Press Release: Datasea Inc. Issues Statement Regarding Recent Market Activity

Gross Margin Rose to 8.5% through High-Tech Products Mix and Cost Efficiencies

BEIJING, Nov. 13, 2025 /PRNewswire/ — Datasea Inc. ("Datasea" or the "Company"), a Nevada-based high-tech enterprise engaged in acoustic technologies and AI multimodal digitalization, today announces its unaudited financial results for its first fiscal quarter ended September 30, 2025.

Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.

First Quarter Fiscal 2026 Highlights

• Revenue: $13.81 million as compared to $21.08 million for the first quarter of 2025, a decrease of 34.5%, due to the Company's strategic optimization of its high technology business and a reduction of its low margin operations.
• Gross Profit: $1.17 million as compared to $0.02 million, an increase of 5.9x as compared to the first quarter of 2025, reflecting cost rationalization and operational efficiencies, and a strategic focus on bottom line profitability, driven by high-tech product expansion.
• Gross Margin: 8.46% as compared to 0.93% for the first quarter of 2025, an improvement of 753 basis points, attributable to a higher contribution from high-margin 5G+AI multimodal digital solutions and acoustic technology products.

Management Commentary

Ms. Zhixin Liu, Chief Executive Officer of Datasea, commented, "The first quarter of fiscal 2026 marks a strategic transition for Datasea as we pivot from scale expansion to profitability optimization. Our revenue decreased due to our plan to deliberately restructure our revenue mix toward technology-driven, high value-added businesses, and implement a reduction in standardized low margin 5G AI multimodal top up services. As a result, our gross margin rose sharply to 8.46%, reflecting the success of this structural transformation and the growing contribution from our high-margin AI multimodal and acoustic technology solutions. For example, during the quarter, Shuhai Beijing provided customized 5G+AI multimodal digital services for Yuxiang Zhiyang (Tianjin) Innovation Technology Co., Ltd. and several other clients, focusing on Douyin live-streaming and smart home marketing scenarios, generating total revenue of approximately RMB 6.53 million (around USD0.92 million). Such high-margin, technology-driven solutions have proven the effectiveness of our strategic shift and further enhanced overall profitability."

"The phased decline in revenue is a purposeful and tactical choice that during our optimization process, signals a shift from pursuing scale to emphasizing value creation and sustainable profitability. Looking ahead, the Company will continue to strengthen cost controls and operational efficiency while focusing on technology-driven, high-quality growth. Datasea will advance its 'dual-engine strategy', leveraging both 5G+AI multimodal digitalization and acoustic high-tech innovations to enhance profitability and advance our market leadership."

Operational Highlights

1. 5G+AI Multimodal Digital Business

• The core revenue driver, contributing $13.32 million during the quarter.
• Benefited from China's rapidly expanding 5G+AI multimodal industry, where Datasea continues to hold a leading position.
• Customer base continued to grow, supporting stable business performance and recurring revenue.
• New vertical solutions achieved revenue realization of RMB 6.53 million ($0.92 million), including:
• AI multimodal services for SMEs
• AI multimodal digital rural services
• AI multimodal new media marketing services
• These high-margin solutions have significantly elevated the Company's overall profitability and confirmed the scalability of its multimodal digitalization business model.

2. Acoustic High-Tech Segment

• Continued R&D progress in 'Acoustics + AI + Neuro-Regulation', focusing on applications in non-invasive health management and acoustic intelligent wearables.
• Expanded retail and cooperative presence in Medical, healthcare, and industrial scenarios, with the product line shifting from single hardware devices to integrated acoustic solution systems.

Business Outlook

Looking ahead, Datasea will continue to:

• The 5G+AI multimodal digital segment: The Company will further upgrade its proprietary AI multimodal platform, expand high-margin customized solutions and SaaS-based subscription services, and drive deeper penetration across SME digitalization, new media marketing, and digital rural development to generate more stable and recurring cash flows.
• The acoustic high-tech segment: The Company will accelerate R&D in 'Acoustics + AI + Neuro-Regulation', promoting the integration of low-intensity focused ultrasound and brain-computer interface technologies to establish a 'Detection--Analysis--Intervention" closed-loop system. The Company will prioritize applications in healthcare, beauty, and intelligent wearable devices, creating new growth opportunities in non-pharmacological health management.

