DATASEA INC. Files Quarterly Report (10-Q) for Period Ended March 31, 2024

TL;DR

<b>DATASEA INC. (DTSS) filed its quarterly report for the period ending March 31, 2024, detailing its financial status and operations.</b>

AI Summary

DATASEA INC. (DTSS) filed a Quarterly Report (10-Q) with the SEC on May 13, 2024. DATASEA INC. filed a 10-Q report for the quarterly period ended March 31, 2024. The company is incorporated in Nevada and its fiscal year ends on June 30. Its principal executive offices are located in Beijing, People's Republic of China. DATASEA INC. is registered under the Securities Exchange Act of 1934. The company's common stock trades on the NASDAQ Capital Market under the symbol DTSS.

Why It Matters

For investors and stakeholders tracking DATASEA INC., this filing contains several important signals. This filing provides investors with an update on the company's financial performance and operational status during the most recent quarter. As a publicly traded company, DATASEA INC. is required to submit regular filings like this 10-Q to maintain transparency with shareholders and the market.

Risk Assessment

Risk Level: low — DATASEA INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant financial disclosures or events that would alter the risk profile based on the provided header information.

Analyst Insight

Review the full 10-Q filing for detailed financial statements, management's discussion and analysis, and risk factors to assess DATASEA INC.'s current performance and outlook.

Key Numbers

• 001-38767 — Commission file number (SEC registration number)
• 45-2019013 — IRS Number (Tax identification number)
• 0630 — Fiscal Year End (End of fiscal year)
• 2024-03-31 — Quarterly Period End Date (End date of the reported quarter)

Key Players & Entities

• DATASEA INC. (company) — Filer name and company name
• DTSS (company) — Trading symbol for common stock
• NASDAQ Capital Market (company) — Exchange where common stock is registered
• March 31, 2024 (date) — Quarterly period ended date
• 20240331 (date) — Conformed period of report
• 0001213900-24-042345 (other) — Accession number
• Nevada (other) — State of incorporation
• Beijing, People's Republic of China (location) — Address of principal executive offices

FAQ

Industry Context

DATASEA INC. operates in the software services industry, specifically prepackaged software (SIC 7372).

Regulatory Implications

The company is subject to the reporting requirements of the Securities Exchange Act of 1934, including filing quarterly reports (Form 10-Q).

What Investors Should Do

1. Analyze the detailed financial statements within the 10-Q for revenue, expenses, and profitability.
2. Review the Management's Discussion and Analysis (MD&A) section for insights into business performance and future outlook.
3. Examine the risk factors section for any new or updated risks that could impact the company.

Key Dates

• 2024-03-31: Quarterly period ended — The period covered by the 10-Q filing.
• 2024-05-13: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year ending June 30, 2024, providing an update from previous filings.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value DTSS NASDAQ Capital Market

Filing Documents

• ea0205544-10q_datasea.htm (10-Q) — 1202KB
• ea020554401ex31-1_datasea.htm (EX-31.1) — 10KB
• ea020554401ex31-2_datasea.htm (EX-31.2) — 10KB
• ea020554401ex32-1_datasea.htm (EX-32.1) — 4KB
• ea020554401ex32-2_datasea.htm (EX-32.2) — 4KB
• image_001.jpg (GRAPHIC) — 170KB
• image_002.jpg (GRAPHIC) — 33KB
• image_003.jpg (GRAPHIC) — 53KB
• image_004.jpg (GRAPHIC) — 57KB
• image_005.jpg (GRAPHIC) — 52KB
• 0001213900-24-042345.txt (&nbsp;) — 9117KB
• dtss-20240331.xsd (EX-101.SCH) — 99KB
• dtss-20240331_cal.xml (EX-101.CAL) — 56KB
• dtss-20240331_def.xml (EX-101.DEF) — 376KB
• dtss-20240331_lab.xml (EX-101.LAB) — 751KB
• dtss-20240331_pre.xml (EX-101.PRE) — 378KB
• ea0205544-10q_datasea_htm.xml (XML) — 1009KB

- Financial Information

Part I - Financial Information Item 1

Financial Statements

Financial Statements 1 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3 Quantitative and Qualitative Disclosures about Market Risk 58 Item 4

Controls and Procedures

Controls and Procedures 58

- Other Information

Part II - Other Information Item 1

Legal Proceedings

Legal Proceedings 60 Item 1A

Risk Factors

Risk Factors 60 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 60 Item 3 Defaults Upon Senior Securities 60 Item 4 Mine Safety Disclosures 60 Item 5 Other Information 60 Item 6 Exhibits 60 i

