UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30~~December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38767

DATASEA INC.

(Exact name of registrant as specified in its charter)

Nevada		45-2019013
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

20th Floor, Tower B, Guorui Plaza

1 Ronghua South Road,

Technological Development Zone

Beijing, People’s Republic of China

100176

(Address of principal executive offices)

(Zip Code)

+86 10-56145240

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.001 par value		DTSS		NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large -accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large -accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐	Large accelerated filer	☐	Accelerated filer
☒	Non-accelerated filer	☒	Smaller reporting company
		☐	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 11~~February 12, ~~2024~~2025, 7,~~087~~489,~~002~~402 shares of common stock, $0.~~001 par~~ 001par value per share, were outstanding.

DATASEA INC.

TABLE OF CONTENTS

		~~Page No.~~	Page No.
	~~Part I - Financial Information~~	1Part I - Financial Information	1
Item 1	~~Financial Statements~~	1Financial Statements	1
Item 2	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	26Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	~~Quantitative and Qualitative Disclosures about Market Risk~~	48Quantitative and Qualitative Disclosures about Market Risk	59
Item 4	~~Controls and Procedures~~	48Controls and Procedures	59
	~~Part II - Other Information~~	51Part II - Other Information	62
Item 1	~~Legal Proceedings~~	51Legal Proceedings	62
Item 1A	~~Risk Factors~~	51Risk Factors	62
Item 2	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	51Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3	~~Defaults Upon Senior Securities~~	52Defaults Upon Senior Securities	63
Item 4	~~Mine Safety Disclosures~~	52Mine Safety Disclosures	63
Item 5	~~Other Information~~	52Other Information	63
Item 6	~~Exhibits~~	52Exhibits	64
SIGNATURES		53

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DATASEA INC.

CONSOLIDATED BALANCE SHEETS

	SEPTEMBER 30, 2024			JUNE 30, 2024
	DECEMBER 31, 2024			JUNE 30, 2024
	(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash	$	~~937~~268,~~606~~101		$	181,262
Accounts receivable		18210,~~445~~980			718,546
Inventory, net		~~208~~319,~~062~~932			153,583
Value-added tax prepayment		~~128~~111,~~430~~300			107,545
Subscription receivables - related parties		3,980,382			-
Prepaid expenses and other current assets		684,783			1,486,956
Prepaid expenses and other current assets		1,908,999			1,486,956
Total current assets		1,595,096			2,647,892
Total current assets		7,181,924			2,647,892
NONCURRENT ASSETS
Property and equipment, net		4341,~~680~~399			48,466
Intangible assets, net		~~518~~4,~~306~~081,544			546,001
Right-of-use assets, net		~~212~~185,~~740~~494			49,345
Total noncurrent assets		~~774~~4,~~726~~308,437			643,812
TOTAL ASSETS	$	75,~~956~~903,~~650~~533		$	3,291,704
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	~~284~~314,~~140~~367		$	1,075,641
Unearned revenue		1135,~~312,317~~514			49,239
Accrued expenses and other payables		~~691~~499,~~792~~637			596,714
Due to related parties		~~231~~411,~~551~~619			654,560
Operating lease liabilities		9079,~~794~~308			53,530
Bank loan payable		1,~~148~~119,~~786~~860			1,170,298
Total current liabilities		32,~~759~~560,~~380~~305			3,599,982
NONCURRENT LIABILITIES
Operating lease liabilities		~~132~~116,~~541~~820			-
Total noncurrent liabilities		~~132~~116,~~541~~820			-
TOTAL LIABILITIES		32,~~891~~677,~~921~~125			3,599,982
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value, 25,000,000 shares authorized, 7,087,002 and 3,589,620 shares issued and outstanding as of September 30, 2024 and June 30, 2024 , respectively		7,087			3,589
Common stock, $0.001 par value, 25,000,000 shares authorized, 7,164,402 and 3,589,620 shares issued and outstanding as of December 31, 2024 and June 30, 2024 , respectively		7,164			3,589
Additional paid-in capital		45,~~268~~633,~~415~~189			38,957,780
Accumulated comprehensive income		~~229~~134,~~054~~302			242,208
Accumulated deficit		(4142,~~402~~538,~~311~~589	)		(39,440,322	)
TOTAL COMPANY STOCKHOLDERS’ EQUITY (DEFICIT)		43,~~102~~236,~~245~~066			(236,745	)
Noncontrolling interest		(379,~~516~~658	)		(71,533	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		43,~~064~~226,~~729~~408			(308,278	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	75,~~956~~903,~~650~~533		$	3,291,704

The accompanying notes are an integral part of these consolidated financial statements.

DATASEA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	THREE MONTHS ENDED SEPTEMBER 30,
	THREE MONTHS ENDED DECEMBER 31,						SIX MONTHS ENDED DECEMBER 31,
	2024			2023			2024			2023
Revenues	$	2120,~~081~~456,~~094~~404		$	611,~~880~~348,~~743~~469		$	41,537,498		$	18,229,212
Cost of revenues		20,~~884~~038,~~113~~952			611,~~806~~246,~~008~~234			40,923,065			18,052,242
Gross profit		~~196~~417,~~981~~452			74102,~~735~~235			614,433			176,970
Operating expenses
Selling		~~996~~407,~~049~~669			841,~~447~~149,944			1,403,718			1,234,391
General and administrative		1,~~128~~173,~~403~~733			~~693~~623,~~060~~456			2,302,136			1,316,516
Research and development		~~103~~74,~~079~~402			~~155~~117,~~004~~371			177,481			272,375
Total operating expenses		21,~~227~~655,~~531~~804			~~932~~1,~~511~~890,771			3,883,335			2,823,282
Loss from operations		(21,~~030~~238,~~550~~352	)		(~~857~~1,~~776~~788,536	)		(3,268,902	)		(2,646,312	)
Non-operating income (expenses)
Other income (expenses), net		55109,~~826~~761			(746,~~864~~187	)		165,587			(54,051	)
Interest income		~~4,055~~875			~~106~~1,623			4,930			1,729
Total non-operating income (expenses), net		59110,~~881~~636			(744,~~758~~564	)		170,517			(52,322	)
Loss before income tax		(1,~~970~~127,~~669~~716	)		(~~865~~1,~~534~~833,100	)		(3,098,385	)		(2,698,634	)
Income tax		-			-			-			-
Loss before noncontrolling interest from continuing operations		(1,~~970~~127,~~669~~716	)		(~~865~~1,~~534~~833,100	)		(3,098,385	)		(2,698,634	)
Income before noncontrolling interest from discontinued operations		-			~~833,546~~-			-			833,546
Less: loss attributable to noncontrolling interest from continuing operations		(8,~~680~~562	)		(~~9,932~~61	)		(118	)		(9,993	)
Less: loss attributable to noncontrolling interest from discontinued operations		-			-						-
Net loss attribute to noncontrolling interest		(8,~~680~~562	)		(~~9,932~~61	)		(118	)		(9,993	)
Net loss to the Company from continuing operations		(1,~~961~~136,~~989~~278	)		(~~855~~1,~~602~~833,039	)		(3,098,267	)		(2,688,641	)
Net income to the Company from discontinued operations		-			~~833,546~~-			-			833,546
Net loss to the Company		(1,~~961~~136,~~989~~278	)		(221,~~056~~833,039	)		(3,098,267	)		(1,855,095	)
Other comprehensive item
Foreign currency translation loss attributable to the Company		(13,154	)		(161,216	)
Foreign currency translation gain (loss) attributable to the Company		(94,752	)		34,601			(107,906	)		(126,615	)
Foreign currency translation gain (loss) attributable to noncontrolling interest		41,306			(8	)
Foreign currency translation gain attributable to noncontrolling interest		19,296			116			60,602			29,850
Comprehensive loss attributable to the Company	$	(1,~~975~~231,~~143~~030	)	$	(~~183~~1,~~272~~798,438	)	$	(3,206,173	)	$	(1,981,710	)
Comprehensive income (loss) attributable to noncontrolling interest	$	32,626		$	(9,940	)
Comprehensive income attributable to noncontrolling interest	$	27,858		$	55		$	60,484		$	19,857
Basic and diluted net loss per share	$	(0.4916	)	$	(0.0172	)	$	(0.56	)	$	(0.82	)
Weighted average shares used for computing basic and diluted loss per share *		47,~~041~~170,~~052~~852			12,~~963~~538,~~066~~286			5,582,115			2,250,711

retroactively reflect 1-for-15 reverse stock split effective on January 19, 2024

The accompanying notes are an integral part of these consolidated financial statements.

DATASEA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

SIX AND THREE MONTHS ENDED ~~SEPTEMBER~~DECEMBER 3031, 2024 AND 2023

(UNAUDITED)

	Common Stock				Additional paid-in			Accumulated			Accumulated other comprehensive						Noncontrolling
	Shares		Amount		capital			deficit			income			Total			interest
Balance at July 1, 2024		3,589,620	$	3,590	$	38,957,780		$	(39,440,322	)	$	242,208		$	(236,745	)	$	(71,533	)
Net loss		-		-		-			(1,961,989	)		-			(1,961,989	)		(8,680	)
Noncontrolling interest disposal at closure of the entity		-		-		-			-			-			-			1,391
Issuance of common stock for equity financing		692,308		692		1,958,059			-			-			1,958,751			-
Issuance of common stock for equity financing - related parties		1,932,224		1,932		3,978,449			-			-			3,980,381			-
Shares issued for stock compensation expense		75,000		75		374,925			-			-			375,000			-
Shares issued for purchase of intangible assets from the Company’s major shareholders		797,850		798		(798	)		-			-			-			-
Foreign currency translation gain (loss)		-		-		-			-			(13,154	)		(13,154	)		41,306
Balance at September 30, 2024		7,087,002	$	7,087	$	45,268,415		$	(41,402,311	)	$	229,054		$	4,102,245		$	(37,516	)
Net loss		-		-		-			(1,136,278	)		-			(1,136,278	)		8,562
Forgiveness of debt by shareholder		-		-		183,351			-			-			183,351			-
Shares issued for stock compensation expense		77,400		77		181,423			-			-			181,500			-
Foreign currency translation gain (loss)		-		-		-			-			(94,752	)		(94,752	)		19,296
Balance at December 31, 2024		7,164,402	$	7,164	$	45,633,189		$	(42,538,589	)	$	134,302		$	3,236,066		$	(9,658	)
Balance at July 1, 2023		1,889,315	$	1,889	$	24,148,868		$	(28,063,258	)	$	393,252		$	(3,519,249	)	$	(60,848	)
Net loss		-		-		-			(22,056	)		-			(22,056	)		(9,932	)
Issuance of common stock for equity financing		685,940		686		8,060,600			-			-			8,061,286			-
Shares issued for stock compensation expense		-		-		20,100			-			-			20,100			-
Foreign currency translation loss		-		-		-			-			(161,216	)		(161,216	)		(8	)
Balance at September 30, 2023		2,575,255	$	2,575	$	32,229,568		$	(28,085,314	)	$	232,036		$	4,378,865		$	(70,788	)
Net loss		-		-		-			(1,833,039	)		-			(1,833,039	)		(61	)
Shares issued for stock compensation expense		-		-		22,103			-			-			22,103			-
Foreign currency translation gain		-		-		-			-			34,601			34,601			116
Balance at December 31, 2023		2,575,255	$	2,575	$	32,251,671		$	(29,918,353	)	$	266,637		$	2,602,530		$	(70,733	)

The accompanying notes are an integral part of these consolidated financial statements.

DATASEA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	THREE MONTHS ENDED SEPTEMBER 30,
	SIX MONTHS ENDED DECEMBER 31,
	2024			2023
Cash flows from operating activities:
Loss including noncontrolling interest	$	(13,~~970~~098,~~669~~385	)	$	(311,~~988~~865,088	)
Adjustments to reconcile loss including noncontrolling interest to net cash used in operating activities:
Gain on disposal of subsidiary		-			(833,546	)
Bad debt reversal		(7,~~026~~005	)		-
Depreciation and amortization		85395,~~635~~741			~~137~~276,~~873~~116
Loss on disposal of fixed assets		23,~~815~~155			-
Operating lease expense		3877,~~932~~320			74107,~~181~~355
Stock compensation expense		375,000			20,100
Forgiveness of debt by shareholder		184,663			-
Stock compensation expense		556,500			42,203
Changes in assets and liabilities:
Accounts receivable		~~701~~504,~~384~~995			(2152,~~436~~805	)
Inventory		(51168,~~064~~864	)		~~137~~59,809
Value-added tax prepayment		(184,~~760~~710	)		(1425,~~121~~932	)
Prepaid expenses and other current assets		~~(384~~802,~~177~~142	)		(52,~~692~~589,~~660~~743	)
Accounts payable		(~~794~~759,~~504~~065	)		(~~179~~138,~~875~~820	)
Unearned revenue		187,~~242,820~~317			(45462,~~332~~043	)
Accrued expenses and other payables		79(90,~~650~~587	)		(5639,~~515~~242	)
Payment on operating lease liabilities		(3270,~~691~~789	)		(~~101~~111,~~231~~547	)
Net cash used in operating activities		(~~732~~1,~~655~~587,572	)		(65,~~744~~633,~~413~~283	)
Cash flows from investing activities:
Acquisition of property and equipment		(27,~~752~~255	)		(~~330~~3,683	)
Acquisition of intangible assets		(443,~~768~~950,272	)		-(68,098	)
Cash disposed due to disposal of subsidiary		-			(35	)
Net cash used in investing activities		(473,~~520~~957,527	)		(~~365~~71,816	)
Cash flows from financing activities:
Repayment to related parties		(426,944	)		(675,828	)
Proceeds from (repayment to) related parties		(239,307	)		116,841
Proceeds from loan payables		-			~~879~~153,~~422~~659
Repayment of loan payables		(40,~~815~~698	)		(~~184~~2,~~425~~090,005	)
Net proceeds from issuance of common stock		15,~~958~~939,~~751~~133			8,061,286
Net cash provided by financing activities		15,~~490~~659,~~992~~128			86,~~080~~241,~~455~~781
Effect of exchange rate changes on cash		45(27,~~527~~190	)		(~~136~~118,~~657~~694	)
Net increase in cash		~~756~~86,~~344~~839			1417,~~199,020~~988
Cash, beginning of period		181,262			19,728
Cash, end of period	$	~~937~~268,~~606~~101		$	1437,~~218,748~~716
Supplemental disclosures of cash flow information:
Cash paid for interest	$	917,~~214~~973		$	510,~~551~~535
Cash paid for income tax	$	-		$	-
Supplemental disclosures of non-cash financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	~~197~~196,~~347~~783		$	-124,824
Transfer of debt owing to the Company’s’ CEO to Mr. Wanli Kuai	$	-		$	727,503

The accompanying notes are an integral part of these consolidated financial statements.

DATASEA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30~~DECEMBER 31, 2024 (UNAUDITED) AND JUNE 30, 2024

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 under the laws of the PRC, to become wholly-owned subsidiaries of the Company; and Shuhai Information Technology Co., Ltd., also an LLC incorporated under the laws of the PRC (“Shuhai Beijing”), to become a VIE of the Company through a series of contractual agreements between Shuhai Beijing and Tianjin Information. The transaction was accounted for as a reverse merger, with Shuhai Skill (HK) and its subsidiaries being the accounting survivor. Accordingly, the historical financial statements presented are those of Shuhai Skill (HK) and its consolidated subsidiaries and VIE.

Following the Share Exchange, the Shareholders, Zhixin Liu and her father, Fu Liu, owned approximately 82% of the Company’s outstanding shares of Common Stock. As of October 29, 2015, there were 18,333,333 shares of Common Stock issued and outstanding, 15,000,000 of which were beneficially owned by Zhixin Liu and Fu Liu.

After the Share Exchange, the Company, through its consolidated subsidiaries and VIE provide smart security solutions primarily to schools, tourist or scenic attractions and public communities in China.

On October 16, 2019, Shuhai Beijing incorporated a wholly owned subsidiary, Heilongjiang Xunrui Technology Co. Ltd. (“Xunrui”), which develops and markets the Company’s smart security system products.

On December 3, 2019, Shuhai Beijing formed Nanjing Shuhai Equity Investment Fund Management Co. Ltd. (“Shuhai Nanjing”), a joint venture in PRC, in which Shuhai Beijing holds a 99% ownership interest with the remaining 1% held by Nanjing Fanhan Zhineng Technology Institute Co. Ltd, an unrelated party that was supported by both Nanjing Municipal Government and Beijing University of Posts and Telecommunications. Shuhai Nanjing was formed for gaining the easy access to government funding and private financing for the Company’s new technology development and new project initiation.

In January 2020, the Company acquired ownership in three entities for no consideration from the Company’s management, which set up such entities on the Company’s behalf (described below).

On January 3, 2020, Shuhai Beijing entered into two equity transfer agreements (the “Transfer Agreements”) with the President, and a Director of the Company. Pursuant to the Transfer Agreements, the Director and the President, each agreed, for no consideration, to (i) transfer his 51% and 49% respective ownership interests, in Guozhong Times (Beijing) Technology Ltd. (“Guozhong Times”) to Shuhai Beijing; and (ii) transfer his 51% and 49% respective ownership interests, in Guohao Century (Beijing) Technology Ltd. (“Guohao Century”) to Shuhai Beijing. Guozhong Times and Guohao Century were established to develop technology for electronic products, intelligence equipment and accessories, and provide software and information system consulting, installation and maintenance services.

On January 7, 2020, Shuhai Beijing entered into another equity transfer agreement with the President, the Director described above and an unrelated individual. Pursuant to this equity transfer agreement, the Director, the President and the unrelated individual each agreed to transfer his 51%, 16%, 33% ownership interests, in Guozhong Haoze (Beijing) Technology Ltd. (“Guozhong Haoze”) to Shuhai Beijing for no consideration. Guozhong Haoze was formed to develop and market the smart security system products.