With continuous innovation and the synergistic development of its two core businesses, Datasea aims to achieve sustainable profitability, enhance its gross margin profile, and solidify its position as a competitive global player in high-tech innovation.

About Datasea Inc.

Datasea Inc. ("Datasea") is a leading provider of products, services, and solutions for enterprise and retail customers in two innovative industries, acoustic high tech and 5G-AI multimodal digitalization. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal digital segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies, precision manufacturing, and ultrasonic, infrasound and directional sound technology in its acoustics business to combat viruses and prevent human infections, and it is also developing applications in medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to enter the U.S. markets and to mark its global expansion plan. For additional information, please visit www.dataseainc.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," "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 SEC, 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.

Investor and Media Contact:

Datasea Investor Relations

Email: investorrelations@shuhaixinxi.com

sunhezhi@shuhaixinxi.com

Precept Investor Relations LLC

David Rudnick

+1 646-694-8538

david.rudnick@preceptir.com

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SOURCE Datasea Inc.

DTSS Achieves Fourth Quarter Net Income Breakeven Driven by

Cutting-Edge Acoustics and AI Multimodal Digitalization;

Ongoing Commercialization Updates in the Coming Weeks

BEIJING, Sept. 26, 2025 /PRNewswire/ — Datasea Inc. ("Datasea" or the "Company"), a Nevada-based high-tech enterprise engaged in acoustic high-tech products and services and AI multimodal digitalization, today announced its financial results for the fiscal year ended June 30, 2025.

The Company reported record revenue of $71.62 million, an increase of 198.7% from $23.97 million in fiscal year 2024. Gross profit reached $2.44 million, up 415.5% from $0.47 million year-over-year. In the fourth quarter of fiscal year 2025, the Company achieved net income breakeven as adjusted for non-cash depreciation and amortization.

Management Commentary

Ms. Zhixin Liu, Chief Executive Officer of Datasea, stated, "Our operating and financial results for fiscal year 2025 represents a milestone in Datasea's corporate growth. We nearly tripled our revenue due to the success of our dual-engine business segments of AI multimodal digitalization and acoustic high-tech. Further, in the fourth quarter, we achieved adjusted net income breakeven for the first time, signaling a transition from building scale to achieving profitability and sustainable growth."

"On the business side, AI Multimodal Digitalization continues to expand through long-term customer contracts, while Acoustic + AI Solutions achieved significant progress, especially in delivering comprehensive solutions. These results reflect recognition from the marketplace as well as the resilience and viability of our innovation-driven business model. We believe that we have established a solid foundation for achieving long-term goals and maximizing shareholder value."

Fiscal Year 2025 Financial Highlights

• Revenue: $71.62 million, an increase of 198.7% compared to $23.97 million for fiscal year 2024, through innovative technology and cost advantages in AI multimodal digitalization, a stable client base, and scaled growth that minimizes costs and increases margins.
• Gross Profit: $2.44 million, an increase of 415.5% compared to $0.47 million in fiscal year 2024, with gross margin improvement primarily attributable to the delivery of highly effective margin solutions in our core businesses.
• Net Income: Breakeven in the fourth quarter of fiscal 2025, as adjusted for non-cash amortization and depreciation. Net loss for the year was $5.09 million compared to $15.7 in fiscal year 2024, a year-over-year decrease of 67.6%.
• Intangible Assets: $3.50 million, an increase of 540.3% from $0.55 million in the prior year, mainly due to significant growth in the value of core intellectual property, such as patents, which reflect the success of the Company's "asset-light, high-value" strategic transformation.

Business Highlights

AI Multimodal Digitalization Segment

• As one of the Company's core businesses, AI multimodal services delivered strong growth in fiscal year 2025 with revenue increasing by 199.49% year-over-year to $70.68 million, contributing significantly to overall performance.
• Powered by its proprietary AI platform, the Company provided standardized platform offerings and customized solutions for clients across numerous industries.
• Newly developed high-margin customized solutions including SME services, digital rural platforms, and new media marketing systems, were commercialized at scale, contributing revenue of approximately RMB 8.9 million (US$ 1.24 million) and emerged as a new driver of growth.
• The number of core clients increased from eight to 15 large enterprises with several clients contributing over $10 million in annual revenue.

