX-101.SCH) — 97KB
• dtss-20240630_cal.xml (EX-101.CAL) — 68KB
• dtss-20240630_def.xml (EX-101.DEF) — 402KB
• dtss-20240630_lab.xml (EX-101.LAB) — 762KB
• dtss-20240630_pre.xml (EX-101.PRE) — 415KB
• ea0214480-10k_datasea_htm.xml (XML) — 1738KB

Forward-Looking Statements

Forward-Looking Statements iii PARTI Item 1. Description of Business 1 Item 1A.

Risk Factors

Risk Factors 47 Item 1B. Unresolved Staff Comments 70 Item 1C. Cybersecurity 71 Item 2. Description of Property 71 Item 3.

Legal Proceedings

Legal Proceedings 72 Item 4. Mine Safety Disclosure 72 PARTII Item 5. Market for Common Equity and Related Stockholder Matters 73 Item 6. [Reserved] 73 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 73 Item 7A.

Quantitative and Qualitative Disclosures

Quantitative and Qualitative Disclosures About Market Risk 108 Item 8.

Financial Statements

Financial Statements 108 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 108 Item 9A.

Controls and Procedures

Controls and Procedures 108 Item 9B. Other Information 112 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 112 PART III Item 10. Directors, Executive Officers and Corporate Governance 113 Item 11.

Executive Compensation

Executive Compensation 116 Item 12.

Security Ownership of Certain Beneficial

Security Ownership of Certain Beneficial 119 Item 13. Certain Relationships and Related Transactions, and Director Independence 120 Item 14. Principal Accountant Fees and Services 121 PARTIV Item 15. Exhibits, Financial Statement Schedules 122 Item 16. Form 10–K Summary 124

Signatures

Signatures 125 i All references to "Company," "we," or "us" in this report refer to Datasea Inc., a Nevada corporation, its consolidated subsidiaries, and the variable interest entity ("VIE"), unless the context otherwise indicates. All references to "Datasea" in this report refer to Datasea Inc., a Nevada corporation, not including its consolidated subsidiaries and VIE, unless the context otherwise indicates. "VIE" or "consolidated VIE" refers to Shuhai Information Technology Co., Ltd. ("Shuhai Beijing"), a variable interest entity. "WFOE" or "PRC Subsidiary," which is a wholly foreign owned entity and is a corporation organized under the laws of the PRC and wholly owned by us, through our subsidiary. The WFOE is Tianjin Information Sea Information Technology Co., Ltd. ("Tianjin Information" or "WFOE"). "PRC" or "China" refers to the People's Republic of China, excluding, for the purpose of this report only, Taiwan. "RMB" or "Renminbi" refers to the legal currency of China and "$", "US$", "USD" or "U.S. Dollars" refers to the legal currency of the United States. Our reporting currency is the US$. The functional currency of the entities located in China is the RMB. For the entities whose functional currency is the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into US$ are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction date

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains forward-looking of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify

forward looking statements by terms such as "may," "intend," "might," "will," "should,"

forward looking statements by terms such as "may," "intend," "might," "will," "should," "could," "would," "expect," "believe," "anticipate," "estimate," "predict," "potential," or the negative of these terms. These terms and similar expressions are intended to identify forward-looking statements. The forward-looking statements in this report are based upon management's current expectations and belief, which management believes are reasonable. However, we cannot assess the impact of each factor on our business or the extent to which any factor or combination of factors, or factors we are aware of, may cause actual results to differ materially from those contained in any forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. These statements represent our estimates and assumptions only as of the date of this report. Except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Our business operations are primarily based in China, and the VIE and its subsidiaries are subject to certain legal and operational risks associated with being based in China. On December 28, 2021, the Cyberspace Administration of China ("CAC"), and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, which came into effect on February 15, 2022. The final Cybersecurity Review Measures provide that a "network platform operator" that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review. Further, the relevant PRC governmental authorities may initiate a cybersecurity review against any company if they determine certain network products, services, or data processing activities of such company affect or may affect national security. As of the lat

Description of Business

Item 1. Description of Business Overview Company Structure Datasea Inc. is a technology company incorporated in Nevada, USA, on September 26, 2014, with subsidiaries and operating entities located in Delaware, US, and China. The company provides acoustic business services (focusing on high-tech acoustic technologies and applications such as ultrasound, infrasound, and Schumann resonance), 5G application services (5G AI multimodal digital business), and other products and services to various corporate and individual customers. In the acoustic business sector, Datasea is a global pioneer of the "acoustic effect" concept. Utilizing global leading "Acoustics + AI" precision manufacturing as the digital application framework, and leveraging sound wave technologies combined with acoustic effects as the technological system, the company outputs acoustic high-tech products and solutions worldwide. Datasea strives to be a leader in the development of China's high-tech precision manufacturing in the acoustic industry. Our products have wide-ranging applications across various industries and sectors, including acoustic agriculture, acoustic industry, acoustic medicine, acoustic health, and acoustic IoT technologies. In the 5G application sector, Datasea provides digital and intelligent services to enterprises and individual users in China, leveraging AI, machine learning, and data analytic capabilities to offer a wide range of 5G application products and solutions. For the fiscal year ending June 30, 2024, our revenue was $23,975,867, reflecting a 558.6% increase compared to the same period in 2023. This revenue growth is primarily due to the rapid expansion of our 5G AI multimodal communication business in China, with the company's 5G AI digital business maintaining a leading position in the industry. Our growing customer base continues to support substantial business growth. Additionally, as of the date of September 20, the company has received approximately RMB 152

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View this 10-K filing on SEC EDGAR