On August 17, 2020, Beijing Shuhai formed a new wholly-owned subsidiary Shuhai Jingwei ~~(Shenzhen) Information Technology Co., Ltd (“Jingwei”),~~ to expand the security oriented systems developing, consulting and marketing business overseas.

On November 16, 2020, Guohao Century formed Hangzhou Zhangqi Business Management Limited Partnership (“Zhangqi”) with ownership of 99% as an ordinary partner. In November 2023, the Company dissolved Zhangqi as a result of disposal of Zhuangxun in July 2023, Zhangqi had no operations but only serves as a holding company of Zhagnxun. In November 2023, the Company dissolved Zhangqi.

On November 19, 2020, Guohao Century formed a 51% owned subsidiary Hangzhou Shuhai Zhangxun Information Technology Co., Ltd (“Zhangxun”) for research and development of 5G Multimodal communication technology. Zhangqi owns 19% of Zhangxun; accordingly, Guohao Century ultimately owns 69.81% of Zhangxun. On December 20, 2022, Guohao Century acquired a 30% ownership interests of Zhangxun from Zhengmao Zhang at the price of $0.15 (RMB 1.00). After the transaction, Guohao Century owns 81% of Zhangxun, and Zhangqi owns 19% of Zhangxun; On February 15, 2023, Guohao Century acquired a 9% ownership interests of Zhangxun from the Zhangqi at the price of $130,434 (RMB 900,000). After the transaction, Guohao Century owns 90% of Zhangxun, and Zhangqi owns 10% of Zhangxun; as a result, Guohao Century ultimately owns 99.9 % of Zhangxun. On July 20, 2023, the Company sold Zhangxun to a third party for RMB 2 ($0.28).

On February 16, 2022, Shuhai Jingwei formed Shenzhen Acoustic Effect Management Limited Partnership (“Shenzhen Acoustic MP”) with 99% ownership interest, the remaining 1% ownership interest is held by a third party.

On February 16, 2022, Shuhai Jingwei formed Shuhai (Shenzhen) Acoustic Effect Technology Co., Ltd (“Shuhai Shenzhen Acoustic Effect”), a PRC ~~Company~~company, in which Shuhai Jingwei holds 60% ownership interest, 10% ownership interest is held by Shenzhen Acoustic MP, and remaining 30% ownership interest is held by a third party. On October 18, 2022, Shuhai Jingwei acquired 30% ownership interest of Shuhai Acoustic Effect, a PRC ~~Company~~company from the third party at the price of approximately $0.15 (RMB 1.00). After the transaction, Shuhai Jingwei owns 90% of Shuhai Shenzhen Effect, and Shenzhen Acoustic MP still owns 10% of Shuhai Shenzhen Effect; accordingly, Shuhai Jingwei ultimately owns 100% of Shuhai Acoustic Effect. The book value of 30% interest acquired from the third party was $(26,993) due to its accumulated deficit.

On March 4, 2022, Shuhai Beijing formed Beijing Yirui Business Management Development Center (“Yirui”) with 99% ownership interest as an ordinary partner, the remaining 1% ownership interest is held by Zhixin Liu.

On March 4, 2022, Shuhai Beijing formed Beijing Yiying Business Management Development Center (“Yiying”) with 99% ownership interest as an ordinary partner, the remaining 1% ownership interest is held by Zhixin Liu.

On July 31, 2023, Datasea established a wholly owned subsidiary Datasea Acoustic, LLC (“Datasea Acoustic”) in the state of Delaware for expanding the products to the market in North America.

On October 24, 2023, Guozhong Times formed Shuhai Yiyun (Shenzhen) digital technology Co, Ltd (“Yiyun”) with 66% ownership interest, the remaining 34% ownership interest is held by a third party. As of the report date, Yiyun did not have any operations.

On January 10, 2024, the Company’s Board of Directors approved a reverse stock split of its authorized and issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-15, which become legal effective on January 19, 2024. After the reverse stock split, every 15 issued and outstanding shares of the Company’s Common Stock was converted automatically into one share of the Company’s Common Stock without any change in the par value per share. The total number of shares of Common Stock authorized for issuance was then reduced by a corresponding proportion from 375,000,000 shares to 25,000,000 shares of Common Stock. All share amounts have been retroactively restated to reflect the reverse stock split for all periods presented.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GOING CONCERN

The accompanying ~~consolidated~~ consolidated financial statements (“CFS”) were prepared assuming the Company will continue as a going concern, which ~~contemplates~~ contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the three months ended ~~September~~December 3031, 2024 and 2023, the Company had a net loss of approximately $1.9614 million and $221.83 million,~~056,~~ respectively. For ~~The~~the six months ended December 31, 2024 and 2023, the Company had a net loss of approximately $3.10 million and $1.86 million, respectively. The Company had an accumulated deficit of approximately $4142.4054 million as of ~~September~~December 3031, 2024, and negative cash flow from operating ~~activities~~ activities of approximately $01.7359 million and $65.7463 million for the ~~three~~six months ended ~~September~~December 3031, 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.

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 business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations. If the Company is unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay, reduce or cease its operations.

BASIS OF PRESENTATION AND CONSOLIDATION

The CFS were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding CFS. The accompanying CFS include the financial statements of the Company and its 100% owned subsidiaries Shuhai Information Skill (HK) Limited (“Shuhai Skill (HK)”), and Tianjin Information ~~sea~~ Sea Information Technology Co., Ltd. (“Tianjin Information”), and its VIE, Shuhai Beijing, and Shuhai Beijing’s 100% owned subsidiaries – Heilongjiang Xunrui Technology Co. Ltd. (“Xunrui”), Guozhong Times (Beijing) Technology Ltd. (“Guozhong Times”), Guohao Century (Beijing) Technology Ltd. (“Guohao Century”), Guozhong Haoze, and Shuhai Jingwei (Shenzhen) Information Technology Co., Ltd. (“Jingwei”), and Shuhai Beijing’s 99% owned subsidiary Nanjing Shuhai Equity Investment Fund Management Co. Ltd. (“Shuhai Nanjing”). During the year ended June 30, 2022, the Company incorporated two new subsidiaries Shuhai (Shenzhen) Acoustic Effect Technology Co., Ltd (“Shuhai Acoustic”) and Shenzhen Acoustic Effect Management Partnership (“Shenzhen Acoustic MP”). All significant inter-company transactions and balances were eliminated in consolidation. The chart below depicts the corporate structure of the Company as of ~~September~~December 3031, 2024.

VARIABLE INTEREST ENTITY

Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 810, “Consolidation” (“ASC 810”), the Company is required to include in its CFS, the financial statements of Shuhai Beijing, its VIE. ASC 810 requires a VIE to be consolidated if the Company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. A VIE is an entity in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards of such entity, and therefore the Company is the primary beneficiary of such entity.

Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entity’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de - facto agents, have the unilateral ability to exercise those rights. Shuhai Beijing’s actual stockholders do not hold any kick-out rights that affect the consolidation determination.

Through the VIE agreements, Tianjin Information, an indirect subsidiary of Datasea is deemed the primary beneficiary of Shuhai Beijing and its subsidiaries. Accordingly, the results of Shuhai Beijing and its subsidiaries were included in the accompanying CFS. Shuhai Beijing has no assets that are collateral for or restricted solely to settle their obligations. The creditors of Shuhai Beijing do not have recourse to the Company’s general credit.

VIE Agreements

Operation and Intellectual Property Service Agreement – The Operation and Intellectual Property Service Agreement allows Tianjin Information Sea Information Technology Co., Ltd (“WFOE”) to manage and operate Shuhai Beijing and collect an operating fee equal to Shuhai Beijing’s pre-tax income, per month. If Shuhai Beijing suffers a loss and as a result does not have pre-tax income, such loss shall be carried forward to the following month to offset the operating fee to be paid to WFOE if there is pre-tax income of Shuhai Beijing the following month. Furthermore, if Shuhai Beijing cannot pay off its debts, WFOE shall pay off the debt on Shuhai Beijing’s behalf. If Shuhai Beijing’s net assets fall lower than its registered capital balance, WFOE shall provide capital for Shuhai Beijing to make up for the deficit.

Under the terms of the Operation and Intellectual Property Service Agreement, Shuhai Beijing entrusts Tianjin Information to manage its operations, manage and control its assets and financial matters, and provide intellectual property services, purchasing management services, marketing management services and inventory management services to Shuhai Beijing. Shuhai Beijing and its stockholders shall not make any decisions nor direct the activities of Shuhai Beijing without Tianjin Information’s consent.

Stockholders’ ~~Voting~~ Voting Rights Entrustment Agreement – Tianjin Information has entered into a stockholders’ voting rights entrustment ~~agreement~~ agreement (the “Entrustment Agreement”) under which Zhixin Liu and Fu Liu (collectively the “Shuhai Beijing Stockholders”) have vested their voting power in Shuhai Beijing to Tianjin Information or its designee(s). The Entrustment Agreement does not have an expiration date, but the parties can agree in writing to terminate the Entrustment Agreement. Zhixin Liu, is the Chairman of the Board, President, CEO of DataSea and Corporate Secretary, and Fu Liu, a Director of ~~the~~ DataSea (Fu Liu is the father of Zhixin Liu).

Equity Option Agreement – the Shuhai Beijing Stockholders and Tianjin Information entered into an equity option agreement (the “Option Agreement”), pursuant to which the Shuhai Beijing Stockholders have granted Tianjin Information or its designee(s) the irrevocable right and option to acquire all or a portion of Shuhai Beijing Stockholders’ equity interests in Shuhai Beijing for an option price of RMB0.001 for each capital contribution of RMB1.00. Pursuant to the terms of the Option Agreement, Tianjin Information and the Shuhai Beijing Stockholders have agreed to certain restrictive covenants to safeguard the rights of Tianjin Information under the Option Agreement. Tianjin Information agreed to pay RMB1.00 annually to Shuhai Beijing Stockholders to maintain the option rights. Tianjin Information may terminate the Option Agreement upon prior written notice. The Option Agreement is valid for a period of 10 years from the effective date and renewable at Tianjin Information’s option.

Equity Pledge Agreement – Tianjin Information and the Shuhai Beijing Stockholders entered into an equity pledge agreement on October 27, 2015 (the “Equity Pledge Agreement”). The Equity Pledge Agreement serves to guarantee the performance by Shuhai Beijing of its obligations under the Operation and Intellectual Property Service Agreement and the Option Agreement. Pursuant to the Equity Pledge Agreement, Shuhai Beijing Stockholders have agreed to pledge all of their equity interests in Shuhai Beijing to Tianjin Information. Tianjin Information has the right to collect any and all dividends, bonuses and other forms of investment returns paid on the pledged equity interests during the pledge period. Pursuant to the terms of the Equity Pledge Agreement, the Shuhai Beijing Stockholders have agreed to certain restrictive covenants to safeguard the rights of Tianjin Information. Upon an event of default or certain other agreed events under the Operation and Intellectual Property Service Agreement, the Option Agreement and the Equity Pledge Agreement, Tianjin Information may exercise the right to enforce the pledge.

As of this report date, there were no dividends paid from the VIE to the U.S. parent company or the shareholders of the Company. There has been no change in facts and circumstances to consolidate the VIE.

The ~~following~~ following financial statement amounts and balances of the VIE were included in the accompanying CFS as of ~~September~~December 3031, 2024 and June 30, 2024, and for the three and six months ended ~~September~~December 3031, 2024 and 2023, respectively.

	September 30, 2024		June 30, 2024
	December 31, 2024		June 30, 2024
Cash	$	~~199~~82,~~085~~805	$	93,154
Accounts receivable		18210,~~445~~980		718,546
Inventory		~~207~~319,~~662~~541		119,053
Other current assets		1299,~~582,860~~182		295,305
Total current assets		2912,~~008,052~~508		1,226,058
Property and equipment, net		3132,~~537~~363		30,934
Intangible asset, net		~~459~~453,~~040~~002		441,485
Right-of-use asset, net		~~197~~172,~~021~~158		11,045
Total non-current assets		~~687~~657,~~598~~523		483,464
Total assets	$	21,~~695~~570,~~650~~031	$	1,709,522
Accounts payable	$	7996,~~937~~795	$	765,998
Accrued liabilities and other payables		~~806~~724,~~736~~183		713,827
Lease liability		73,~~753~~816		11,981
Loans payable		1,~~148~~119,~~786~~860		1,170,298
Other current liabilities		1282,~~329,090~~978		150,835
Total current liabilities		32,~~438~~297,~~302~~632		2,812,939
Lease liability - noncurrent		~~132~~110,~~541~~924		-
Total non-current liabilities		~~132~~110,~~541~~924		-
Total liabilities	$	32,~~570~~408,~~843~~556	$	2,812,939

	For the Three Months Ended September 30, 2024		For the Three Months Ended September 30, 2023
Revenues	$	21,081,094	$	6,880,743
Gross profit	$	238,134	$	74,735
Net loss	$	452,170	$	(419,473	)*

* exclude the gain from disposal of Zhangxun of $0.83 million.

	For the Three Months Ended December 31, 2024		For the Three Months Ended December 31, 2023
Revenues	$	20,456,553	$	11,279,181
Gross profit	$	467,329	$	101,581
Net loss	$	10,091	$	(486,358	)

	For the Six Months Ended December 31, 2024		For the Six Months Ended December 31, 2023
Revenues	$	41,537,647	$	18,159,924
Gross profit	$	705,463	$	176,316
Net loss	$	442,099	$	66,885

USE OF ESTIMATES

The preparation of CFS in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The significant areas requiring the use of management estimates include, but are not limited to, the estimated useful life and residual value of property, plant and equipment, provision for staff benefits, recognition and measurement of deferred income taxes and the valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to the CFS.

CONTINGENCIES

Certain conditions may exist as of the date the CFS are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s CFS.

If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. As of September 30, 2024 and June 30, 2024, the Company has no such contingencies.10

If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. As of December 31, 2024, and June 30, 2024, the Company has no such contingencies.

CASH

Cash includes cash on hand and demand deposits that are highly liquid in nature and have original maturities when purchased of three months or less.

ACCOUNTS RECEIVABLE

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. The Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit losses on financial instruments later codified as Accounting Standard codification (“ASC”) 326 (“ASC 326”), on July 1, 2023. The guidance introduces a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. There was no significant impact on the date of adoption of ASC 326.

Under ASC 326, accounts receivable are recorded at the invoiced amount, net of allowance for expected credit losses. The Company’s primary allowance for credit losses is the allowance for doubtful accounts. The allowance for doubtful accounts reduces the accounts receivable balance to the estimated net realizable value. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors. In establishing any required allowance, management considers historical losses adjusted for current market conditions, the Company’s customers’ financial condition, the amount of any receivables in dispute, the current receivables aging, current payment terms and expectations of forward-looking loss estimates.

All provisions for the allowance for doubtful accounts are included as a component of general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. Subsequent recoveries of amounts previously written off are credited to earnings in the period recovered. As of December ~~September 30~~31, 2024 and June 30, 2024, the Company had a $0 bad debt allowance for ~~accounts~~credit ~~receivable~~losses.

INVENTORY

Inventory is comprised principally of intelligent temperature measurement face recognition terminal and identity information recognition products, and is valued at the lower of cost or net realizable value. The value of inventory is determined using the first-in, first-out method. The Company periodically estimates an inventory allowance for estimated unmarketable inventories when necessary. Inventory amounts are reported net of such allowances. There were $5453,~~564~~190 and $53,650 allowances for slow-moving and obsolete inventory (mainly for Smart-Student Identification cards) as of ~~September~~December 3031, 2024 and June 30, 2024, respectively.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation. Major repairs and improvements that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method over estimated useful lives as follows:

Furniture and fixtures		3-5 years
Office equipment		3-5 years
Vehicles		5 years
Leasehold improvement		3 years

Leasehold improvements are depreciated utilizing the straight-line method over the shorter of their estimated useful lives or remaining lease term.

INTANGIBLE ASSETS

Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit. Evaluation of the recoverability of intangible assets is made to take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of the Company’s intangible assets are subject to amortization. No impairment of intangible assets has been identified as of the balance sheet date.

Intangible assets include licenses, certificates, patents and other technology and are amortized over their useful life of three years.

FAIR VALUE (“FV”) OF FINANCIAL INSTRUMENTS

The carrying value of the Company’s short-term financial instruments, such as cash, accounts receivable, prepaid expenses, accounts payable, unearned revenue, accrued expenses and other payables approximates their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest.

FAIR VALUE MEASUREMENTS AND DISCLOSURES

FASB ASC Topic 820, “Fair Value Measurements,” defines FV, and establishes a three-level valuation hierarchy for disclosures that enhances disclosure requirements for FV measures. The three levels are defined as follows:

●

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include other than those in level 1 quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement.

As of ~~September~~December 3031, 2024 and June 30, 2024, the Company did not identify any assets or liabilities required to be presented on the balance sheet at FV on a recurring basis.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with FASB ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset.

If such assets are considered impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its FV. FV generally is determined using the asset’s expected future undiscounted cash flows or market value, if readily determinable. Assets to be disposed of are reported at the lower of the carrying amount or FV less cost to sell. For the three months ended September 30, 2024 and 2023, there was no impairment loss recognized on long-lived assets. 12

If such assets are considered impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its FV. FV generally is determined using the asset’s expected future undiscounted cash flows or market value, if readily determinable. Assets to be disposed of are reported at the lower of the carrying amount or FV less cost to sell. For the three and six months ended December 31, 2024 and 2023, there was no impairment loss recognized on long-lived assets.

UNEARNED REVENUE

The Company records payments received in advance from its customers or sales agents for the Company’s products as unearned revenue, mainly consisting of deposits or prepayment for 5G products from the Company’s sales agencies. These orders normally are delivered based upon contract terms and customer demand, and the Company will recognize it as revenue when the products are delivered to the end customers.