Acoustic High-Tech Segment

• Positioned 'Acoustics + AI + Application Scenarios' with AI embedded acoustic technologies serving as a technical base for an array of products and services spanning multiple industry sectors.
• Continuous technological breakthroughs and scenario implementations advanced the Company's R&D in 'Acoustics + Neuro-Regulation,' with progress achieved in brain-computer interfaces, cardiac signal intervention, and foot acupoint stimulation.
• The Company recorded revenue of RMB 3.7 million (US$ 0.5 million) from comprehensive acoustic solutions, marking a strategic shift from single hardware sales to high-margin solution products and services.
• Beyond traditional enterprises and retail clients, the Company expanded its base and deployed its acoustic products into 463 beauty and health stores, evolving beyond its B2C focus and building a robust B2B sales network.

Business Outlook

Looking ahead to fiscal year 2026 and beyond, Datasea will continue to advance its dual growth engines of AI Multimodal Digitalization + Acoustic High-Tech to drive diversified high-tech growth:

   1. The Deepening of the AI Multimodal PlatformAs a pioneer in China's AI 
      multimodal digital field, Datasea will continue to upgrade its 
      proprietary AI multimodal platform, focusing on delivering more 
      high-margin solutions in SME digitalization and new media marketing, and 
      expanding recurring revenue from 'SaaS Subscriptions + Customized 
      Solutions'. 
 
   2. Acoustic Empowerment in HealthcareIn acoustics, the Company will 
      accelerate R&D in 'acoustics + neuro-regulation', advancing applications 
      in brain-computer interfaces, neural signal intervention, and foot 
      stimulation. Combined with its retail presence in over 500 beauty and 
      health stores across China, Datasea aims to build a closed-loop system of 
      'Detection -- Analysis -- Diagnosis -- Intervention' for 
      non-pharmacological health management. The Company has also entered the 
      health intelligent wearables market, further extending the depth and 
      diversity of acoustic applications in healthcare. 
 
   3. M&A StrategyIn China, Datasea will seek to promote acoustic product 
      penetration into the healthcare, medical beauty, agriculture, and 
      industrial fields, and accelerate its capabilities and market channels 
      through acquisitions. In the United States, through its wholly owned 
      subsidiary, Datasea Acoustics LLC, the Company is planned in promoting 
      the distribution of acoustic products and patent deployment, and is 
      working with US partners to expand local channels. Internationally, the 
      Company will advance patent collaboration and technology acquisitions 
      with partners in North America, creating dual barriers of global patent 
      protection and market penetration. 

About Datasea Inc.

Datasea Inc. ("Datasea") is a leading provider of products, services, and solutions for enterprise and retail customers in two innovative industries, acoustic high tech and 5G-AI multimodal digitalization. The Company's advanced R&D technology serves as the core infrastructure and backbone for its products. Its 5G multimodal digital segment operates on a cloud platform based on AI. Datasea leverages cutting-edge technologies, precision manufacturing, and ultrasonic, infrasound and directional sound technology in its acoustics business to combat viruses and prevent human infections, and it is also developing applications in medical ultrasonic cosmetology. In July 2023, Datasea established a wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware, in a strategic move to enter the U.S. markets and to mark its global expansion plan. For additional information, please visit www.dataseainc.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," "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 SEC, 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.

 
                    FINANCIAL TABLES TO FOLLOW 
 
                           DATASEA INC. 
                   CONSOLIDATED BALANCE SHEETS 
 
                                        June 30,       June 30, 
                                           2025           2024 
                                      -------------  ------------- 
 
ASSETS 
CURRENT ASSETS 
Cash                                  $     620,807  $     181,262 
Accounts receivable                       1,374,180        718,546 
Inventory, net                              206,610        153,583 
Value-added tax prepayment                  137,025        107,545 
Prepaid expenses and other current 
 assets                                     583,650      1,486,956 
                                       ------------   ------------ 
   Total current assets                   2,922,272      2,647,892 
 