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS DATASEA INC. CONSOLIDATED BALANCE SHEETS MARCH 31, 2024 (UNAUDITED) JUNE 30, 2023 ASSETS CURRENT ASSETS Cash $ 52,529 $ 19,728 Accounts receivable 17,044 255,725 Inventory, net 184,137 241,380 Value-added tax prepayment 99,269 71,261 Prepaid expenses and other current assets 2,264,583 701,423 Total current assets 2,617,562 1,289,517 NONCURRENT ASSETS Long-term investment 56,378 55,358 Property and equipment, net 53,730 85,930 Intangible assets, net 568,307 1,185,787 Right-of-use assets, net 78,610 137,856 Total noncurrent assets 757,025 1,464,931 TOTAL ASSETS $ 3,374,587 $ 2,754,448 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 266,755 $ 1,005,059 Unearned revenue 54,061 609,175 Accrued expenses and other payables 579,370 1,409,939 Due to related parties 714,492 1,162,856 Operating lease liabilities 96,079 124,640 Bank loan payable 482,499 594,906 Total current liabilities 2,193,256 4,906,575 NONCURRENT LIABILITIES Operating lease liabilities - 26,449 Bank loan payable- non-current - 91,215 Loan payable- non-current - 1,310,306 Total noncurrent liabilities - 1,427,970 TOTAL LIABILITIES 2,193,256 6,334,545 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Common stock, $ 0.001 par value, 25,000,000 shares authorized, 3,017,944 and 1,889,315 shares issued and outstanding as of March 31, 2024 and June 30, 2023, respectively 3,018 1,889 Additional paid-in capital 35,058,598 24,148,868 Accumulated comprehensive income 250,668 393,252 Accumulated deficit ( 34,060,073 ) ( 28,063,258 ) TOTAL COMPANY STOCKHOLDERS' EQUITY (DEFICIT) 1,252,211 ( 3,519,249 ) Noncontrolling interest ( 70,880 ) ( 60,848 ) TOTAL EQUITY (DEFICIT) 1,181,331 ( 3,580,097 ) TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 3,374,587 $ 2,754,448 The accompanying notes are an integral part of

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS MARCH 31, 2024 (UNAUDITED) AND JUNE 30, 2023 NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Datasea Inc. (the "Company," "Datasea," or "we," "us," "our") was incorporated in the State of Nevada on September 26, 2014 under the name Rose Rock Inc. and changed its name to Datasea Inc. on May 27, 2015. On May 26, 2015, the Company's founder, Xingzhong Sun, sold 6,666,667 shares of common stock, par value $ 0.001 per share, of the Company (the "Common Stock") to Zhixin Liu ("Ms. Liu"), an owner of Shuhai Skill (HK) as defined below. On October 27, 2016, Mr. Sun sold his remaining 1,666,667 shares of Common Stock of the Company to Ms. Liu. As a holding company with no material operations, the Company conducts a majority of its business activities through organizations established in the People's Republic of China ("PRC), primarily by variable interest entity (the "VIE"). The Company does not have any equity ownership of its VIE, instead it controls and receives economic benefits of the VIE's business operations through certain contractual arrangements. On October 29, 2015, the Company entered into a share exchange agreement (the "Exchange Agreement") with the shareholders (the "Shareholders") of Shuhai Information Skill (HK) Limited ("Shuhai Skill (HK)"), a limited liability company ("LLC") incorporated on May 15, 2015 under the laws of the Hong Kong Special Administrative Region of the People's Republic of China (the "PRC"). Pursuant to the terms of the Exchange Agreement, the Shareholders, who own 100 % of Shuhai Skill (HK), transferred all of the issued and outstanding ordinary shares of Shuhai Skill (HK) to the Company for 6,666,667 shares of Common Stock, causing Shuhai Skill (HK) and its wholly owned subsidiaries, Tianjin Information Sea Information Technology Co., Ltd. ("Tianjin Information" or "WOFE"), an LLC incorporated under the laws of the PRC, and Harbin Information Sea Information Technology Co., Ltd., an LLC incorporated unde

financial statements ("CFS") were prepared assuming the Company will continue as a going concern, which contemplates

financial statements ("CFS") were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the three months ended March 31, 2024 and 2023, the Company had a net loss of approximately $ 4.14 million and $ 1.30 million, respectively. For the nine months ended March 31, 2024 and 2023, the Company had a net loss of approximately $ 6.00 million and $ 3.92 million, respectively. The Company had an accumulated deficit of approximately $ 34.06 million as of March 31, 2024, and negative cash flow from operating activities of approximately $ 5.95 million and $ 2.33 million for the nine months ended March 31, 2024 and 2023, respectively. The historical operating results including recurring losses from operations raise substantial doubt about the Company's ability to continue as a going concern. During the nine months ended March 31, 2024, the Company made total prepayments of $ 3.78 million for marketing and promoting the sale of acoustic intelligence series products and 5G Multimodal communication in oversea and domestic markets. For the three and nine months ended March 31, 2024, the Company recorded an amortization of prepaid expense of $ 0.95 million and $ 1.89 million in the selling expense. If deemed necessary, management could seek to raise additional funds by way of admitting strategic investors, or private or public offerings, or by seeking to obtain loans from banks or others, to support the Company's research and development ("R&D"), procurement, marketing and daily operation. While management of the Company believes in the viability of its strategy to generate sufficient revenues and its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern depends upon the Company's ability to further implement its busin

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View this 10-Q filing on SEC EDGAR