LEASES

The Company determines if an arrangement is a lease at inception under FASB ASC Topic 842. Right of Use Assets (“ROU”) and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU assets include adjustments for prepayments and accrued lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The Company recognized no impairment of ROU assets as of ~~September~~December 3031, 2024 and June 30, 2024.

REVENUE RECOGNITION

The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606).

The core principle underlying FASB ASC 606 is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are identified when possession of goods and services is transferred to a customer.

FASB ASC Topic 606 requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies each performance obligation.

The Company derives its revenues from product sales and 5G messaging service contracts with its customers, with revenues recognized upon delivery of services and products. Persuasive evidence of an arrangement is demonstrated via product sale contracts and professional service contracts, with performance obligations identified. The transaction price, such as product selling price, and the service price to the customer with corresponding performance obligations are fixed upon acceptance of the agreement. The Company recognizes revenue when it satisfies each performance obligation, the customer receives the products and passes the inspection and when professional service is rendered to the customer, collectability of payment is probable. These revenues are recognized at a point in time after each performance obligations is satisfied. Revenue is recognized net of returns and value-added tax charged to customers.

The following table shows the Company’s revenue by revenue sources:

	For the Three Months Ended September 30, 2024		For the Three Months Ended September 30, 2023
	For the Three Months Ended December 31, 2024		For the Three Months Ended December 31, 2023
5G AI Multimodal communication	$	21,075,584	$	6,880,463
5G AI Multimodal Digital Business	$	20,085,988	$	11,276,319
5G AI Multimodal communication		21,075,584		6,880,463
5G AI Multimodal top up		19,887,721		11,276,319
Cloud platform construction cooperation project		-		-
5G AI digital technical service		198,267		-
Acoustic Intelligence Business		243,~~464~~304		~~280~~2,862
Ultrasonic Sound Air Disinfection Equipment		235,~~464~~076		~~280~~2,862
Other		-		-
Upgraded Sonic Sterilization and Purification Guardian		5,167		-
Smart City business		3,046		-
Sleep Monitor		3,061		-
Smart community		3,046		-
Software licensing		326,936		-
Smart community broadcasting system		-		-
Other		176		69,288
Smart agriculture		-		-
Total revenue	$	20,456,404	$	11,348,469
Other		-		-
Total revenue	$	21,081,094	$	6,880,743

* include the revenue from discontinued entities

	For the Six Months Ended December 31, 2024		For the Six Months Ended December 31, 2023
5G AI Multimodal communication	$	41,161,572	$	18,156,782
5G AI Multimodal communication		40,963,305		18,156,782
5G AI digital technical service		198,267		-
Acoustic Intelligence Business		45,768		3,142
Ultrasonic Sound Air Disinfection Equipment		37,540		3,142
Upgraded Sonic Sterilization and Purification Guardian		5,167		-
Sleep Monitor		3,061		-
Software licensing		326,936		-
Smart City business		3,046		-
Smart community		3,046		-

Other		176		69,288
Total revenue	$	41,537,498	$	18,229,212

SEGMENT INFORMATION

FASB ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the method a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined the Company’s current operations constitutes a single reportable segment in accordance with ASC 280. The Company’s only business and industry segment is high technology and advanced information systems (“TAIS”). TAIS includes smart city solutions that meet the security needs of residential communities, schools and commercial enterprises, and 5G messaging services including 5G SMS, 5G MMCP and 5G multi-media video messaging.

All of the Company’s customers are in the PRC and all revenues for the three months ended September 30, 2024 and 2023 were generated from the PRC. All identifiable assets of the Company are located in the PRC. Accordingly, no geographical segments are presented.14

All of the Company’s customers are in the PRC and all revenues for the three and six months ended December 31, 2024 and 2023 were generated from the PRC. All identifiable assets of the Company are located in the PRC. Accordingly, no geographical segments are presented.

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under the provisions of FASB ASC Topic 740, when tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. As of ~~September~~December 3031, 2024 and June 30, 2024, the Company had no unrecognized tax positions and no charges during the three and six months ended ~~September~~December 3031, 2024 and 2023, and accordingly, the Company did not recognize any interest or penalties related to unrecognized tax benefits. The Company files a U.S. and PRC income tax return. With few exceptions, the Company’s U.S. income tax returns filed for the years ending on June 30, 2018 and thereafter are subject to examination by the relevant taxing authorities; the Company uses calendar year-end for its PRC income tax return filing, PRC income tax returns filed for the years ending on December 31, 2018 and thereafter are subject to examination by the relevant taxing authorities.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses are expensed in the period when incurred. These costs primarily consist of cost of materials used, salaries paid for the Company’s development department, and fees paid to third parties.

14 15

NONCONTROLLING INTERESTS

The Company follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCI (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to non-controlling interests even when such allocation might result in a deficit balance.

The net Income (loss) attributed to NCI was separately designated in the accompanying statements of operations and comprehensive income (loss). Losses attributable to NCI in a subsidiary may exceed a non-controlling interest’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. On December 20, 2022, Guohao Century acquired a 30% ownership noncontrolling interests of Zhangxun from Zhengmao Zhang at the price of $0.15 (RMB 1.00). The Company recognized a paid in capital deficit of $982,014 from this purchase due to continued loss of Zhangxun. Subsequent to this purchase, the Company ultimately holds a 99.9% ownership of Zhangxun. On July 20, 2023, the Company sold Zhangxun to a third party for RMB 2 ($0.28).

Zhangqi was 1% owned by noncontrolling interest, in November 2023, the Company dissolved Zhangqi. As of December 31, 2023, Shuhai Nanjing was 1% owned by noncontrolling interest, Shenzhen Acoustic MP was 1% owned by noncontrolling interest, Shuhai Shenzhen Acoustic was 0.1% owned by noncontrolling interest, Guozhong Times was 0.091% owned by noncontrolling interest, and Guozhong Haoze was 0.091% ~~owned~~ owned by noncontrolling interest. During the three months ended ~~September~~December 3031, 2024 and 2023, the Company had ~~loss~~net income of $8,~~680~~562 and net loss of $61 attributable to the noncontrolling interest from continuing operations, respectively. During the six months ended December 31, 2024 and 2023, the Company had net loss of $118 and $9,~~932~~993 attributable to the noncontrolling interest from continuing operations, respectively.

CONCENTRATION OF CREDIT RISK

The Company maintains cash in accounts with state-owned banks within the PRC. Cash in state-owned banks less than RMB500,000 ($76,000) is covered by insurance. Should any institution holding the Company’s cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in these bank accounts. Cash denominated in RMB with a U.S. dollar equivalent of $~~645~~116,~~916~~392 and $100,788 as of ~~September~~December 3031, 2024 and June 30, 2024, respectively, was held in accounts at financial institutions located in the PRC‚ which is not freely convertible into foreign currencies.

Cash held in accounts at U.S. financial institutions is insured by the Federal Deposit Insurance Corporation or other programs subject to certain limitations up to $250,000 per depositor. As of ~~September~~December 3031, 2024 and June 30, 2024, cash of $~~290~~150,~~077~~094 and $79,225 was maintained at U.S. financial institutions. Cash was maintained at financial institutions in Hong Kong, and was insured by the Hong Kong Deposit Protection Board up to a limit of HK $500,000 ($64,000). As of ~~September~~December 3031, 2024 and June 30, 2024, the cash balance of $1,~~613~~615 and $1,249 was maintained at financial institutions in Hong Kong. The Company, its subsidiaries and VIE have not experienced any losses in such accounts and do not believe the cash is exposed to any significant risk.

FOREIGN CURRENCY TRANSLATION AND COMPREHENSIVE INCOME (LOSS)

The accounts of the Company’s Chinese entities are maintained in RMB and the accounts of the U.S. parent company are maintained in United States dollar (“USD”). The financial statements of the Chinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical rates and the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from foreign currency transactions are reflected in the statements of operations.

The Company follows FASB ASC Topic”220-10, “Comprehensive Income (loss).” Comprehensive income (loss) comprises net income (loss) and all changes to the statements of changes in stockholders’ equity, except those due to investments by stockholders, changes in additional paid-in capital and distributions to stockholders.

The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the CFS were as follows:

September 30,

June 30,

December 31,

June 30,

2024

2023

2024

Period-end date USD: RMB exchange rate

7.~~0074~~13733

7.~~1798~~0827

7.1268

Average USD for the reporting period: RMB exchange rate

7.~~1169~~18840

7.~~1729~~1587

7.1326

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE (EPS)

Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to have been exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

STATEMENT OF CASH FLOWS

In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts shown on the statement of cash flows may not necessarily agree with changes in the corresponding asset and liability on the balance sheet.

RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU 2023-07, the amendments in the ASU are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial position, statements of comprehensive income and cash flows.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

	September 30, 2024		June 30, 2024
	December 31, 2024		June 30, 2024
Furniture and fixtures	$	6967,~~024~~286	$	77,281
Vehicle		~~499~~487		491
Leasehold improvement		~~223~~218,~~693~~060		219,945
Office equipment		~~246~~242,~~333~~572		241,543
Subtotal		~~539~~528,~~549~~405		539,260
Less: accumulated depreciation		~~495~~487,~~869~~006		490,794
Total	$	4341,~~680~~399	$	48,466

~~Depreciation for the three months ended September 30, 2024 and 2023 was $5,463 and $10,662, respectively.~~ 17

Depreciation for the three months ended December 31, 2024 and 2023 was $5,336 and $7,802, respectively. Depreciation for the six months ended December 31, 2024 and 2023 was $10,799 and $18,464, respectively.

NOTE 4 – INTANGIBLE ASSETS

Intangible assets are summarized as follows:

	September 30, 2024		June 30, 2024
	December 31, 2024		June 30, 2024
Software registration or using right	$	1,~~866~~893,~~254~~936	$	1,809,548
Patent		143,~~980~~846,773		14,729
Software and technology development costs		11,~~970~~669		11,770
Value-added telecommunications business license		15,~~853~~454		15,587
Subtotal		15,~~909~~767,~~057~~832		1,851,634
Less: Accumulated amortization		1,~~390~~686,~~751~~288		1,305,633
Total	$	~~518~~4,~~306~~081,544	$	546,001

Software registration or using right represented the purchase cost of customized software with its source code from third party software developer.

Software and technology development cost represented development costs incurred internally after the technological feasibility was established and a working model was produced and was recorded as intangible asset.

~~Amortization~~On October ~~for~~14, ~~the~~2024, ~~three~~Tianjin ~~months ended~~Information, ~~September~~as 30the purchaser, ~~2024~~entered ~~and~~into ~~2023~~a ~~was~~patent ~~$80,172 and~~purchase ~~$127,211,~~agreement ~~respectively.~~with ~~The~~Hangzhou ~~amortization~~Liuhuan ~~expense~~Technology ~~for~~Limited Company (“Liuhuan”), as the ~~next~~seller, ~~five~~for ~~years~~the asacquisition of an audio playback system based on voltage following. The total ~~September~~purchase ~~30,~~price ~~2024 will~~is ~~be $261~~RMB 14,~~379~~900,000 ($~~174~~2.1 million),~~020,~~ ~~$82~~inclusive of a 6% VAT,~~907,~~ $0 and $0will be amortized over the three years.

On October 14, 2024, Tianjin Information, as the purchaser, entered into another patent purchase agreement with Hangzhou Liuhuan Technology Limited Company (“Liuhuan”), as the seller, for the acquisition of a B-ultrasound image target detection method and B-ultrasound scanner. The total purchase price is RMB 14,300,000 ($2.0 million), inclusive of a 6% VAT, and will be amortized over the three years.

Amortization for the three months ended December 31, 2024 and 2023 was $304,770 and $130,441, respectively. Amortization for the six months ended December 31, 2024 and 2023 was $384,942 and $257,652, respectively. The amortization expense for the next five years as of December 31, 2024 will be $1,432,766, $1,425,453, $1,223,325, $0 and $0.

NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following:

	September 30, 2024		June 30, 2024
	December 31, 2024		June 30, 2024
Security deposit	$	8497,~~556~~626	$	64,041
Prepaid expenses		~~474~~468,~~229~~792		1,225,612
Prepaid 5G Cost		1,239,516		-
Other receivables – Heqin		456,291		467,250
Other receivables – Heqin		468,077		467,250
Advance to third party individuals, no interest, payable upon demand		113,432		154,345
Advance to third party individuals, no interest, payable upon demand		106,330		154,345
Others		4,933		42,958
Others		4,368		42,958
Total		1,141,074		1,954,206
Total		2,377,076		1,954,206
Less: allowance for other receivables – Heqin		456,291		467,250
Less: allowance for other receivables – Heqin		468,077		467,250
Total	$	684,783	$	1,486,956
Total	$	1,908,999	$	1,486,956

17 18

As of ~~September~~December 3031, 2024, prepaid expenses mainly consisted of input VAT for purchasing patents of $229,930, prepayment of 5G messaging service fee recharge of $~~134~~131,~~628~~239, prepaid professional fee of $~~229~~9,~~471~~525, prepayment for inventory purchase of $6765,~~385~~688, prepaid rent and property management fee of $~~3,568~~931 and other prepayments of $3931,~~177~~479.

As of June 30, 2024, prepaid expenses mainly consisted of prepaid marketing expense of $946,954 (see below), prepaid telecommunication service fee (mainly including SMS and MMS services) of $198,559, prepaid rent and property management fees of $3,508 and other prepayments of $76,591.

Prepaid marketing expense

On September 16, 2023, Tianjin Information entered an Operation Cooperation Agreement with an unrelated company, Beijing Jincheng Haoda Construction Engineering Co., Ltd (“Jincheng Haoda”), for marketing and promoting the sale of 5G messaging and acoustic intelligence series products in oversea market. The cooperation term is from September 16, 2023 through September 15, 2026. Jincheng Haoda is committed to complete RMB 200 million sales performance in the first year, RMB 300 million sales performance in the second year, and RMB 400 million sales performance in the third year. The Company will pay 25% of the sales amount to Jincheng Haoda as marketing fee upon receipt of the sales amount, on monthly basis. As of ~~September~~December 3031, 2024, the Company made a prepayment of RMB 14,997,000 ($2,088,777) to Jincheng Haoda for facilitating the quick capture of the market for the Company’s products, the prepayment was the 30% of marketing service fee of first year’s target sales to be completed by Jincheng Haoda. During the service term, the Company will perform the annual assessment, if Jincheng Haoda was not able to achieve the target annual sales, and did not reach 30% of target annual sales amount, Jincheng Haoda shall return the Company’s prepayment after deducting the marketing service fee of the actual sales. In addition, under the circumstance Jincheng Haoda did not complete the 30% of the annual target sales, Jincheng Haoda will indemnify the Company 20% of marketing service fee of unachieved sales amount from the 30% of the annual target sales. For the three and six months ended ~~September 30~~December 31, 2024, the Company recorded an amortization of prepaid expense of nil and $0.53 million in the selling expense; this prepaid marketing expense was fully amortized as of September 30, 2024.

On September 18, 2023, Tianjin Information entered an Operation Cooperation Agreement with an unrelated company, Beijing Jiajia Shengshi Trading Co., Ltd (‘Jiajia Shengshi”), for marketing and promoting the sale of 5G messaging and acoustic intelligence series products in domestic market. The cooperation term is from September 18, 2023 through September 17, 2026. Jiajia Shengshi is committed to complete RMB 200 million sales performance in the first year, RMB 300 million sales performance in the second year, and RMB 500 million sales performance in the third year. The Company will pay 20% of the sales amount to Jiajia Shengshi as marketing fee upon receipt of the sales amount, on a monthly basis. As of ~~September~~December 3031, 2024, the Company made a prepayment of RMB 11,998,000 ($1,671,077) to Jiajia Shengshi for facilitating the quick capture of the market for the Company’s products, the prepayment was the 30% of marketing service fee of first year’s target sales to be completed by Jiajia Shengshi. During the service term, the Company will perform the annual assessment, if Jiajia Shengshi was not able to achieve the target annual sales, and did not reach 30% of target annual sales amount, Jiajia Shengshi shall return the Company’s prepayment after deducting the marketing service fee of the actual sales. In addition, under the circumstance Jiajia Shengshi did not complete the 30% of the annual target sales, Jiajia Shengshi will indemnify the Company 20% of marketing service fee of unachieved sales amount from the 30% of the annual target sales. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded an amortization of prepaid expense of nil and $0.42 million in the selling expense; this prepaid marketing expense was fully amortized as of September 30, 2024.

Other receivables – Heqin

On February 20, 2020, Guozhong Times entered an Operation Cooperation Agreement with an unrelated company, Heqin (Beijing) Technology Co, Ltd. (“Heqin”), for marketing and promoting the sale of Face Recognition Payment Processing equipment and related technical support, and other products of the Company including Epidemic Prevention and Control Systems. Heqin has a sales team which used to work with Fortune 500 companies and specializes in business marketing and sales channel establishment and expansion, especially in education industry and public area.

The cooperation term is from February 20, 2020 through March 1, 2023; however, Heqin is the exclusive distributor of the Company’s face Recognition Payment Processing products for the period to July 30, 2020. During March and April 2020, Guozhong Times provided operating funds to Heqin, together with a credit line provided by Guozhong Times to Heqin from May 2020 through August 2020, for a total borrowing of RMB 10 million ($1.41 million) for Heqin’s operating needs. As of March 31, 2023, Guozhong Times had an outstanding receivable of RMB 3.53 million ($513,701) from Heqin and was recorded as other receivables. The Company would not charge Heqin any interest, except for two loans of RMB 200,000 ($28,250) each, due on June 30, 2020 and August 15, 2020, respectively, for which the Company charges 15% interest if Heqin did not repay by the due date.

No profits will be allocated and distributed before full repayment of the borrowing. After Heqin pays in full the borrowing, Guozhong Times and Heqin will distribute profits of sale of Face Recognition Payment Processing equipment and related technical support at 30% and 70% of the net income, respectively. The profit allocation for the sale of other products of the Company are to be negotiated. Heqin will receive certain stock reward when it reaches the preset sales target under the performance compensation mechanism.