NONCURRENT ASSETS 
Property and equipment, net                  25,560         48,466 
Intangible assets, net                    3,495,984        546,001 
Right-of-use assets, net                    292,065         49,345 
                                       ------------   ------------ 
   Total noncurrent assets                3,813,609        643,812 
                                       ------------   ------------ 
 
TOTAL ASSETS                          $   6,735,881  $   3,291,704 
                                       ============   ============ 
 
LIABILITIES AND STOCKHOLDERS' 
EQUITY 
CURRENT LIABILITIES 
Accounts payable                      $     420,038  $   1,075,641 
Unearned revenue                            150,088         49,239 
Accrued expenses and other payables         547,706        596,714 
Due to related parties                        6,126        654,560 
Operating lease liabilities                 128,525         53,530 
Bank loan payable                         2,374,767      1,170,298 
                                       ------------   ------------ 
   Total current liabilities              3,627,250      3,599,982 
 
NONCURRENT LIABILITIES 
Operating lease liabilities                 166,436              - 
                                       ------------   ------------ 
   Total noncurrent liabilities             166,436              - 
                                       ------------   ------------ 
 
TOTAL LIABILITIES                         3,793,686      3,599,982 
 
COMMITMENTS AND CONTINGENCIES 
 
STOCKHOLDERS' EQUITY (DEFICIT) 
Common stock, $0.001 par value, 
 25,000,000 shares authorized, 
    8,128,127 and 3,589,620 shares 
 issued and outstanding as of June 
 30,    2025 and 2024, respectively           8,128          3,589 
Additional paid-in capital               47,331,510     38,957,780 
Accumulated comprehensive income            138,586        242,208 
Accumulated deficit                    (44,526,016)   (39,440,322) 
                                       ------------   ------------ 
   TOTAL COMPANY STOCKHOLDERS' 
    EQUITY (DEFICIT)                      2,952,208      (236,745) 
 
   Noncontrolling interest                 (10,013)       (71,533) 
                                       ------------   ------------ 
 
   TOTAL STOCKHOLDERS' EQUITY 
    (DEFICIT)                             2,942,195      (308,278) 
                                       ------------   ------------ 
 
TOTAL LIABILITIES AND STOCKHOLDERS' 
 EQUITY (DEFICIT)                     $   6,735,881  $   3,291,704 
                                       ============   ============ 
 
The accompanying notes in the Company's 10-K as filed with the SEC 
 are an integral part of these consolidated financial statements. 
 
 
                           DATASEA INC. 
   CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 
 
                                               YEARS ENDED 
                                                 JUNE 30, 
                                       --------------------------- 
                                           2025          2024 
                                       ------------  ------------- 
 
Revenues                               $ 71,616,820  $  23,975,867 
Cost of revenues                         69,172,872     23,501,762 
                                        -----------   ------------ 
 
Gross profit                              2,443,948        474,105 
                                        -----------   ------------ 
 
Operating expenses 
Selling                                   1,980,224      3,279,627 
General and administrative                4,703,443      8,960,523 
Research and development                    914,996        359,342 
                                        -----------   ------------ 
 
Total operating expenses                  7,598,663     12,599,492 
                                        -----------   ------------ 
 
Loss from operations                    (5,154,715)   (12,125,387) 
 
Non-operating income (expenses) 
Other income (expenses), net                 70,169       (97,893) 
Interest income                               5,016          1,975 
                                        -----------   ------------ 
 
Total non-operating income 
 (expenses), net                             75,185       (95,918) 
                                        -----------   ------------ 
 
Loss before income tax                  (5,079,530)   (12,221,305) 
 
Income tax                                    6,596              - 
                                        -----------   ------------ 
 
Loss before noncontrolling interest 
 from continuing operations             (5,086,126)   (12,221,305) 
Income before noncontrolling interest 
 from discontinued operations                     -        833,546 
                                        -----------   ------------ 
 
Less: loss attributable to 
 noncontrolling interest from 
 continuing operations                        (432)       (10,695) 
Less: loss attributable to 
noncontrolling interest from 
discontinued operations                           -              - 
                                        -----------   ------------ 
 
Net loss attribute to noncontrolling 
 interest                                     (432)       (10,695) 
                                        -----------   ------------ 
 
