BEIJING - Datasea Inc. (NASDAQ: DTSS), a Nevada corporation operating in the field of high-tech intelligent acoustics and 5G-Artificial Intelligence (AI) multimodal communication technology, has announced a registered direct offering of its common stock, which is anticipated to close on Wednesday.
The company has entered into a share purchase agreement with an institutional investor for the sale of 692,308 shares at a price of $3.25 per share, amounting to a total offering size of approximately $2.25 million.
The offering, which is slated to be finalized subject to customary closing conditions, follows a shelf registration statement that was previously declared effective by the Securities and Exchange Commission (SEC) on July 21, 2023. EF Hutton LLC is serving as the exclusive placement agent for the offering.
Datasea intends to utilize the net proceeds from this offering to advance its research and development initiatives, expand its market presence, and for other general corporate purposes. This funding strategy aligns with the company's ongoing efforts to innovate and enhance its product offerings in intelligent acoustics and 5G multimodal communication.
Datasea, which is recognized for its innovative solutions in the tech industry, particularly in the domains of ultrasonic, infrasound, and directional sound technology, has also been focusing on leveraging 5G and AI technologies to deliver advanced products and services. The company's statement is based on a press release.
In other recent news, Datasea Inc. has announced several significant developments. The technology company secured three new sales agreements through its Chinese subsidiaries, valued at approximately $61.7 million. These include two agreements for the 5G-AI communications segment and one for high-tech acoustic products, which are projected to contribute significantly to the company's revenue growth for the fiscal year 2025.
Additionally, Datasea entered into a partnership with iPower Inc. to enhance product distribution in the US online market. This collaboration is expected to leverage Datasea's expertise in acoustic high-tech and 5G-AI multimodal communication technology, along with iPower's established online merchandising and logistical capabilities.
In another development, Datasea's CEO, Zhixin Liu, plans to acquire up to $3 million of the company's common stock over the next 12 months using personal funds, following regulatory compliance and market conditions.
Furthermore, Datasea signed an $8.45 million sales agreement with Shenzhen Xiaoranfang Marketing Co., Ltd. for the sale of its acoustic high-tech products. This deal is anticipated to contribute significantly to the company's future revenue growth.
InvestingPro Insights
As Datasea Inc. (NASDAQ: DTSS) moves forward with its registered direct offering, several financial metrics and insights from InvestingPro provide a clearer picture of the company's current market standing. With a market capitalization of approximately $15.11 million, Datasea is positioned in the market as a smaller cap company. Despite significant revenue growth in the last twelve months as of Q3 2024, with an increase of over 2500%, the company's financial health shows signs of strain with a negative P/E ratio of -1.04, indicating that it is not currently profitable.
An InvestingPro Tip highlights that Datasea has been quickly burning through cash, which may raise concerns about its financial sustainability. Additionally, the company's stock is known to trade with high price volatility, which could be a point of consideration for potential investors looking at the recent offering. Notably, the company has seen a significant return over the last week, with a price total return of 12.53%, reflecting short-term investor optimism.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can provide further context on Datasea's valuation, such as trading at a low revenue valuation multiple and a high Price / Book multiple of 12.06. These insights may help investors understand the risks and opportunities associated with investing in Datasea. For more detailed tips and metrics, interested parties can explore the complete list of 13 InvestingPro Tips available at InvestingPro's dedicated page for Datasea.
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