In November 2022, Hangzhou Yuetianyun Data Technology Company Ltd (“Yuetianyun”) agreed and acknowledged a Debt Transfer Agreement, wherein Heqin transferred its debt from Yuetianyun to Guozhong Times in the amount of RMB 1,543,400 ($213,596). For the six months ended December 31, 2024 and 2023, repayment of $7,005 (through Yuetianyun) and $nil was received. As of ~~September~~December 3031, 2024 and June 30, 2024, Heqin made $5755,~~083~~645 (through Yuetianyun) and $48,438 repayment to the Company, and the Company made a bad debt allowance of $~~468~~456,~~077~~291 and $467,250 as of ~~September~~December 3031, 2024 and June 30, 2024, respectively.

NOTE 6 – ~~LONG~~Unearned ~~TERM INVESTMENT~~revennue

InThe balance ~~November~~of ~~2021,~~unearned ~~Shuhai~~revenue ~~Nanjing invested~~was ~~RMB 200~~$135,~~000~~514 (and $2949,~~800) for~~239 ~~6.21%~~as ~~stock ownership~~ of aDecember ~~high-tech company Nanjing Dutao Intelligence Technology Co.~~31, ~~Ltd~~ in2024 ~~Nanjing~~and ~~City~~June ~~specializing on internet security equipment. As of September~~ 30, 2024, ~~the Company recorded a full impairment for this investment~~respectively.

~~In August 2022, Shuhai Nanjing~~The ~~invested~~following ~~RMB 200,000 ($28,717)~~presents ~~for 1%~~the ~~stock~~roll-forward ~~ownership~~schedule of aunearned ~~high-tech~~revenue ~~company~~for ~~Nanjing~~the ~~Jinjizhihui~~six ~~Technology~~months ~~Co.~~ended ~~Ltd~~December ~~in Nanjing City specializing in software and system development. As of September 30~~31, 2024, ~~the~~and ~~Company recorded a full impairment for this investment.~~2023:

The Company accounts for investments with less than 20% of the voting shares and does not have the ability to exercise significant influence over operating and financial policies of the investee using the cost method. The Company elects the measurements alternative and records investment in equity securities at the historical cost in its consolidated financial statements and subsequently records any dividends received from the net accumulated earrings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reduction in the cost of the investments.

	Six Months Ended December 31,
	2024			2023
Balance, beginning of period	$	49,239		$	609,175
Received during the period		41,583,005			18,851,681
Transferred to revenue		(41,500,393	)		(19,403,394	)
Effect of foreign currency translation		3,663			994
Balance, end of period	$	135,514		$	58,456

NOTE 7 – ~~Unearned~~ACCRUED ~~revennue~~EXPENSES AND OTHER PAYABLES

The balance of unearned revenue was $1,312,317 and $49,239 as of September 30, 2024 and June 30, 2024, respectively.

The following presents the roll-forward schedule of unearned revenue for the three months ended September 30, 2024 and 2023:

	Three Months Ended September 30,
	2024			2023
Balance, beginning of period	$	49,239		$	609,175
Received during the period		23,586,381			7,184,708
Transferred to revenue		(22,343,561	)		(7,127,006	)
Effect of foreign currency translation		20,258			(193,816	)
Balance, end of period	$	1,312,317		$	473,061

NOTE 8 – ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:

	September 30, 2024		June 30, 2024
	December 31, 2024		June 30, 2024
Other payables	$	~~187~~72,~~426~~245	$	174,668
Due to third parties		5756,~~742~~289		59,126
Security deposit		15,~~719~~323		15,456
Social security payable		~~293~~286,~~495~~105		288,578
Salary payable – employees		~~137~~69,~~410~~675		58,886
Total	$	~~691~~499,~~792~~637	$	596,714

Due to third parties were the short-term advance from third party individual or companies, bear no interest and payable upon demand.

19 NOTE 8 – LOANS PAYABLE

NOTE 9 – LOANS PAYABLE

Loan from banks

On December 12, 2022, Beijing Shuhai entered a loan agreement with Shenzhen Qianhai WeBank Co., Ltd for the amount of RMB 900,000 ($129,225) with a term of 24 months, the interest rate was 10.728% to be paid every 20th of each month. For the three and six months ended ~~September~~December 3031, 2024, the Company made a repayment of nil and $36,131 to this loan. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded and paid nil and $269 interest expense for this loan. AsOn ofJuly ~~September 30~~15, 2024, the loan was paid in full.

On January 13, 2023, Shenzhen Jingwei entered a loan agreement with Shenzhen Qianhai WeBank Co., Ltd for the amount of RMB 100,000 ($14,552) with a term of 24 months, the interest rate was 8.6832%. For the three and six months ended ~~September~~December 3031, 2024, the Company made a repayment of nil and $4,684 to this loan. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded and paid nil and $37 interest expense for this loan. AsOn ofJuly ~~September 30~~16, 2024, the loan was paid in full.

On April 10, 2024, Guozhong Times entered a loan agreement with Bank of Beijing for the amount of RMB 500,000 ($70,158) with a term of 12 months with a preferential annual interest rate of 3.45% to be paid every 21st of each month. For the three and six months ended ~~September 30~~December 31, 2024, the Company recorded and paid $~~619~~610 and $1,229 interest expense for this loan. As of ~~September~~December 3031, 2024, $7169,~~353~~557 was recorded as current liabilities.

On April 23, 2024, Guozhong Times entered a loan agreement with Beijing Rural Commercial Bank Economic and Technological Development Zone Branch for the amount of RMB 550,000 ($77,173) with a term of 12 months with the annual interest rate of 4.95% to be paid every 21st of each month. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded and paid $961 and $~~978~~1,939 interest expense for this loan. As of ~~September~~December 3031, 2024, $7876,~~488~~512 was recorded as current liabilities.

On April 25, 2024, Shuhai Beijing entered a loan agreement with Industrial Bank Co., Ltd for the amount of RMB 2,000,000 ($280,631) with a term of 12 months with a preferential annual interest rate of 3.88% to be paid every 21st of each month. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded and paid $2,~~786~~741 and $5,527 interest expense for this loan. As of ~~September~~December 3031, 2024, $~~285~~278,~~413~~226 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.

On May 28, 2024, Guozhong Times entered a loan agreement with China Everbright Bank for the amount of RMB 1,000,000 ($140,315) with a term of 12 months with the annual interest rate of 3.4% to be paid every 21st of each month. For the three and six months ended ~~September~~December 3031, 2024, the Company recorded and paid $1,~~221~~201 and $2,422 interest expense for this loan. As of ~~September~~December 3031, 2024, $~~142~~139,~~706~~113 was recorded as current liabilities.

On June 20, 2024, Shuhai Beijing entered a loan agreement with Bank of China for the amount of RMB 4,000,000 ($561,262) with a term of 12 months with a preferential annual interest rate of 2.30% to be paid every 21st of the third months of each quarter. For the three and six months ended ~~September~~ 30December 31, 2024, the Company recorded and paid $3,~~034~~518 and $6,552 interest expense for this loan. As of ~~September~~December 3031, 2024, $~~570~~556,~~826~~452 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.

The following table summarizes the loan balance as of September 30, 2024:

Lender	Loan amount		Borrowing date	Loan term: Months	Interest rate			Outstanding balance
Bank of Beijing		70,158	4/10/2024	12		3.45	%		71,353
Beijing Rural Commercial Bank Economic and Technological Development Zone Branch		77,173	4/23/2024	12		4.95	%		78,488
China Everbright Bank		140,315	5/28/2024	12		3.40	%		142,706
Bank of China		561,262	6/20/2024	12		2.30	%		570,826
Industrial Bank Co., Ltd		280,631	4/25/2024	12		3.88	%		285,413
Total	$	1,269,855						$	1,148,786

NOTE 10 – RELATED PARTY TRANSACTIONS

On October 1, 2020, the Company’s CEO (also the president) entered into an office rental agreement with Xunrui. Pursuant to the agreement, the Company rents an office in Harbin city with a total payment of RMB 163,800 ($24,050) from October 1, 2020 through September 30, 2021. On October 1, 2021, Xunrui entered a new seven-month lease for this location with the Company’s CEO for total rent of RMB 94,500 ($14,690). The lease expired on April 30, 2022. On May 1, 2022, Xunrui entered a new one-year lease agreement for this office with the Company’s CEO for an annual rent of RMB 235,710 ($35,120), the Company was required to pay the rent before April 30, 2023 but the Company did not pay the rent yet which was due on April 30, 2023 as of this report date. On May 1, 2023, Xunrui entered a new one-year lease agreement for this office location with the Company’s CEO for an annual rent of RMB 282,852 ($39,144), the Company is required to pay the rent before April 30, 2024. The Company did not pay the rent yet which was due on April 30, 2024 as of this report date. On May 1, 2024, Xunrui entered a new one-year lease agreement for this office location with the Company’s CEO for an annual rent of RMB 282,852 ($39,657), the Company is required to pay the rent before April 30, 2025. On September 10, 2024, the Company signed a rent reduction agreement with the Company’s CEO, reducing the annual rent for the period from May 1, 2022, to April 30, 2025, to RMB 50,000 ($7,026), The Company is required to pay the rent before April 30, 2025. The rental expense for this office location was $1,756 and $9,963, respectively, for the three months ended September 30, 2024 and 2023.

On September 1, 2022, the Company entered a six-month lease for senior officers’ dormitory in Beijing for a total rent of RMB 91,200 ($13,355), payable every three months in advance. On March 1, 2023, the Company entered a new six-month lease for a total rent of RMB 91,200 ($12,621), payable every three months in advance. On September 1, 2023, the Company entered a new one-year lease for a monthly rent of RMB 12,500 ($1,743), payable every three months in advance. On September 1, 2024, the Company entered a three-month lease for a monthly rent of RMB 12,500 ($1,756), payable in advance. The rental expense for this lease was $5,269 and $5,981 for the three months ended September 30, 2024 and 2023, respectively.

Due to related parties

As of September 30, 2024 and June 30, 2024, the Company had due to related parties of $231,551 and $654,560, respectively. Due to related parties of $231,551 at September 30, 2024, mainly consisted of payable of an office lease to the Company’s CEO, accrued salary payable, and certain expenses of the Company that were paid by the CEO and her father (one of the Company’s directors), bore no interest and payable upon demand. Due to related parties of $654,560 at June 30, 2024, mainly consisted of $500,213 payable of an office lease from the Company’s CEO, accrued salary payable, and certain expenses of the Company that were paid by the CEO and her father (one of the Company’s directors), bore no interest and payable upon demand, and 2) $154,347 loan payable to a related party (who is the shareholder of the Company), with no interest, and can be repaid any time before December 31, 2024.

Subscription receivables - related parties

On September 27, 2024, the Company entered into subscription agreements with three non-U.S. investors, including Zhixin Liu, the Company’s Chairman of the Board, Chief Executive Officer, President and Secretary, and Fu Liu, a Director of the Company, pursuant to which the Company agreed to sell and the investors agreed to purchase an aggregate of 1,932,224 shares of the Company’s common stock, at a purchase price of $2.06 per share, which was equal to the closing price of the common stock on The Nasdaq Capital Market on September 26, 2024. Pursuant to the terms of the subscription agreements, each Investor must pay the purchase price for the number of shares such Investor purchased within 15 days of the effective date. As of September 30, 2024, the Company issued all the shares to three investors, and the purchase price was received in full from each investor as of October 15, 2024, representing gross proceeds in the aggregate amount of approximately $4.0 million. The proceeds raised in the offering will primarily be used to support the Company’s future business operations, including investments in acoustic high-tech related products design upgrade, working capital for mass production and on-line sales, acquiring intellectual property, and working capital for the promotion and sales of 5G AI multimodal digital business products.

~~NOTE~~The 11following –table ~~COMMON~~summarizes ~~STOCK~~the ~~AND~~loan ~~WARRANTS~~balance as of December 31, 2024:

Lender	Loan amount		Borrowing date	Loan term: Months		Interest rate			Outstanding balance
Bank of Beijing		70,158	4/10/2024		12		3.45	%		69,557
Beijing Rural Commercial Bank Economic and Technological Development Zone Branch		77,173	4/23/2024		12		4.95	%		76,512
Industrial Bank Co., Ltd		280,631	4/25/2024		12		3.88	%		278,226
China Everbright Bank		140,315	5/28/2024		12		3.40	%		139,113
Bank of China		561,262	6/20/2024		12		2.30	%		556,452
Total	$	1,269,855							$	1,119,860

NOTE 9 – RELATED PARTY TRANSACTIONS

On October 1, 2020, the Company’s CEO (also the president) entered into an office rental agreement with Xunrui. Pursuant to the agreement, the Company rents an office in Harbin city with a total payment of RMB 163,800 ($24,050) from October 1, 2020 through September 30, 2021. On October 1, 2021, Xunrui entered a new seven-month lease for this location with the Company’s CEO for total rent of RMB 94,500 ($14,690). The lease expired on April 30, 2022. On May 1, 2022, Xunrui entered a new one-year lease agreement for this office with the Company’s CEO for an annual rent of RMB 235,710 ($35,120), the Company was required to pay the rent before April 30, 2023 but the Company did not pay the rent yet which was due on April 30, 2023 as of this report date. On May 1, 2023, Xunrui entered a new one-year lease agreement for this office location with the Company’s CEO for an annual rent of RMB 282,852 ($39,144), the Company is required to pay the rent before April 30, 2024. The Company did not pay the rent yet which was due on April 30, 2024 as of this report date. On May 1, 2024, Xunrui entered a new one-year lease agreement for this office location with the Company’s CEO for an annual rent of RMB 282,852 ($39,657), the Company is required to pay the rent before April 30, 2025. On September 10, 2024, the Company signed a rent reduction agreement with the Company’s CEO, reducing the annual rent for the period from May 1, 2022, to April 30, 2025, to RMB 50,000 ($7,026), The Company is required to pay the rent before April 30, 2025. The rental expense for this office location was $1,747 and $9,792, respectively, for the three months ended December 31, 2024 and 2023. The rental expense for this office location was $3,503 and $19,756, respectively, for the six months ended December 31, 2024 and 2023.

On July 1, 2022, the Company entered a one-year lease for two cars with the Company’s CEO for each car’s monthly rent of RMB 18,000 ($2,636) and RMB 20,000 ($2,876), respectively. On July 1, 2023, the Company entered a new one-year lease for two cars with the Company’s CEO for each car’s monthly rent of RMB 18,000 ($2,491) and RMB 20,000 ($2,768), respectively. On July 1, 2024, the Company entered a new one-year lease for two cars with the Company’s CEO for each car’s monthly rent of RMB 18,000 ($2,524) and RMB 20,000 ($2,804), respectively. The rental expense for those agreements was $15,927 and $15,956, respectively, for the three months ended December 31, 2024 and 2023. The rental expense for those agreements was $31,945 and $31,849, respectively, for the six months ended December 31, 2024 and 2023. On December 10, 2024, the Company’s CEO entered into an agreement with the Company to waive the payment of rental expenses for both vehicles. The Company recorded such waive as shareholder’s capital contribution to the Company because the CEO is also the major shareholder of the Company.

On September 1, 2022, the Company entered a six-month lease for senior officers’ dormitory in Beijing for a total rent of RMB 91,200 ($13,355), payable every three months in advance. On March 1, 2023, the Company entered a new six-month lease for a total rent of RMB 91,200 ($12,621), payable every three months in advance. On September 1, 2023, the Company entered a new one-year lease for a monthly rent of RMB 12,500 ($1,743), payable every three months in advance. On September 1, 2024, the Company entered a three-month lease for a monthly rent of RMB 12,500 ($1,756), payable in advance. The lease was not renewed at maturity. The rental expense for this lease was $3,488 and $5,250 for the three months ended December 31, 2024 and 2023, respectively. The rental expense for this lease was $8,757 and $11,231 for the six months ended December 31, 2024 and 2023, respectively.

Due to related parties

As of December 31, 2024 and June 30, 2024, the Company had due to related parties of $411,619 and $654,560, respectively. Due to related parties of $411,619 at December 31, 2024, mainly consisted of 1) $226,754 loan payable to a related party (who is the shareholder of the Company), with no interest, and can be repaid any time before June 30, 2025, 2) accrued salary payable of $129,375, 3) $18,548 payable of an office lease from the Company’s CEO and 3) $36,941 certain expenses of the Company that were paid by the CEO and her father (one of the Company’s directors), bore no interest and payable upon demand.

Due to related parties of $654,560 at June 30, 2024, mainly consisted of $500,213 payable of an office lease from the Company’s CEO, accrued salary payable, and certain expenses of the Company that were paid by the CEO and her father (one of the Company’s directors), bore no interest and payable upon demand, and 2) $154,347 loan payable to a related party (who is the shareholder of the Company), with no interest, and can be repaid any time before December 31, 2024.

NOTE 10 – COMMON STOCK AND WARRANTS

Shares Issued for Equity Financing

AsOn July ~~of September 30~~2, 2024, the Company ~~issued~~entered 1into a securities purchase agreement,~~932,224~~ pursuant to which the Company agreed to issue and sell to an investor in a registered direct offering 179,400 shares of the Company’s common stock, at a price of $3.25 per share and pre-funded warrants to ~~three~~purchase ~~non~~up to 512,908 shares of Common Stock at a price of $3.24 per share with an exercise price of $0.01 per share (the “Pre-UFunded Warrants”).S The ~~investors~~Pre-Funded ~~including~~Warrants are exercisable upon issuance and will remain exercisable until all the Pre-Funded Warrants are exercised in full. In connection with the Offering, on July 2, 2024, the Company’s ~~CEO~~entered ~~and~~into ~~one~~a placement agency agreement with EF Hutton LLC (the “Placement Agent”). Pursuant to the terms of the placement agency agreement, the Company will pay the placement agent a cash fee of 6.5% of the ~~directors,~~gross proceeds the Company receives in the offering at ~~price~~closing. The Company also agreed to reimburse the Placement Agent at the closing of the Offering, for expenses incurred, including disbursements of its legal counsel, in an amount not to exceed an aggregate of $275,000.06 ~~per~~The ~~share~~closing of the offering occurred on July 3, 2024. The ~~Company~~Pre-Funded ~~received~~Warrants ~~the~~were ~~proceeds~~exercised in full ~~from~~as ~~this~~of December 31, 2024. The gross proceeds of the Offering are approximately $2.25 million before deducting fees to the Company’s placement agent and other offering atexpenses ~~October~~payable 15by the Company, ~~2024~~for which ~~(see~~was ~~Note~~$0.29 million. The Company intends to use the net proceeds from the Offering for research and development, market development ~~10)~~and for general corporate purposes.