Net loss to the Company from 
 continuing operations                  (5,085,694)   (12,210,610) 
Net income to the Company from 
 discontinued operations                          -        833,546 
 
Net loss to the Company                 (5,085,694)   (11,377,064) 
 
Other comprehensive item 
Foreign currency translation gain 
 (loss) attributable to the Company       (103,622)      (151,044) 
Foreign currency translation gain 
 attributable to noncontrolling 
 interest                                    60,588             10 
                                        -----------   ------------ 
 
Comprehensive loss attributable to 
 the Company                           $(5,189,316)  $(11,528,108) 
                                        ===========   ============ 
 
Comprehensive income attributable to 
 noncontrolling interest               $     60,156  $    (10,685) 
                                        ===========   ============ 
 
Basic and diluted net loss per share   $     (0.77)  $      (4.38) 
                                        ===========   ============ 
 
Weighted average shares used for 
 computing basic and diluted loss per 
 share *                                  6,610,842      2,597,077 
                                        ===========   ============ 
 
*   retroactively reflect 1-for-15 reverse stock split effective 
 on January 19, 2024 
 
 The accompanying notes the Company's 10-K as filed with the SEC 
 are an integral part of these consolidated financial statements. 
 
 
                           DATASEA INC. 
              CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
                                               YEARS ENDED 
                                                 JUNE 30, 
                                       --------------------------- 
                                           2025          2024 
                                       ------------  ------------- 
 
Cash flows from operating 
activities: 
Loss including noncontrolling 
 interest                              $(5,086,126)  $(11,387,759) 
Adjustments to reconcile loss 
including noncontrolling interest to 
net    cash used in operating 
activities: 
Gain on disposal of subsidiary                    -      (833,546) 
Bad debt expense                             18,855              - 
Inventory impairment                         99,478              - 
Depreciation and amortization             1,139,264        494,480 
Loss on disposal of fixed assets             17,196          2,979 
Operating lease expense                     136,506        167,969 
Investment loss                                   -         56,081 
Loan forgiveness by shareholder             105,356              - 
Stock compensation expense                1,892,842      6,749,326 
Changes in assets and liabilities: 
   Accounts receivable                    (658,711)      (717,220) 
   Inventory                              (153,179)         91,076 
   Value-added tax prepayment              (29,953)       (51,078) 
   Prepaid expenses and other current 
    assets                                  877,711      (810,421) 
   Accounts payable                       (651,887)        597,744 
   Unearned revenue                         101,051      (472,584) 
   Accrued expenses and other 
    payables                               (45,306)      (108,736) 
   Payment on operating lease 
    liabilities                           (137,777)      (177,194) 
                                        -----------   ------------ 
 
Net cash used in operating activities   (2,374,680)    (6,398,883) 
 
Cash flows from investing 
activities: 
   Acquisition of property and 
    equipment                               (8,129)        (6,868) 
   Acquisition of intangible assets     (4,077,068)      (161,054) 
   Cash disposed due to disposal of 
    subsidiary                                    -           (35) 
                                        -----------   ------------ 
 
Net cash used in investing activities   (4,085,197)      (167,957) 
 
Cash flows from financing 
activities: 
   Proceeds from (repayment to) 
    related parties                       (203,218)        360,804 
   Proceeds from loan payables            2,374,350              - 
   Repayment of loan payables           (1,164,895)    (1,582,513) 
   Net proceeds from issuance of 
    common stock                          5,939,133      8,061,286 
                                        -----------   ------------ 
 
Net cash provided by financing 
 activities                               6,945,370      6,839,577 
 
Effect of exchange rate changes on 
 cash                                      (45,948)      (111,203) 
                                        -----------   ------------ 
 
Net increase in cash                        439,545        161,534 
 
 The accompanying notes the Company's 10-K as filed with the SEC 
 are an integral part of these consolidated financial statements. 
 

Investor and Media Contact:

Datasea Investor Relations

Email: investorrelations@shuhaixinxi.com

sunhezhi@shuhaixinxi.com

Precept Investor Relations LLC

David Rudnick

+1 646-694-8538

david.rudnick@preceptir.com

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SOURCE Datasea Inc.