New York, Feb. 18, 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, announced its financial results for the three months ended December 31, 2019.
Advances from CustomersOn March 5, 2018, the Company entered into separate agreements with two sales agents. Pursuant to the agreements, the Company authorized the agents to market the Company’s Safe Campus Management System. The term of the agreements is for five years and will expire on March 6, 2023 and July 1, 2023, respectively. In accordance with ASU 2016-08, Principal versus Agent Considerations (ASC 606), the Company determined that it was the principal in these two contracts and as such, the Company recorded the payments received from the two sales agents as advances. The Company will recognize revenue from these contracts as the sales agents sell the products and services to third parties.As of December 31 and June 30, 2019, the Company recorded $1,300,638 and $1,318,897 of advances from the sales agents, respectively.RevenueThe Company did not generate any revenue during three and six months ended December 31, 2019 and 2018.Selling, General and Administrative ExpensesSelling expenses were $58,146 and $71,973 for the three months December 31, 2019 and 2018, respectively. Selling expenses were $109,321 and $148,852 for the six months December 31, 2019 and 2018, respectively. The decrease in selling expenses was primarily attributed to a decrease in salary expenses.General and administration expenses increased $362,575, or 131.6% from $275,582 during the three months ended December 31, 2018 to $638,157 during the same period in 2019. The increases were attributed to increases in rent expenses and approximately $285,000 of capitalized technology was expensed during three months ended December 31, 2019. General and administration expenses increased $443,263, or 88.2% from $502,153 during the six months ended December 31, 2018 to $945,416 during the same period in 2019. The increases were attributed to increases in rent expenses and approximately $285,000 of capitalized technology was expensed during three months ended December 31, 2019.The Company incurred research and development expenses of $69,158 and $120,365 during the three and six months ended December 31, 2019, respectively, comparing $41,114 and $103,885 during the same period in 2018. The increase was attributed to the increase in salary expense since the Company hired more staff in research and development department.Net LossDue to our lack of recurring revenue, the Company generated net losses of $751,032 and $1,148,018 for the three and six months ended December 31, 2019, respectively, $379,712 and $743,937 for the same period in 2018.Cash and Financial PositionAs of December 31, 2019, the Company had cash and cash equivalents of $ 2,804,740, compared to $ 6,072,637 as of June 30, 2019.The Company had a working capital of $ 1,105,913 as of December 31, 2019 compared to working capital of $4,568,461 as of June 30, 2019.Net cash used in operating activities was $1,572,243 during the six months ended December 31, 2019, which consisted of the Company’s net loss of $1,148,018, offset by depreciation and amortization of $13,186, a change of prepaid expenses and other current assets of $271,654, and a change of accrued expenses and other payables of $163,636.Net cash used in investing activities totaled $1,608,538 for the six months ended December 31, 2019, which primarily related to cash paid for the acquisition of office furniture and equipment of $208,538, and for intangible assets of $1,400,000.Net cash used in financing activities was $84,227 during the six months ended December 31, 2019, which primarily consisted of payment of a shareholder loan, net of $84,227.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: ir.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 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.IR contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: [email protected]DATASEA INC.
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