On ~~July 2~~September 27, 2024, the Company entered into asubscription ~~securities~~agreements ~~purchase~~with ~~agreement~~three non-U.S. investors, ~~pursuant~~including toZhixin ~~which~~Liu, the Company’s ~~agreed~~Chairman of tothe ~~issue~~Board, ~~and~~Chief ~~sell~~Executive toOfficer, anPresident ~~investor~~and inSecretary, aand ~~registered~~Fu ~~direct offering 179~~Liu,~~400~~ ~~shares~~a Director of the Company~~’s common stock~~, atpursuant ato ~~price~~which ofthe ~~$3.25~~Company ~~per~~agreed to ~~share~~sell and ~~pre-funded~~the ~~warrants~~investors agreed to purchase upan toaggregate ~~512~~of 1,~~908~~ 932,224 shares of ~~Common~~the ~~Stock~~Company’s common stock, at a purchase price of $32.24 06 per share, ~~with~~which anwas ~~exercise~~equal ~~price~~to ~~of $0.01 per share (~~the ~~“Pre-Funded~~closing ~~Warrants”). The Pre-Funded~~price ~~Warrants~~of ~~are exercisable upon issuance and will remain exercisable until all~~ the ~~Pre-Funded~~Common ~~Warrants~~Stock ~~are~~on ~~exercised~~The inNasdaq ~~full. In connection~~Capital ~~with~~Market ~~the Offering,~~ on ~~July~~September 226, ~~2024, the Company entered into a placement agency agreement with EF Hutton LLC (the “Placement~~ ~~Agent”)~~2024. Pursuant to the terms of the ~~placement~~subscription ~~agency agreement~~agreements, ~~the~~each ~~Company~~Investor ~~will~~must pay the ~~placement~~purchase ~~agent~~price afor ~~cash~~the ~~fee~~number of ~~6.5% of~~ ~~the~~shares ~~gross~~such ~~proceeds~~Investor purchased ~~the~~within ~~Company~~15 ~~receives~~days inof the ~~offering~~effective ~~at closing~~date. ~~The~~As ~~Company also agreed to reimburse the Placement Agent at the closing~~ of ~~the~~September ~~Offering~~30, ~~for expenses incurred~~2024, ~~including~~the ~~disbursements~~Company ofissued ~~its~~all ~~legal~~the ~~counsel,~~shares ~~in an amount not~~ to ~~exceed~~three ~~an aggregate of $75~~investors,~~000.~~ ~~The~~and ~~closing of~~ the purchase ~~offering~~price ~~occurred~~was onreceived ~~July~~in 3,full ~~2024.~~from ~~The~~each ~~Pre-Funded~~investor ~~Warrants were exercised in full~~ as of ~~September~~October 3015, 2024~~. The~~, representing gross proceeds ofin the ~~Offering~~aggregate ~~are~~amount of approximately $24.250 million. ~~before~~The ~~deducting~~proceeds ~~fees~~raised in the offering will primarily be used to support the Company’s ~~placement~~future ~~agent and~~business ~~other~~operations, ~~offering~~including ~~expenses~~investments ~~payable~~in byacoustic ~~the~~high-tech ~~Company,~~related ~~for~~products ~~which~~design ~~was~~upgrade, ~~$0.29 million.~~working ~~The~~capital ~~Company~~for ~~intends~~mass toproduction ~~use~~and ~~the~~on-line sales, ~~net~~acquiring ~~proceeds~~intellectual ~~from~~property, ~~the Offering~~and working capital for ~~research~~the promotion and ~~development,~~sales ~~market~~of ~~development~~5G ~~and~~AI ~~for~~multimodal ~~general~~digital ~~corporate~~business ~~purposes~~products.

Shares Issued for Acquiring Intangible Assets from Related Parties

On August 9, 2024, the Company entered into an intellectual property purchase agreement with Ms. Zhixin Liu, the Company’s Chairwoman and CEO, pursuant to which Ms. Zhixin Liu transferred to the Company two intangible assets (software copyrights) owned by her personally. The Committee has decided to grant Zhixin Liu 398,925 restricted shares for the purchase of this software.

On August 9, 2024, the Company entered into an intellectual property purchase agreement with Mr. Fu Liu, the Company’s director of board, pursuant to which Mr. Fu Liu transferred to the Company two intangible assets (software copyrights) owned by himself. The Committee has decided to grant Fu Liu 398,925 restricted shares for the purchase of this software.

The purchase was accounted for at the historical cost of the intangible assets which was $0. Fu Liu is the father of Zhixin Liu, together, they own approximately 43.75% of the Company’s common stock prior to this transaction; and they own 51.29% of the Company’s common stock after this transaction.

Shares to Independent Directors as Compensation

During the three months ended ~~September~~ 30December 31, 2024 and 2023, the Company recorded $4,500 and $4,500 stock compensation expense to independent directors through the issuance of shares of the Company’s common stock at the market price of the stock issuance date, pursuant to the 2018 Equity Incentive Plan. During the six months ended December 31, 2024 and 2023, the Company recorded $9,000 and $9,000 stock compensation expense to independent directors through the issuance of shares of the Company’s common stock at the market price of the stock issuance date, pursuant to the 2018 Equity Incentive Plan.

Shares to Officers as Compensation

On September 24, 2021, under the 2018 Equity Inventive plan, the Company’s Board of Directors granted 1,000 shares of the Company’s common stock to its CEO each month and 667 shares to one of the board members each month starting from July 1, 2021, payable quarterly with the aggregate number of shares for each quarter being issued on the first day of the next quarter at a per share price of the closing price of the day prior to the issuance. On June 12, 2024, the Board of Directors approved that starting from February 1, 2024, the Company agreed to grant 15,000 shares of the Company’s common stock to its CEO each month and 1,000 shares to one of the board members each month, payable quarterly with the aggregate number of shares for each quarter being issued on the first day of the next quarter at a per share price of the closing price of the day prior to the issuance. During the three months ended ~~September~~December 3031, 2024 and 2023, the Company recorded $177,000 and $17,603 stock compensation expense to the Company’s CEO and one of the board members. During the six months ended December 31, 2024 and 2023, the Company recorded $~~370~~547,500 and $1533,~~600~~203 stock compensation expense to the Company’s CEO and one of the board members.

22 NOTE 11 – INCOME TAXES

NOTE 12 – INCOME TAXES

The Company is subject to income taxes by entity on income arising in or derived from the tax jurisdiction in which each entity is domiciled. The Company’s PRC subsidiaries file their income tax returns online with PRC tax authorities. The Company conducts all of its businesses through its subsidiaries and affiliated entities, principally in the PRC.

The Company’s U.S. parent company is subject to U.S. income tax rate of 21% and files U.S. federal income tax return. As of ~~September~~December 3031, 2024 and June 30, 2024, the U.S. entity had net operating loss (“NOL”) carry forwards for income tax purposes of $6.0945 million and $5.60 million. The NOL arising in tax years beginning after 2017 may reduce 80% of a taxpayer’s taxable income, and be carried forward indefinitely. However, the Coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) passed in March 2020, provides tax relief to both corporate and noncorporate taxpayers by adding a five-year carryback period and temporarily repealing the 80% limitation for NOLs arising in 2018, 2019 and 2020. Management believes the realization of benefits from these losses remains uncertain due to the parent Company’s limited operating history and continuing losses. Accordingly, a 100% deferred tax asset valuation allowance was provided.

The Company’s offshore subsidiary, Shuhai Skill (HK), a HK holding company is subject to 16.5% corporate income tax in HK. Shuhai Beijing received a tax holiday with a 15% corporate income tax rate since it qualified as a high-tech company. Tianjin Information, Xunrui, Guozhong Times, Guozhong Haoze, Guohao Century, Jingwei, Shuhai Nanjing are subject to the regular 25% PRC income tax rate.

As of ~~September~~December 3031, 2024 and June 30, 2024, the Company has approximately $18.4969 million and $17.86 million of NOL from its HK holding company, PRC subsidiaries and VIEs that expire in calendar years 2021 through 2025. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends upon the Company’s future generation of taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance as of ~~September~~December 3031, 2024 and June 30, 2024.

~~The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the three months ended September 30, 2024 and 2023:~~24

	2024			2023
US federal statutory rates		(21.0	)%		(21.0	)%
Tax rate difference – current provision		(2.8	)%		(2.1	)%
Permanent difference		4.0	%		-	%
Effect of PRC tax holiday		(2.3	)%		2.7	%
Valuation allowance		22.1	%		20.4	%
Effective tax rate		-	%		-	%

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the three months ended December 31, 2024 and 2023:

The Company’s net deferred tax assets as of September 30, 2024 and June 30, 2024 is as follows:

	2024			2023
US federal statutory rates		(21.0	)%		(21.0	)%
Tax rate difference – current provision		(2.4	)%		(3.5	)%
Permanent difference		3.3	%		-	%
Effect of PRC tax holiday		2.9	%		2.0	%
Valuation allowance		17.2	%		22.5	%
Effective tax rate		-	%		-	%

	September 30, 2024			June 30, 2024
Deferred tax asset
Net operating loss	$	5,093,962		$	4,777,372
R&D expense		123,750			123,750
Depreciation and amortization		99,590			81,079
Bad debt expense		115,219			116,718
Social security and insurance accrual		56,467			56,343
Inventory impairment		13,431			13,402
ROU, net of lease liabilities		(2,570	)		(951	)
Total		5,499,849			5,167,713
Less: valuation allowance		(5,499,849	)		(5,167,713	)
Net deferred tax asset	$	-		$	-

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the six months ended December 31, 2024 and 2023:

	2024			2023
US federal statutory rates		(21.0	)%		(21.0	)%
Tax rate difference – current provision		(2.7	)%		(3.0	)%
Permanent difference		3.7	%		-	%
Effect of PRC tax holiday		(0.4	)%		2.2	%
Valuation allowance		20.4	%		21.8	%
Effective tax rate		-	%		-	%

~~NOTE~~The 13Company’s ~~– COMMITMENTS~~net deferred tax assets as of December 31, 2024 and June 30, 2024 is as follows:

	December 31, 2024			June 30, 2024
Deferred tax asset
Net operating loss	$	5,201,557		$	4,777,372
R&D expense		123,750			123,750
Depreciation and amortization		147,645			81,079
Bad debt expense		114,888			116,718
Social security and insurance accrual		56,306			56,343
Inventory impairment		13,393			13,402
ROU, net of lease liabilities		(1,692	)		(951	)
Total		5,655,847			5,167,713
Less: valuation allowance		(5,655,847	)		(5,167,713	)
Net deferred tax asset	$	-		$	-

NOTE 12 – COMMITMENTS

Leases

On July 30, 2019, the Company entered into an operating lease for its office in Beijing. Pursuant to the lease, the delivery date of the property was August 8, 2019 but the lease term started on October 8, 2019 and expires on October 7, 2022, and has a monthly rent of RMB 207,269 without value added tax (“VAT”) (or $29,250). The lease required a security deposit of three months’ rent of RMB 677,769 (or $96,000). The Company received a six-month rent abatement, which was considered in calculating the present value of the lease payments to determine the ROU asset which is being amortized over the term of the lease. On October 8, 2022, the Company renewed this lease for another year but for half space of the previous lease, with a monthly rent of RMB 107,714 ($15,787). The Company received a one-month rent abatement. The lease expired at maturity without renewal.

On November 8, 2023, Shuhai Beijing entered into a new lease agreement for its office in Beijing. Pursuant to the agreement, the agreement commenced on November 8, 2023 and will expire on December 7, 2024, and has a monthly rent of RMB 17,358 (or $2,425). The deposit was RMB 56,762 (or $7,929). The Company received a one-month rent abatement.

On November 8, 2023, Tianjin information entered into a lease agreement for its office in Beijing. Pursuant to the agreement, the agreement commenced on November 8, 2023 and will expire on December 7, 2024, and has a monthly rent of RMB 60,195 (or $8,409). The deposit was RMB 196,838 (or $27,496). The Company received a one-month rent abatement.

In August 2020, the Company entered into a lease for an office in Shenzhen City, China for three years from August 8, 2020 through August 7, 2023, with a monthly rent of RMB 209,911 ($29,651) for the first year. The rent will increase by 3% each year starting from the second year. The lease expired at maturity without renewal.

On August 26, 2020, Tianjin Information entered into a lease for the office in Hangzhou City, China from September 11, 2020 to October 5, 2022. The first year rent is RMB 1,383,970 ($207,000). The second-year rent is RMB 1,425,909 ($202,800). The security deposit is RMB 115,311 ($16,400). The total rent for the lease period is to be paid in four installments. On October 6, 2022, Hangzhou took over and renewed this lease for one year, the total rent is RMB 1,178,463 ($172,575), payable every six months in advance. In May 2023, the lease was terminated. The total rent expense was RMB 848,620 ($122,253) for the year ended June 30, 2023.

On May 10, 2023, Guo Hao Century entered into a lease for the office in Hangzhou City, China from May 10, 2023 to May 9, 2025. The security deposit is RMB 115,311 ($7,670). The quarterly rent is as follows:

Start Date	End Date	Rent expense
		RMB		USD
5/10/2023	8/9/2023		43,786	$	6,060
8/10/2023	11/9/2023		66,038		9,139
11/10/2023	2/9/2024		66,038		9,139
2/10/2024	5/9/2024		64,602		8,940
5/10/2024	8/9/2024		66,038		9,139
8/10/2024	11/9/2024		66,038		9,139
11/10/2024	2/9/2025		66,038		9,139
2/10/2025	5/9/2025		63,884	$	8,841

On September 30, 2023, the lease was early terminated due to the management’s decision of transferring operations in Hangzhou to Beijing headquarter office for maximizing the efficiency and cost saving.

On August 16, 2024, Shenzhen Jingwei entered into a lease agreement for its office in Shenzhen. Pursuant to the agreement, the lease commenced on August 16, 2024 with expiration on August 15, 2027, and has a monthly rent of RMB 48,238 (or $6,778). The deposit was RMB 239,068 (or $33,592). The Company received a five-month rent abatement.

On November 29, 2024, Shuhai Information entered into a lease agreement for an office in Beijing City, China from March 1, 2025 to February 29, 2028, with a monthly rent of RMB 24,965 ($3,498), payable every three months in advance. For the first three months, the Company received a rent discount and only needs to pay RMB 37,447 ($3,498) rent expense. The security deposit is RMB 161,758 ($22,503).

In December 10, 2024, the Company entered into a lease agreement for an office in Beijing City, China for 15 months from December 10, 2024 through March 10, 2026, with a monthly rent of RMB 7,000 ($981), payable every three months in advance. The security deposit is RMB 7,000 ($981).

The Company adopted FASB ASC Topic 842 on July 1, 2019. The components of lease costs, lease term and discount rate with respect of the Company’s office lease and the senior officers’ dormitory lease with an initial term of more than 12 months are as follows:

	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023
	Three Months Ended December 31, 2024		Three Months Ended December 31, 2023
Operating lease expense	$	38,~~932~~388	$	7433,~~181~~174

	September 30, 2024			June 30, 2024
	Six Months Ended December 31, 2024			Six Months Ended December 31, 2023
Right-of-use assets	$	212,740		$	49,345
Operating lease expense	$	77,320		$	107,355
Lease liabilities - current		90,794			53,530
Lease liabilities - noncurrent		132,541			-
Weighted average remaining lease term		2.53 years			0.36 years
Weighted average discount rate		3.85% - 6.75	%		6.25	%

The following is a schedule, by years, of maturities of the operating lease liabilities as of September 30, 2024:

	December 31, 2024		June 30, 2024
Right-of-use assets	$	185,494	$	49,345
Lease liabilities - current		79,308		53,530
Lease liabilities - noncurrent		116,820		-
Weighted average remaining lease term		2.46 years		0.36 years
Weighted average discount rate		3.60% - 6.75%		6.25	%

12 Months Ending September 30,	Minimum Lease Payment
2025	$	90,973
2026		75,723
2027		68,839
Total undiscounted cash flows		235,535
Less: imputed interest		12,200
Present value of lease liabilities	$	223,335

The following is a schedule, by years, of maturities of the operating lease liabilities as of December 31, 2024:

NOTE 14 – SUBSEQUENT EVENTS

12 Months Ending December 31,	Minimum Lease Payment
2025	$	79,308
2026		73,816
2027		46,973
Total undiscounted cash flows		200,097
Less: imputed interest		3,969
Present value of lease liabilities	$	196,128

NOTE 13 – SUBSEQUENT EVENTS

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company had the following subsequent events that need to be disclosed.

InOn ~~September~~January 276, ~~2024~~2025, the ~~Company~~Board ~~issued~~of 1Directors approved to grant 325,~~932,224~~000 shares of the Company’s common stock to ~~three~~five non-~~U.S~~affiliate ~~investors~~individual consultants ~~including~~under the ~~Company’s~~ ~~CEO~~2018 ~~and~~Equity ~~one~~Incentive ofPlan. ~~the~~On ~~directors~~January 9, at2025, ~~price~~the ofCompany ~~$2.06~~issued ~~per~~325,000 ~~share.~~shares ~~The~~to ~~Company~~these ~~received~~individual consultants, the ~~proceeds~~fair invalue ~~full~~ of ~~this~~325,000 ~~offering on~~shares ~~October~~was 15$737, ~~2024~~750.

