NEW YORK, May 14, 2020 (GLOBE NEWSWIRE) — 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 third quarter and nine months ended March 31, 2020.
Third Quarter 2020 Financial and Recent Highlights:
- 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.
- Commenced a six-location pilot program with K-12 schools and public communities in Nanjing and Taiyuan, to provide infrared thermometers and related hardware & software solutions aimed at detecting outbreaks, and completed the installation of the Epidemic Prevention and Control Systems in two K-12 schools, as the first part of the Company’s six-location pilot program.
- Signed 17 new agreements since April 1, 2020 with various K-12 schools to deploy intelligent campus security systems.
- Signed 12 new agreements since April 1, 2020 to deploy intelligent public community security systems.
“In the fiscal third quarter 2020 we continued to make significant progress on our mission of enhancing the safety of the communities where we inhabit and work,” said Ms. Zhixin Liu, Chairwoman and CEO of Datasea. “Our organization’s unwavering commitment to our mission was evidenced in the third quarter of 2020 in our ability to focus our efforts on development and launch our Epidemic Prevention and Control System (the “System”). This System enhances the efficiency of community managers and provides a safer and more transparent work environment. The 45 purchase orders for this System that we have received to date represent a solid effort in our commercialization efforts for this product, giving us confidence going forward. In the educational market, we managed to secure 17 new agreements with K-12 schools since April, which we believe reflects the growing need for our solutions. We intend to direct our proprietary technology, sales channels, and operational momentum to help us to capitalize on future opportunities.”
Fiscal Third Quarter 2020 Financial Results
The Company did not generate any revenue in the fiscal third quarter of 2020 or during the same period one year ago.
Selling expense was $33,000 as compared to $34,000 in the same period one year ago. The decrease was primarily driven by lower salary expenses, and partly offset by higher travel expenses in the period.
General and administrative expenses decreased to $428,000 from $511,000 in the same year-ago period. The decrease was primarily due to the Company’s ongoing cost and expense management initiatives.
Research and development expenses increased to $109,000 from $29,000 in the same period one year ago. The increase was primarily due to investment in additional research and development personnel in the period.
Net loss totaled $(557,000), or $(0.03) per diluted share, as compared to net loss of $(343,000), or $(0.03) per diluted share, in the same period one year ago.
Fiscal Nine Months 2020 Financial Results
The Company did not generate any revenue in the first nine months of 2020 or the comparable period last year.
Selling expense decreased to $143,000 from $183,000 in the same year-ago period. The decrease was primarily driven by lower salary expenses, and partly offset by higher travel expenses in the period.
General and administrative expense increased to $1.4 million from $1.0 million in the same year-ago period. The increase was primarily due to higher rent expenses and professional fees.
Research and development expenses increased to $230,000 from $133,000 in the same year-ago period. The increase was primarily due to investment in additional research and development personnel in the period.
Net loss totaled $(1.7) million, or $(0.08) per diluted share, compared to net loss of $(1.3) million or $(0.06) per diluted share, 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. Datasea has been certified as one of the Zhongguancun High Tech Enterprises in recognition of its achievement in high technology products. Datasea’s security and technology engineers and experts create, design, build and run various security systems and education technologies tailored to its clients’ needs. Through its professional team and strong expertise in the industry, Datasea offers its clients a broad portfolio of security solutions, along with strategic advice and ongoing management of their security infrastructure, and digital education tools or programs. For additional company information, please visit: www.shuhaixinxi.com.
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” 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) 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.
CONSOLIDATED BALANCE SHEETS
|Value-added tax prepayment||70,534||–|
|Prepaid expenses and other current assets||491,913||105,932|
|Total current assets||3,446,007||6,851,863|
|Fixed assets, net||252,315||41,116|
|Intangible assets, net||1,948,882||555,811|
|Right-of-use assets, net||758,162||–|
|Total noncurrent assets||2,959,359||596,927|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Advances from customers||1,361,134||1,318,897|
|Accrued expenses and other payables||178,779||264,684|
|Loan payable to shareholder||–||86,733|
|Operating lease liabilities||348,401||–|
|Total current liabilities||1,935,082||1,683,402|
|Operating lease liabilities||421,558||–|
|Total noncurrent assets||421,558||–|
|Common stock, $0.001 par value, 375,000,000 shares authorized, 20,943,846 shares issued and outstanding at March 31, 2020 and June 30, 2019||20,944||20,944|
|Additional paid-in capital||11,104,666||11,104,666|
|Accumulated comprehensive income||179,000||189,906|
|TOTAL STOCKHOLDERS’ EQUITY||4,048,726||5,765,388|
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY||$||6,405,366||$||7,448,790|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|Cost of goods sold||–||–||–||–|
|General and administrative||1,373,837||1,013,136||428,227||510,983|
|Research and development||229,511||133,103||109,146||29,218|
|Total operating expenses||1,745,953||1,329,479||570,657||574,589|
|Loss from operations||(1,745,953||)||(1,329,479||)||(570,657||)||(574,589||)|
|Other (expense) income, net||(3,632||)||(2,571||)||2,784||894|
|Total non-operating income, net||40,196||44,543||12,918||33,590|
|Loss before income tax||(1,705,757||)||(1,284,936||)||(557,739||)||(540,999||)|
|Other comprehensive item|
|Foreign currency translation gain (loss)||(10,906||)||222,332||719||198,209|
|Total comprehensive loss||$||(1,716,663||)||$||(1,062,604||)||$||(557,020||)||$||(342,790||)|
|Net loss per share|
|Basic and diluted||$||(0.08||)||$||(0.06||)||$||(0.03||)||$||(0.03||)|
|Weighted average shares outstanding|
|Basic and diluted||20,943,846||19,845,627||20,943,846||20,943,846|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|Nine Months Ended|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||38,536||28,285|
|Operating lease expense||113,211||–|
|Changes in assets and liabilities:|
|Prepaid expenses and other current assets||(394,017||)||12,099|
|Advance from customers||83,889||–|
|Accrued expenses and other payables||(13,338||)||(44,790||)|
|Payment on operating lease liabilities||(132,953||)||–|
|Net cash used in operating activities||(2,285,214||)||(1,289,063||)|
|Cash flows from investing activities:|
|Acquisition of fixed assets||(248,333||)||(64,531||)|
|Acquisition of intangible assets||(1,400,000||)||–|
|Net cash used in investing activities||(1,648,333||)||(64,531||)|
|Cash flows from financing activities:|
|Payment of loan payable – shareholder, net||(85,091||)||(15,392||)|
|Net proceeds from sale of common stock – offering||–||5,240,889|
|Net proceeds from issuance of common stock||–||308,858|
|Net cash provided by (used in) financing activities||(85,091||)||5,534,355|
|Effect of exchange rate changes on cash||(43,189||)||129,722|
|Net (decrease) increase in cash and restricted cash||(4,061,826||)||4,310,483|
|Cash and restricted cash, beginning of period||6,672,637||1,031,486|
|Cash and restricted cash, end of period||$||2,610,811||$||5,341,969|
|Supplemental disclosures of cash flow information:|
|Cash paid for interest||$||–||$||–|
|Cash paid for income tax||$||–||$||–|
|Supplemental disclosures of non-cash investing and financing activities:|
|Right-of-use assets obtained in exchange for new operating lease liabilities||$||875,366||$||–|
CONTACT: Investor Relations Contact: Gateway Investor Relations Matt Glover DTSS@gatewayir.com 949-574-3860
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