On October 14, 2024, Tianjin Information and Hangzhou Liuhuan Technology Co., Ltd. entered into a patent transfer agreement. According to the terms of the agreement, Hangzhou Liuhuan Technology Co., Ltd. will transfer ownership of two patents to Tianjin Information including:27

~~1) Patent No~~ITEM 2. ~~201810008029.2,~~MANAGEMENT’S anDISCUSSION ~~audio~~AND ~~playback~~ANALYSIS ~~system~~OF ~~based~~FINANCIAL onCONDITION ~~voltage~~AND ~~following,~~RESULTS ~~with~~OF ~~a transfer price of RMB 14.9 million (approximately $2.13 million).~~OPERATIONS

2)Cautionary Note ~~Patent~~Regarding ~~No. 202210061012.X, a B~~Forward-~~ultrasound~~Looking ~~image detection method and B-ultrasound scanner, with a transfer price of RMB 14.3 million (approximately $2.04 million).~~Statements

AsThis report contains forward-looking statements within the meaning of Section 27A of the ~~reported~~Securities ~~date~~Act and Section 21E of the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue, or other financial items; any statements of the plans, ~~Company~~strategies, ~~has~~and ~~made~~objectives aof ~~full~~management ~~payment~~for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of $4performance; and statements of belief; and any statements of assumptions underlying any of the foregoing.17 ~~million~~Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements.

In some ~~October~~cases, you can identify forward-looking statements by terms such as “may,” “intend,” “might,” ~~2024~~“will,” ~~the~~“should,” ~~company~~“could,” ~~received~~“would,” ~~approximately~~“expect,” ~~RMB~~“believe,” 71“anticipate,” “estimate,” “predict,” “potential,” or the negative of these terms.26 ~~million~~These ~~(equivalent~~terms and similar expressions are intended to ~~$10~~identify forward-looking statements.17 ~~million)~~The ~~cash~~forward-looking ~~prepayments~~statements ~~from~~in ~~the~~this ~~Company'~~report are based upon management’s ~~several~~current ~~customers~~expectations, which it believes are reasonable. However, we cannot assess the impact of 5Geach AIfactor ~~multimodal~~on ~~digital~~our business or the extent to which any factor or combination of factors, or factors we are aware of, may cause actual results to differ materially from those contained in any forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. These statements represent our estimates and assumptions only as of the date of this report. Except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

25 You should be aware that our actual results could differ materially from those contained in the forward-looking statements due to several factors, including:

~~ITEM~~● 2.uncertainties ~~MANAGEMENT’S~~relating ~~DISCUSSION~~to ~~AND~~our ~~ANALYSIS~~ability OFto ~~FINANCIAL~~establish ~~CONDITION~~and ~~AND~~operate ~~RESULTS~~our OFbusiness ~~OPERATIONS~~and generate revenue;

~~Cautionary Note~~● ~~Regarding~~uncertainties ~~Forward-Looking~~relating ~~Statements~~ to general economic, political, and business conditions in China;

~~This report~~● ~~contains~~industry ~~forward-looking~~trends ~~statements within the meaning of Section 27A of the Securities Act~~ and ~~Section~~changes ~~21E~~in ofdemand ~~the Exchange Act. All statements other than statements of historical fact are “forward-looking statements”~~ for ~~purposes~~our ofproducts ~~federal~~ and state securities laws, including, but not limited to, any projections of earnings, revenue, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements.service；

~~In some~~● ~~cases,~~uncertainties ~~you~~relating ~~can~~to ~~identify~~customer ~~forward-looking~~plans ~~statements~~and bycommitments terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “expect,” “believe,” “anticipate,” “estimate,” “predict,” “potential,” or the negative of these terms. These terms and similar expressions are intended to identify forward-looking statements. The forward-looking statements in this report are based upon management’s current expectations, which it believes are reasonable. However, we cannot assess the ~~impact~~timing of ~~each~~orders ~~factor~~received ~~on our business or the extent to which any factor or combination of factors, or factors we are aware of, may cause actual results to differ materially~~ from those contained in any forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. These statements represent our estimates and assumptions only as of the date of this report. Except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.customers;

~~You should~~● beannouncements ~~aware~~or ~~that~~changes in our ~~actual~~advertising ~~results~~model ~~could~~and ~~differ~~related ~~materially~~pricing ~~from~~policies ~~those~~or ~~contained~~that inof ~~the~~our ~~forward-looking statements due to several factors, including:~~competitors;

● ~~uncertainties~~unanticipated ~~relating~~delays toin ~~our~~the ~~ability~~development, tomarket ~~establish~~acceptance, ~~and~~or ~~operate~~installation of our ~~business~~products and ~~generate revenue~~services;

● ~~uncertainties~~changes ~~relating~~in toChinese ~~general~~government ~~economic,~~regulations; ~~political,~~ and ~~business conditions in China;~~

● ~~industry~~availability, ~~trends~~terms and ~~changes~~deployment inof ~~demand~~capital, ~~for~~relationships ~~our~~with ~~products~~third-party ~~and~~equipment ~~service；~~suppliers

~~● uncertainties relating to customer plans and commitments and the timing of orders received from customers;~~Overview

~~● announcements or changes in our advertising model and related pricing policies or that of our competitors;~~Company Structure

●Datasea ~~unanticipated~~Inc. ~~delays~~is a technology company incorporated in ~~the~~Nevada, ~~development~~USA, ~~market~~on ~~acceptance~~September 26, or2014. ~~installation~~The Company went public on the NASDAQ in December 2028, under the symbol of DTSS. Datasea is not a Chinese operating company but a Nevada-based holding company with its Delaware subsidiary, Datasea Acoustics LLC, serving as our ~~products~~U.S.-based international business platform. Additionally, through the Company’s subsidiary in China – Tianjin Information Sea Information Technology Co., Ltd and ~~services;~~the VIE, Shuhai Information Technology Co., Ltd. (“Shuhai Beijing”), we carry out business activities in China, along with their subsidiary entities.

~~● changes in Chinese government regulations; and~~28

●Datasea is ~~availability,~~dedicated ~~terms~~to providing advanced acoustic high-tech technologies and ~~deployment~~products, ofas ~~capital~~well as 5G+ Artificial Intelligence (“AI”) multimodal digital innovation technologies and products, ~~relationships~~offering ~~with~~market ~~third-party~~services ~~equipment~~to ~~suppliers~~various corporate and individual customers.

26 For the six-month period from July 1, 2024, to December 31, 2024, our revenue reached $41.54 million, reflecting a 127.86% increase compared to the same period in 2023. This revenue growth was primarily driven by the rapid expansion of our 5G+AI multimodal digital business in China, with the Company maintaining a leading position in the 5G+AI digital business sector. The continued stable service to existing customers and the ongoing growth of new customer acquisitions have been crucial in supporting this significant business growth.

~~Overview~~ Our Business Summary

~~Company~~Acoustics ~~Structure~~high tech Segment:

~~Datasea~~We ~~Inc.~~deeply isunderstand athe ~~technology~~market’s ~~company~~demand ~~incorporated~~for innew ~~Nevada,~~application ~~USA~~areas, ~~on September 26~~technologies, ~~2014, with subsidiaries~~ and ~~operating~~requirements. ~~entities located in Delaware~~Therefore, ~~US,~~ ~~and~~through ~~China.~~the ~~The company provides acoustic business services (focusing on high-tech acoustic technologies and applications such as ultrasound,~~relentless ~~infrasound,~~efforts ~~and~~of ~~Schumann~~our ~~resonance)~~team, 5Gwe ~~application~~have ~~services~~achieved ~~(5G~~leading-edge AIadvancements ~~multimodal~~in ~~digital~~acoustic ~~business),~~understanding and ~~other products and services to various corporate and individual customers~~algorithms.

InI. ~~the~~Overview ~~acoustic business sector, Datasea is a global pioneer~~ of the “acoustic effect” concept. Utilizing global leading “Acoustics + AI” precision manufacturing as the digital application framework, and leveraging sound wave technologies combined with acoustic effects as the technological system, the company outputs acoustic high-tech products and solutions worldwide. Datasea strives to be a leader in the development of ChinaCompany’s Acoustic high-tech precision manufacturing in the acoustic industry. Our products have wide-ranging applications across various industries and sectors, including acoustic agriculture, acoustic industry, acoustic medicine, acoustic health, and acoustic IoT technologies. In the 5G application sector, Datasea provides digital and intelligent services to enterprises and individual users in China, leveraging AI, machine learning, and data analytic capabilities to offer a wide range of 5G application products and solutions.Business

~~For~~Datasea, as one of the ~~three~~global ~~months~~pioneers ~~ending September~~of ~~30,~~the ~~2024~~“acoustic effect” concept, ~~our~~is ~~revenue~~dedicated ~~was~~to ~~$21~~deeply integrating acoustic technology,~~081~~ 5G digital technology,~~094~~ and Artificial Intelligence, ~~reflecting~~driving athe ~~206.4%~~application ~~increase~~of ~~compared~~acoustic totechnology ~~the~~and ~~same~~5G ~~period~~digitalization inacross ~~2023~~various industries. ~~This~~Through ~~revenue~~precision ~~growth is~~acoustic ~~primarily~~manufacturing ~~due~~and totechnological innovation, the ~~rapid~~Company ~~expansion~~leverages the core technology framework of ~~our~~Acoustic 5G+ AI ~~multimodal~~to ~~communication~~provide ~~business~~globally incompetitive ~~China,~~high-tech ~~with~~acoustic ~~the~~products ~~company’s~~and 5Gsolutions, AIstriving ~~digital business~~to ~~maintaining~~build aan industry-leading ~~position~~technology system in the acoustic field and promote the intelligence and digitalization process of the global acoustic industry. ~~Our~~Datasea’s goal ~~growing~~is ~~customer~~not ~~base~~only ~~continues~~to advance the development of acoustic technology but also to ~~support~~expand ~~substantial~~its ~~business~~applications ~~growth~~into key industries such as agriculture, industry, healthcare, and others, achieving cross-industry technological penetration and industrial upgrades.

~~Datasea~~Acoustic High-Tech is ~~not~~ a ~~Chinese~~new ~~operating~~field ~~company~~that ~~but~~integrates afundamental ~~Nevada-based~~acoustic ~~holding~~theory ~~company~~ with ~~its~~artificial ~~Delaware~~intelligence ~~subsidiary,~~to ~~Datasea~~collect Acoustics LLC, serving as our U.S.-based international business platform. Additionally, through the Company’s subsidiary in China – Tianjin Information Sea Information Technology Co., Ltd (“Shuhai Tianjin”) and ~~the~~process ~~VIE, Shuhai Information Technology Co., Ltd. (“Shuhai~~acoustic ~~Beijing”),~~data ~~we carry out business activities in China, along with their subsidiary entities. Shuhai Beijing possesses cutting-edge products~~ and ~~solutions~~address invarious ~~acoustics high tech and 5G AI multimodal digital applications to support commercial enterprises, households and individuals in China~~challenges.

~~The~~Acoustic + ~~company~~AI, ~~has~~as ~~two~~an ~~core businesses:~~emerging interdisciplinary technology field, aims to use acoustic ~~high-tech~~technology to form products ~~and~~with ~~solutions~~AI intelligent processing, addressing ~~and~~the 5Gcomplex ~~and~~challenges AIfaced ~~multimodal~~by ~~digital~~various ~~applications,~~industries. ~~providing~~Datasea’s ~~support~~technological ~~for~~breakthroughs ~~commercial~~in this field combine basic ~~enterprises,~~acoustic ~~households,~~theory with artificial intelligence to create a powerful technology system centered around the study and ~~individuals~~application of non-audible mechanical wave effects. This not only advances the scientific boundaries of acoustic technology but also bridges the gap between theory and practice in ~~China~~industrial applications.

~~Datasea~~The Company is ~~one~~focusing ofon ~~the~~five ~~global~~key ~~initiators~~application ofareas: ~~the~~acoustic ~~concept~~industry, ~~of “~~acoustic ~~high-tech.”~~agriculture, Byacoustic ~~leveraging~~healthcare, ~~cutting-edge “~~acoustic ~~+ AI”~~health, ~~precision~~and ~~manufacturing~~acoustic ~~for~~IoT ~~digital~~technologies. ~~applications~~Through ~~and~~in-depth ~~integrating~~cooperation ~~acoustic technology~~ with ~~digital~~leading ~~electronics,~~academic weinstitutions ~~aim~~and toresearch ~~deliver~~centers ~~advanced~~both ~~acoustic~~domestically ~~high-tech products~~ and ~~solutions worldwide~~internationally, ~~positioning~~Datasea ~~ourselves~~continues asto adrive ~~leader~~innovation ~~and pioneer~~ in ~~China’s high-tech precision manufacturing within the~~ acoustic ~~industry.The~~technology ~~development~~ and ~~internationalization~~its ~~of acoustic products~~industrialization, ~~including~~aiming ~~acoustic industry,~~to ~~acoustic~~become ~~agriculture, acoustic medicine, and acoustic health, have always been~~ a ~~crucial~~global ~~strategy~~leader ~~for~~in the ~~Company~~acoustic high-tech field.

27 ● Acoustic Agriculture Applications

On● ~~the~~Acoustic ~~other~~Industry hand, Datasea continues to invest in the research and application of 5G AI multimodal digital technology, aiming to provide customers with cutting-edge intelligent solutions. As a pioneer in China’s 5G multimodal digital field, Datasea deeply integrates the high-speed, low-latency capabilities of 5G networks with AI and big data processing technologies to create a comprehensive AI multimodal digital platform spanning multiple industries. Datasea’s AI multimodal digital products and solutions are widely applied in areas such as rural revitalization, healthcare, and logistics, helping over 48.42 million enterprises and households in China (with over 99% being small and medium-sized enterprises) by providing digital and intelligent services, driving industrial upgrades and fostering innovative development.Applications

~~The development~~● ~~and~~Acoustic ~~internationalization~~Healthcare of acoustic products, including acoustic industry, acoustic agriculture, acoustic medicine, and acoustic health, have always been a crucial strategy for the Company. Following the establishment of its wholly-owned subsidiary, Datasea Acoustics LLC, in Delaware in July 2023, the Company has actively implemented its global strategy. As of the date of this report, the Company has partnered with several well-known U.S. online retailers and local smart product distributors to expand the online and physical store distribution of its acoustic-related products in the U.S. Additionally, in collaboration with the renowned U.S. intellectual property firm Paul & Paul, we are actively pursuing patent applications and acquiring high-quality patents to build a strong international intellectual property portfolio. Focusing on the core area of acoustic high-tech, we are seeking potential merger and acquisition targets in acoustic industry applications, acoustic agriculture, acoustic medical aesthetics, acoustic health, and acoustic IoT technologies. This is part of our strategy for international expansion through mergers and acquisitions.Applications

~~Technology~~● ~~and~~Acoustic ~~Innovation~~Health Applications

~~The company~~● ~~focuses~~Acoustic onIoT the acoustic high-tech industry, particularly in the research of ultrasound, infrasound, and Schumann resonance technologies. By analyzing and introducing new industry segments within acoustic high-tech, we drive the development and application of these technologies, including in-depth research on non-audible mechanical wave effects, which distinguishes us from others in the field. We combine acoustic chemistry, mechanical transduction, and vibrational dynamics with artificial intelligence (AI), large language models, and data analytics. Our acoustic high-tech products and 5G AI multimodal communication solutions serve over 48.42 million enterprises (with over 99% being small and medium-sized enterprises) and households in China.Technology

Datasea,’s ~~rooted~~acoustic inbusiness ~~the~~is ~~acoustic~~not ~~intelligence~~only ~~industry,~~an isinnovation ~~advancing~~of ~~rapidly~~traditional inacoustic ~~terms~~technology but ofalso ~~technological~~a ~~innovation,~~reshaping ~~product~~of ~~creation,~~the ~~and~~global high-tech industry ~~application~~ landscape. ~~The~~Through ~~company~~close ~~emphasizes~~collaboration ~~deep~~with top domestic and international ~~collaboration~~academic institutions and ~~fosters~~research ~~the integration of industry~~centers, ~~academia,~~ and ~~research.~~ ~~Focusing~~by ondeeply ~~the~~integrating ~~acoustic~~Acoustic ~~intelligence~~+ ~~industry~~AI, wethe ~~have~~Company ~~established~~is ~~five~~providing ~~key~~new ~~segments~~technological insolutions ~~the~~for agriculture, ~~acoustic~~industry, ~~sector~~healthcare, ~~leading~~and ~~the~~health sectors, improving industry ~~forward~~ efficiency and ~~providing~~sustainability, ~~cutting-edge~~and ~~acoustic~~creating ~~intelligence~~higher ~~technologies~~ commercial and ~~products~~social value for global customers.

The Company holds an outstanding position in the field of acoustics, particularly in areas such as ultrasound, infrasound, and directional sound. To promote research and innovation in these areas, the Company actively collaborates with several prominent research institutions and universities, including Chinese Academy of Sciences Institute of Acoustics, China Academy of Information and Communications Technology Cloud Computing and Big Data Research Institute, Tsinghua University Internet Industry Research Institute, Harbin Institute of Technology Artificial Intelligence Research Institute, Beijing Union University, and Jilin University Remote Sensing Research Institute. The Company, together with these partners, is dedicated to conducting research on new topics and developing novel technology applications to drive advancements in the field of acoustics. To better achieve this goal, the Company collaborated for oint laboratories to enhance the integration and collaboration of research resources. These collaborations and the establishment of these laboratories further solidify the Company’s leading position in the field of acoustics, providing a strong foundation for future innovations and development.29

28 II. Acoustic Technology and Products

~~China’s First White Paper on High-Tech Acoustic Industry~~1.~~Additionally,~~ ~~the company has jointly released China’s first white paper on the~~Acoustic ~~high-tech acoustic industry with the Ministry of Industry and Information~~ Technology, the Key Laboratory for Artificial Intelligence Technologies and Applications Evaluation, and the Cloud Computing and Big Data Research Institute of the China Academy of Information and Communications Technology. This white paper provides a comprehensive analysis and authoritative presentation of acoustic technology, its commercialization, and industry prospects. It discusses in detail the application of high-tech acoustics in various sectors, showcases Datasea’s proactive initiatives in leading industry development, and highlights the company’s leading position in the high-tech acoustic field both in China and globally. The white paper not only demonstrates Datasea’s pioneering role in setting industry standards but also further consolidates the company’s strategic importance in advancing acoustic technology on both a national and global scale.Innovation

~~Our~~Datasea focuses ~~Business~~on ~~Summary~~the development of various acoustic technologies, including research and application of high-tech acoustic technologies such as ultrasound, infrasound, and Schumann resonance. By integrating the latest research results from the fields of acoustics, mechanical energy conversion, and vibrational dynamics, and combining artificial intelligence (AI) with acoustic high-tech products, the Company has developed a highly competitive technological combination. In particular, Datasea has demonstrated its unique technological advantages in the study and application of non-audible mechanical wave effects.

~~Acoustics~~In ~~high~~the ~~tech~~field ~~Segment:~~of ultrasound technology, we utilize the cavitation effect, thermal effect, and mechanical effect of ultrasound to meet various application needs, including environmental disinfection and sterilization, crop pest control, photosynthetic absorption, seed treatment, water purification safety monitoring, skincare, and healthcare. For example, in ultrasound disinfection applications, when ultrasound stimulates microorganisms (including viruses like the coronavirus), it causes significant vibrational strain, disrupting the outer shell and internal RNA of the virus. Ultimately, through a combination of mechanical disruption, cavitation effects, and advanced oxidation processes, pathogenic microorganisms are eliminated. This method offers a broad-spectrum, non-selective environmental disinfection and air purification alternative, potentially replacing the use of antibiotics.

~~We deeply understand the market’s demand for new application areas, technologies, and requirements~~2. ~~Therefore, through the relentless~~Acoustic ~~efforts~~Product of our team, we have achieved leading-edge advancements in acoustic understanding and algorithms. Our company’s acoustic technologies and products are widely applied across various industries and fields, including acoustic industrial applications, acoustic agriculture, acoustic medicine, acoustic health, and acoustic IoT technologies.Series

~~Acoustic~~Based ~~High-Tech is~~on athe ~~new~~combination ~~field~~of ~~that integrates fundamental~~ acoustic ~~theory~~technology ~~with~~and artificial intelligence, ~~to collect and process acoustic data and address various challenges.~~ Datasea ~~utilizes~~has ~~advanced~~successfully ~~technologies~~developed ~~in this domain, combining basic acoustic theories with AI to create~~ a ~~robust~~series ~~technology system centered around the effects~~ of ~~research~~innovative ~~and application of non-audible mechanical wave effects. This includes leveraging ultrasonic technology for sterilization~~products, ~~which effectively combats viruses and prevents infections. The technology~~ ~~exploits the mechanical, thermal, and cavitation effects of ultrasound. When microorganisms,~~ including viruses like the coronavirus, are exposed to ultrasound, they experience intense vibrational strains that disrupt their outer shells and internal RNA. The rapid movement of protons caused by the ultrasound ultimately destroys microbial structures, eliminating harmful pathogens.:

~~Especially in~~● ~~the~~Acoustic ~~field~~Health ofProducts: ~~ultrasonic~~Ultrasonic ~~technology~~disinfectants, weacoustic ~~utilize~~sterilizing ~~the cavitation~~cleaners, ~~thermal,~~ultrasonic ~~and~~skin ~~mechanical~~repair ~~effects of ultrasound to address various application needs~~devices, ~~including~~widely ~~disinfection,~~applied ~~sterilization, crop drying, safety monitoring, skincare, and medical wellness. For example,~~ in ~~the field of ultrasonic disinfection~~hospitals, ~~when ultrasound stimulates microorganisms (including coronaviruses)~~airports, ~~it causes significant vibrational strain~~hotels, ~~disrupting~~ ~~the virus’s outer shell and internal RNA. Ultimately~~transportation, ~~through a combination of mechanical destruction, cavitation effects,~~ and ~~advanced~~other ~~oxidative processes, pathogenic microorganisms are eliminated~~sectors. ~~This method provides a broad-spectrum, non-selective disinfection alternative to antibiotics.~~

29 ● Acoustic Health: The “Xingmei” brand non-contact sleep aid device, using low-frequency and brainwave magnetic induction technology to improve deep sleep quality.

~~Leveraging Datasea’s~~● ~~cutting-edge~~Acoustic ~~acoustic~~Medicine: ~~high-tech combined with~~ AI ~~technology,~~medical ~~we have successfully developed a series of ultrasonic disinfection products. These include the acoustic health series ultrasonic disinfectors~~robots, ~~ultrasonic~~ ~~sterilizers and purifiers for restrooms, bedrooms, living rooms, kitchens, and pets, as well as innovative non-contact~~ ultrasonic ~~skin~~wrinkle ~~repair~~removal devices~~. These products are suitable for environments such as hospitals~~, ~~airports, hotels, transportation, and residential settings. Leading laboratories, including the Wuhan Institute of Virology, have proven that this~~ ultrasonic ~~disinfection~~fat ~~technology~~reduction ~~achieves 99.83% efficacy against Covid-19 within nine seconds~~ and ~~99.99%~~body ~~efficacy~~shaping ~~against Staphylococcus Albus and E. coli. This strategic shift aims to offer more effective environmental purification solutions and healthier lifestyles~~devices, serving ~~China,~~ the ~~United~~medical ~~States,~~aesthetics ~~and globally, particularly in the post-pandemic era when there is a higher demand for protection and quality of life~~industry.

~~Recent~~3. New ~~Development~~Products in Acoustic Technology Planning

~~Our Acoustic~~● ~~Products~~Short-Term Plan (Expected to be launched in 2025): Around environmental acoustic technology applications and cardio-brain acoustic technology applications, including：

~~As of~~● ~~the~~Pet ~~end~~Disinfection ofand ~~the~~Deodorizing ~~three~~Purifier: ~~months~~Utilizes onultrasonic ~~September~~technology ~~30,~~to ~~2024,~~eliminate ~~the~~pet ~~company~~environment ~~has~~odors ~~developed~~and aprovide ~~range~~strong ~~of products, including intelligent sonic~~ air ~~purifiers, ultrasonic sterilization and~~ disinfection ~~devices~~, ~~and~~suitable ~~the Sleep Guardian~~ for ~~health~~households ~~improvement. These products offer a healthier living experience through efficient, safe,~~ and ~~eco~~pet-~~friendly~~related ~~methods~~facilities.

~~The~~● ~~company~~Mechanical ~~continues~~Wave ~~to intensify~~Brain ~~market~~Tissue ~~promotion~~Cortisol ~~for~~Level ~~its~~Regulation ~~acoustic~~Device: ~~business,~~Uses ~~with its “Datasea Sky Ear” brand leveraging unique ultrasonic and Schumann wave technologies. By utilizing~~ sound wave ~~properties,~~technology itto ~~enhances~~regulate ~~the~~cortisol ~~effectiveness~~concentration ~~of air purification, sterilization, and environmental improvement, enabling applications~~ in ~~disinfection~~the ~~and sterilization~~brain, ~~crop~~improving ~~drying,~~mental ~~security~~state ~~monitoring, beauty~~ and ~~skincare,~~learning ~~as well as medical and wellness support. Additionally~~efficiency, byapplicable ~~using~~in ~~ultrasonic~~mental and mechanical sound wave technologies, along with applying sound waves and oscillations at appropriate frequencies to the human body, these technologies aim to promote blood circulation, regulate organ functions, and support overall health, ~~achieving preventative~~ and ~~therapeutic~~education ~~effects~~fields. ~~Benefits include improved sleep quality, prevention of dementia, and nerve repair.~~

~~Sales and Distribution~~30

As● ofMid-Term ~~the date of this report, the company implemented a new marketing strategy that includes~~Plan:Around 1)environmental ~~covering~~acoustic ~~multiple~~technology ~~e-commerce~~applications ~~platforms through brand building, product packaging,~~ and ~~multi~~cardio-~~channel~~brain ~~marketing~~acoustic ~~combined~~technology ~~with a refined pricing strategy; and 2) close collaboration with market promotion channel partners to drive product launches~~applications, ~~increase sales volume, and expand market influence.~~including:

1)● ~~Online Distributors~~Food and ~~Living~~Water ~~Stream~~Cleaning and Sterilization Devices: Combines ultrasonic cleaning and sterilization technology to provide convenient home-use products, ensuring food safety and clean drinking water.

~~This integrated~~● ~~marketing~~Cardiovascular ~~approach~~Health ~~has~~Products: ~~helped~~Develops ~~the~~acoustic ~~company~~technology-based ~~rapidly~~health ~~increase~~monitoring ~~market~~and ~~share~~treatment devices for cardiovascular and ~~brand~~cerebrovascular ~~awareness~~systems, promoting innovation in the medical health sector.

Ø● ~~Marketing~~Long-Term ~~Channels~~Plan: ~~The~~Precision ~~strategy~~design ~~spans platforms such as Tmall, JD.com, Douyin, Xiaohongshu, Dewu, Weibo,~~ and ~~Video~~manufacturing ~~Channels.~~of ~~Tmall~~acoustic ~~and JD.com focus on brand exposure and promotional activities~~products, while Douyin leverages short videos and live-streamed sales, combining influencer partnerships (with over a hundred influencers) and a distribution model to expand influence. Xiaohongshu and Dewu build user interest through “seeding” and community marketing, while Weibo and Video Channels attract followers through educational content and topic marketing.including:

30 ● Acoustic Agriculture:

Øo ~~Brand~~Ultrasonic ~~and~~Agricultural Product ~~Packaging:~~Preservation ~~The company promotes a minimalistic yet premium brand image, showcasing its global leadership in sonic technology~~ and ~~commitment~~Pest toControl aDevices: ~~healthy~~Extends ~~lifestyle. The main acoustic product,~~ the ~~“Clean~~shelf &life ~~Comfort~~of ~~Protector,”~~agricultural ~~features multi-functions like air purification~~products, ~~sterilization,~~reduces ~~and~~pesticide ~~odor removal~~use, and isenhances ~~marketed~~agricultural ~~comprehensively~~production ~~for diverse consumer scenarios~~efficiency.

Øo ~~Product~~Acoustic ~~Positioning~~Plant ~~Strategy~~Growth Stimulators: ~~Product~~Optimizes ~~pricing~~plant isgrowth ~~targeted~~environments atthrough ~~the~~sound ~~mid-to-high-end~~wave ~~market.~~technology, ~~The~~improving ~~company~~crop ~~also~~yield ~~offers various discounts~~ and ~~promotions tailored to platform events or partner requirements to enhance sales appeal~~quality.

2)● ~~Market~~Acoustic ~~Promotion Team~~Industry:

~~The company~~o ~~continued~~Ultrasound-Assisted toLiquid-Phase ~~collaborate~~Separation ~~with~~Machines: ~~three~~Enhances ~~influential~~liquid ~~Chinese~~separation ~~market~~efficiency ~~promotion~~in ~~enterprises~~manufacturing, ~~which~~reducing ~~leverage~~energy ~~extensive market resources to recommend new clients for the company and facilitate the signing of contracts with these new clients~~consumption.

~~Key~~o ~~Customers~~Ultrasonic Metal 3D Printing Technology: Drives the upgrading of the manufacturing industry, enabling high-precision and ~~Agreements~~ high-efficiency metal processing.

On● ~~June~~Acoustic ~~16,~~Medical 2024, the Company’s wholly-owned subsidiary, Shuhai Jingwei (Shenzhen) Information Technology Co., Ltd. (“Shuhai Jingwei”), entered into a Sales Agreement (the “Agreement”) with Tianjin Qianli Culture Communication Co., Ltd. (“Qianli Culture”) for the sale of approximately $2.6 million (RMB 18.6 million) of the Company’s acoustic high tech products. This Agreement follows the signing of two acoustic product sales agreements in April 2024, for a total of approximately $18 million. This Agreement sustains expected acoustic product sales as well as overall Company revenue growth.According to the Agreement, Qianli Culture will purchases approximately 31,000 units of Datasea’s’ ‘Tianer’ and ~~‘Star~~Elderly Sleep’ branded products by December 31, 2024, which encompass the Company’s air disinfection machines, restroom deodorization and disinfection devices and sleep aids The total sales contract is for approximately $2.6 million (RMB 18.6 million).Care:

5Go AIDevelops ~~multimodal~~acoustic ~~digital Segment~~technology-based medical devices, such as ultrasonic therapy instruments and acoustic rehabilitation equipment, serving the medical and elderly care sectors.

~~Our achievements~~● ofAcoustic 5GInternet AIof ~~Multimodal~~Things ~~digital~~(IoT) Technology:

5Go AIIntegrates ~~multimodal~~acoustic ~~digital Segment~~technology with IoT to develop intelligent acoustic sensors and devices, promoting the development of smart cities and smart homes.

~~Datasea continues to invest~~Recent in the research and application of 5G AI multimodal digital technology, committed to providing customers with leading intelligent solutions. As a pioneer in China’s 5G multimodal digital field, Datasea deeply integrates the high-speed and low-latency characteristics of 5G networks with AI and big data processing technologies to create a comprehensive AI multimodal digital platform that spans multiple industries. This platform integrates various data forms, such as text, audio, and video, enabling efficient information generation, precise transmission, and automation. It provides enterprise clients with high-quality services, including data packages and new media marketing. Powered by AI, Datasea’s 5G platform enhances customer acquisition, marketing, and brand building efficiency while creating new opportunities for digital transformation and business models. Datasea’s 5G products and solutions are widely applied in rural revitalization, healthcare, and logistics, providing digital and intelligent services to over 48.42 million enterprises and households in China (with more than 99% being small and medium-sized enterprises), driving industrial upgrades and innovative development.Development

31 Key Customers and Agreements

~~Recent~~On December ~~Development~~25, 2024, the Company’s wholly owned subsidiary, Shuhai Jingwei (Shenzhen) Information Technology Co., Ltd. (“Shuhai Jingwei”), signed an agreement with Tianjin Qianli Cultural Media Co., Ltd. (“Qianli Cultural Media”) to sale air purifiers (Hailijia). As of December 31, 2024, the revenue from Qianli Cultural Media reached RMB 267,936 (approximately USD 37,500). The signing and execution of this contract marks a strong start for the entry of acoustic environmental disinfection products into the end-consumer market, laying a solid foundation for the future expansion of the business and the brand’s influence.

~~Datasea~~By the end of December 2024, the Company’s VIE entity subsidiary, Guozhong Haoze, had signed an agreement with 14 beauty industry ~~core~~service ~~advantages~~companies in Tianjin, Beijing, and ~~existing~~other cities in China, to deploy its acoustic high-tech products to 263 beauty and body care stores in northern China, including Tianjin and Hebei Province. According to the agreement, the Company plans to sell approximately 140,000 units of acoustic air purifiers, sleep products, and 5G AI ~~multimodal~~ digital service systems specifically developed for the beauty industry by the end of 2025, with expected revenue of USD 11 million (approximately RMB 77 million). This agreement not only expands Datasea’s market share in the beauty industry but also strengthens its penetration in northern China, further driving the industrial application of the Company’s products and technologies.

As one of China’s leading service providers in the 5G AI multimodal digital business field, Datasea’s 5G AI multimodal digital products deeply integrate text messages, multimedia messages, conversation messages, and value-added services. These products not only support various application services but also enable real-time communication with user terminals through a native SMS application channel. With an intelligent service system, the entire process is automated, allowing for self-service responses to customer needs, significantly improving service efficiency, response speed, and user experience.31

~~Datasea has~~In ~~utilized~~January ~~advanced~~2025, AIan ~~processing~~additional ~~technology~~agreement towas ~~carry~~signed ~~out~~with a9 ~~comprehensive~~health ~~technological upgrade to its 5G AI multimodal digital business,~~management ~~resulting~~companies in ~~disruptive functionality enhancements. Currently~~Tianjin, ~~the~~further ~~platform~~expanding ~~can~~its ~~intelligently~~business ~~generate~~coverage ~~and~~in ~~process~~northern ~~various~~China. ~~information formats~~According ~~such~~to asthese ~~sound~~agreements, ~~text,~~Datasea’s ~~images, and video with~~ acoustic high-tech ~~precision~~products ~~and~~will ~~efficiency.~~be ~~Additionally,~~introduced ~~leveraging~~into AI200 ~~digital~~beauty ~~human~~stores ~~technology, the platform enables automated marketing, intelligent content creation, and efficient information transmission~~ in ~~the~~key ~~marketing~~northern ~~field, creating~~markets asuch ~~powerful~~as ~~video~~Tianjin ~~matrix~~ and ~~precision~~Hebei ~~marketing tools~~Province. ~~This~~By ~~technological~~the ~~innovation~~end ~~offers customers a new level~~ of ~~brand building,~~ ~~customer acquisition~~2025, ~~and~~approximately ~~marketing solutions~~90,000 ~~significantly~~units ~~driving~~are ~~revenue~~expected ~~growth~~to ~~and~~be ~~helping~~sold, ~~clients~~generating ~~stand~~additional ~~out~~revenue inof ~~the~~around ~~competitive~~USD ~~market~~6. ~~Through~~8 ~~the~~million. ~~low-latency~~The ~~and~~signing ~~high-speed~~of ~~transmission~~these new ~~features~~agreement offurther ~~5G,~~consolidates Datasea’s ~~products~~market ~~not~~leadership ~~only~~in ~~achieve~~health ~~real-time~~management ~~data~~and ~~interaction but~~beauty ~~also~~sectors, ~~support~~creating ~~large-scale,~~more ~~customized,~~opportunities for ~~multi~~long-~~channel~~term ~~content~~growth ~~distribution,~~and ~~creating~~market ~~new~~expansion ~~business~~in ~~models~~the ~~and marketing opportunities for enterprises~~future.

~~IV.~~As of ~~The~~the ~~Company’s 5G~~report AIdate, ~~Multimodal~~Datasea ~~Digital~~has ~~Business~~introduced ~~Products~~its acoustic high-tech products to 463 beauty salons and ~~Product~~body ~~Value~~care stores, with an estimated 140,000 units expected to be sold by the end of 2025, generating revenue of approximately USD 17.8 million.

As one of the leading service providers in China’s 5G AI multimodal digital business field, Datasea’s 5G AI multimodal digital products integrate text messages, multimedia messages, conversation messages, and value-added services to create a highly intelligent, comprehensive digital platform with solutions spanning multiple industries, including rural revitalization, logistics, and the beauty industryIV. ~~Datasea’s 5G AI multimodal digital business solutions provide 5G digital and intelligent services, as well as various~~Industry ~~value-added~~Space ~~services, to more than 48.42 million enterprises~~ and ~~institutions~~Position ~~(over 99%~~ of ~~which~~the ~~are~~Acoustic ~~small and medium-sized enterprises) and households in China.~~Business

Datasea~~’s 5G~~ AIis ~~multimodal~~deeply ~~digital~~rooted ~~platform~~in ~~and~~the ~~solutions~~acoustic ~~not~~high-tech ~~only~~industry ~~support~~and ahas experienced ~~wide~~rapid ~~range~~growth ofin ~~application~~technological ~~services~~innovation, ~~but~~product ~~also~~development, ~~leverage~~and aindustry ~~native~~applications. ~~SMS~~The ~~application~~Company emphasizes robust domestic ~~channel~~and ~~for~~international ~~instant~~collaboration ~~communication~~to ~~with~~foster ~~user~~the ~~terminals~~integration of industry, academia, and research. With ana ~~intelligent~~focus ~~service~~on ~~system~~the acoustic intelligence sector, we have established five key sub-sectors within the ~~entire~~acoustic ~~process~~field—including isacoustic ~~fully~~health, ~~automated~~acoustic industry, ~~requiring~~acoustic noagriculture, ~~manual~~as ~~intervention,~~well ~~enabling~~as ~~self-service~~acoustic ~~responses~~applications in IoT and ~~handling~~other ofrelated ~~customer~~areas—leading ~~needs.~~the ~~This~~industry ~~significantly~~by ~~improves~~providing ~~service~~cutting-edge ~~efficiency,~~acoustic ~~response~~intelligence ~~speed,~~technologies and ~~user experience~~products.

~~The platform~~Datasea ~~operates~~holds ~~through~~a ~~cloud~~leading ~~computing~~position ~~and~~in ~~SaaS~~various ~~models~~acoustic technologies, such ~~supporting~~as ~~cross-industry~~ultrasound, ~~applications~~infrasound, ~~including~~and ~~digital~~Schumann ~~transformation~~resonance. ~~solutions from~~To ~~rural~~promote ~~revitalization~~research toand ~~logistics~~innovation ~~and~~in these areas, the ~~beauty~~Company ~~industry.~~actively Incollaborates with ~~rural~~numerous ~~revitalization,~~renowned ~~the~~research ~~solution~~institutions ~~offers~~and ~~smart~~universities, ~~agriculture~~including ~~management and~~the ~~infrastructure~~Institute ~~optimization~~of Acoustics, ~~improving~~Chinese ~~efficiency,~~Academy ~~reducing~~of ~~waste,~~Sciences; ~~and~~the Cloud ~~supporting~~Computing ~~rural~~and ~~modernization.~~Big ~~Through~~Data ~~precision~~Research ~~agriculture~~Institute, ~~remote~~ ~~healthcare,~~China Academy of Information and ~~education~~Communications ~~services,~~Technology; the ~~solution~~Internet ~~enhances~~Industry ~~rural~~Research Institute ~~living~~at ~~standards.~~Tsinghua InUniversity; the ~~logistics~~Artificial ~~sector,~~Intelligence ~~intelligent~~Research ~~warehousing, sorting,~~Institute ~~and~~at ~~unmanned~~Harbin ~~delivery~~Institute ~~solutions~~of ~~help~~Technology; ~~reduce~~Beijing ~~costs~~Union University; and ~~improve~~the ~~efficiency,~~Remote ~~driving~~Sensing ~~the~~Research ~~digital~~Institute ~~transformation~~ of ~~logistics~~Jilin ~~and providing~~University. ~~faster~~Through these partnerships, ~~more~~we ~~reliable~~are ~~services,~~committed ~~especially~~to inpioneering ~~remote~~new ~~areas.~~research topics ~~For~~and ~~the~~developing ~~beauty~~innovative ~~industry,~~technological ~~smart~~applications ~~customer~~that ~~management,~~drive ~~personalized services,~~progress ~~and~~within ~~remote~~the ~~consultations~~acoustic ~~enhance~~field. ~~service~~To ~~quality~~better ~~and~~achieve ~~customer~~these ~~satisfaction~~objectives, Datasea ~~fostering~~has ~~industry~~established ~~innovation~~joint ~~and~~laboratories ~~offering~~to ~~consumers more~~enhance ~~personalized~~the integration and ~~efficient~~collaboration ~~beauty~~of ~~services~~research resources.

32 Furthermore, the Company, in collaboration with the Ministry of Industry and Information Technology, the Key Laboratory for Artificial Intelligence Technology and Applications Evaluation, and the Cloud Computing and Big Data Research Institute of the China Academy of Information and Communications Technology, has jointly released China’s first white paper on the acoustic high-tech industry. This white paper provides a detailed discussion on the applications of acoustic high-tech across various industries, demonstrating Datasea’s proactive role in leading industry development. It highlights the Company’s prominent position in the acoustic high-tech field both domestically and globally, and further reinforces the strategic importance of Datasea in driving the nationalization and globalization of acoustic technology.

~~Sales~~V. ~~and~~International Expansion ~~Distribution~~of the Acoustic Business

~~Through~~The ~~its~~international ~~independently~~development ~~developed~~of acoustic products is a strategic priority 5Gfor AIDatasea. ~~multimodal~~Since ~~digital~~the ~~business~~establishment ~~platform~~of its wholly owned subsidiary, Datasea ~~continues~~Acoustics toLLC, ~~support~~in ~~the~~Delaware ~~digital~~in ~~transformation~~2023, ~~and~~the ~~upgrade~~Company ofhas ~~cities~~gradually expanded ~~and~~its ~~enterprises~~ business operations in the ~~Chinese~~United ~~market~~States. ~~Recently,~~Datasea inhas ~~terms~~partnered ofwith ~~customer~~several ~~acquisition~~well-known online e-commerce platforms and ~~marketing,~~brick-and-mortar distributors in the ~~company~~U.S. ~~has~~to ~~implemented~~broaden athe ~~series~~market offor ~~strong~~its ~~measures to~~acoustic ~~drive sales~~products, ~~achieving~~including ~~explosive~~collaborations ~~growth~~with incompanies ~~sales~~such as iPower (NASDAQ: IPW) and Meglio Interiors LLC.

~~Through its~~In ~~own sales team~~addition, the Company ~~vigorously~~has ~~promotes~~collaborated ~~and~~with ~~publicizes~~ the ~~Company’s~~century-old ~~research~~U.S. intellectual ~~and~~property ~~development~~firm ~~results~~Paul & Paul to pursue patent applications and ~~technology~~acquisitions, thereby building a robust international intellectual ~~display~~property inportfolio. 5GDatasea ~~sales,~~is ~~actively~~focusing ~~participates~~on inexpanding ~~important~~its ~~seminars~~presence ~~and~~in ~~business~~areas ~~fairs~~such ~~around~~as ~~the~~acoustic ~~country~~agriculture, ~~and~~acoustic ~~deeply~~industry, ~~explores~~acoustic ~~the target~~medicine, ~~customers~~and ~~related~~acoustic tohealth, 5Gand ~~news.~~is ~~Through~~actively ~~painstaking~~seeking ~~efforts~~potential merger and ~~keen~~acquisition ~~business~~opportunities ~~acumen,~~to wedrive ~~have~~global ~~obtained~~business aexpansion ~~stable~~and ~~customer flow~~international growth.

Furthermore, the Company also continued cooperation with professional 5G news business promotion team, and signed 5G communication marketing service agreements with some marketing companies that have many years of advantages in Internet of Things market development, operation and promotion services, have effective integration with mobile Internet enterprises, Internet of Things industry chain and other resources, and have strong channel expansion and sales and operation capabilities, to carry out in-depth cooperation. Quickly and effectively recruit high-quality partners for the Company to achieve rapid economic value transformation. Third party marketing companies bring us a large number of customers, which is our total sales growth engine.32

~~Finally, we have also carried out some preferential activities and implemented different discount policies for customers~~VI. ~~Through preferential~~Future ~~activities~~Outlook tofor ~~attract~~the ~~customers~~Acoustic ~~to participate in cooperation, increase customer participation and loyalty, thereby increasing sales artery.~~Business

~~Key~~Datasea ~~Customers~~will continue to leverage its core competency in Acoustic + AI precision manufacturing to drive technological innovation and ~~Agreements~~global application of acoustic high-tech products, aiming to become the leading innovator in the global acoustic industry. The Company will be driven by research and development, deepening its focus on the five key sectors—acoustic industry, acoustic agriculture, acoustic medicine, acoustic health, and acoustic IoT technologies—to further expand the application boundaries of acoustic technology and promote the widespread adoption and upgrading of acoustic high-tech products in global markets.

~~During~~ At the ~~reporting~~strategic ~~period~~level, ~~the~~Datasea ~~company~~will ~~broke~~accelerate ~~the~~its ~~business~~international expansion, by forging deep partnerships in the ~~promotion~~U.S. ofand aglobal ~~large~~markets ~~number~~to ofestablish ~~small~~a ~~customers~~comprehensive ~~nationwide~~acoustic athigh-tech ~~the~~industrial chain worldwide. ~~same~~The ~~time~~Company will use technological innovation as its cornerstone, ~~improve~~strengthening the ~~number~~integration of ~~large~~international ~~customers~~and ~~signed~~domestic talent to build an efficient, ~~and~~globally ~~continue~~collaborative toteam ~~successfully~~and ~~sign~~enhance ~~large~~its ~~customers~~research, ~~such~~development, ~~as:~~and ~~Qingdao~~production ~~Ruizhi~~capabilities ~~Yixing Information~~in ~~Technology~~precision Coacoustic manufacturing., ~~LTD.~~At the same time, ~~Shanghai~~Datasea ~~Shixun~~will ~~Network~~actively ~~Technology~~pursue ~~Co.,~~international ~~LTD.,~~merger ~~Wuhan~~and ~~Xiaoming~~acquisition ~~Technology~~opportunities ~~Co.,~~to ~~LTD.~~integrate high-quality global resources, ~~Xinyi~~optimize ~~Xinfan~~its ~~Information Technology~~intellectual ~~Co.~~property portfolio, ~~LTD~~and further consolidate its leading position in the global acoustic industry.

On August 9, 2024, Datasea’s operating entity in China, Shuhai Information Technology Co., LTD. (“Shuhai Beijing”), entered into an agreement with Shanghai Shixun Network Technology Co., LTD. (hereinafter referred to as “Shixun Network”). The agreement stipulates that the company will purchase 5G +AI multimodal ~~data~~digital cards of various denominations within 12 months after the agreement comes into effect, with prices ranging from 10 yuan to 500 yuan ($1.38 to $69.4). From July 1 2024 to September 30 2024, the revenue from Shanghai Shixun Network Technology Co., LTD reached RMB10,981,054 Yuan(equivalent to US $1,542,956).Segment

~~On August 9, 2024, Datasea’s~~Our ~~operating~~achievements ~~entity in China, Guozhong Times (Beijing) Technology Co., LTD. (“Guozhong Times”), a subsidiary~~ of Suhai Information Technology Co., LTD. (“Shuhai Beijing”), entered into an agreement with Wuhan Xiaoming Technology Co., LTD. (hereinafter referred to as “Xiaoming Technology”). The agreement provides for the purchase of 5G +AI ~~multi-modal~~Multimodal data recharge cards in various denominations within 12 months after the agreement takes effect, with prices ranging from 10 yuan to 500 yuan ($1.38 to $69.4). From July 1 2024 to September 30 2024, the revenue from Wuhan Xiaoming Technology Co., LTD reached RMB5,114,995Yuan(equivalent to US $718,712).digital

33 5G+ AI multimodal digital Segment

~~On August 12, 2024,~~ Datasea~~’s operating entities in China~~, ~~Shuhai Information Technology Co., LTD. (“Suhai Beijing”)\ Heilongjiang Xungrui Technology Co.,~~ LTD. (“Xungrui Technology”), Shuhai Jingwei (Shenzhen) Information Technology Co., LTD. (“Shuhai Jingwei”), Guozhong Haoze (Beijing) Technology Co., LTD. (“Guozhong Haoze”) and Guozhong Times (Beijing) Technology Co., LTD. (“Guozhong Times”) entered into an agreement with Qingdao Ruizhiyixing Information Technology Co., LTD. (hereinafter referred to as ~~“RuizhiYixing”). The~~one ~~agreement~~of ~~provides for~~ the ~~purchase~~leading ofservice 5Gproviders ~~AI multi-modal data recharge cards~~ in ~~various~~China’s ~~denominations~~5G+AI ~~within~~multimodal 12digitalization ~~months~~sector, ~~after~~has ~~the~~built ~~agreement takes~~a ~~effect~~multifunctional, ~~with~~highly intelligent ~~prices~~digital ~~ranging~~platform ~~from~~through ~~10 yuan to 500 yuan ($1.38 to $69.4). From July 1 2024 to September 30 2024,~~ the ~~revenue~~deep ~~from~~integration ~~Qingdao Ruizhiyixing~~of ~~Information~~multimodal ~~Technology Co.~~messaging, ~~LTD~~AI ~~reached RMB129~~capabilities,~~438,879~~ ~~Yuan(equivalent~~and toservice ~~US $18,187,560)~~functions.

~~On September 24, 2024,~~ Datasea’s ~~operating~~5G+AI ~~entity~~multimodal indigital ~~China,~~platform ~~Guozhong~~is ~~Haoze~~an ~~(Beijing)~~innovative ~~Technology~~platform ~~Co.,~~centered ~~LTD.~~on ~~(“Guozhong~~artificial ~~Haoze”),~~intelligence aand ~~subsidiary~~big ofdata ~~Shuhai Information Technology Co.~~technologies, ~~LTD.~~fully ~~(“Shuhai~~integrating advanced ~~Beijing”),~~AI ~~entered~~algorithms ~~into~~with anmultimodal ~~agreement~~data ~~with~~processing ~~Xinyi~~capabilities. ~~Fanfa~~The ~~Information~~platform ~~Technology~~is ~~Co.,~~capable ~~LTD.~~of ~~(hereinafter referred~~processing tomassive asamounts ~~“Fanfa~~of ~~Technology”).~~data ~~The~~in real ~~agreement~~time ~~provides~~from ~~for~~diverse ~~the~~sources—including ~~purchase~~text, ofimages, 5Gaudio, AIand ~~multi-modal~~video—and, ~~data~~through ~~recharge~~intelligent ~~cards~~analytical intechniques, ~~various~~provides ~~denominations~~clients ~~within~~with 12precise ~~months~~and ~~after~~efficient ~~the~~data ~~agreement~~support. ~~takes~~Its ~~effect,~~core ~~with~~strength ~~prices~~lies ~~ranging~~in ~~from~~its 10robust ~~yuan~~AI totechnology ~~500~~development ~~yuan~~capabilities, ~~($1.38~~which toenable the ~~$69.4).~~automation ~~From~~of ~~July 1~~complex ~~2024~~business toprocesses ~~September~~and 30the ~~2024,~~end-to-end ~~the~~intelligent ~~revenue~~transformation from ~~Xinyi~~data ~~Fanfa~~collection ~~Information~~to ~~Technology~~analysis ~~Co.~~and decision-making, significantly ~~LTD~~enhancing ~~reached~~both ~~RMB4,457,699Yuan(equivalent~~data toprocessing USefficiency ~~$626,356)~~and accuracy.

~~Market~~The platform ~~Results~~offers a one-stop intelligent service system for industry clients, covering areas such as data analysis, business process automation, and intelligent decision support. With the support of advanced AI algorithms, the platform can rapidly respond to customer needs and deliver customized solutions. Whether it is optimizing enterprise operations, risk prediction, or enhancing customer experience, the integration and analysis of multimodal data through the deep fusion of AI and big data technologies minimizes manual intervention, reduces operational costs, and further improves service efficiency and user experience. This drives the intelligent upgrade of industries and creates tangible value for clients.

~~Through its independently~~Moreover, ~~developed~~it 5Gis AIworth ~~multimodal~~noting ~~digital~~that ~~business platform,~~ Datasea’s ispioneering ~~supporting~~innovation ~~the digital transformation and upgrade of cities and enterprises~~ in the ~~Chinese~~5G+AI ~~market.~~multimodal Indigital ~~terms~~domain ~~of customer acquisition and marketing, the company~~ has ~~implemented~~set a ~~series~~benchmark offor ~~strong measures to drive~~technological ~~sales,~~advancement ~~achieving~~within ~~explosive growth. By~~ the ~~end of this fiscal year~~industry, ~~the~~becoming ~~company’s~~a ~~main~~critical ~~source~~engine offor ~~revenue~~driving ~~came~~digital ~~from~~transformation. ~~service~~Its ~~fees~~capabilities ~~related to~~in ~~its 5G AI~~ multimodal ~~digital~~data ~~business services, The revenue from July 1 2024 to September 30 2024 reached $21,081,094, reflecting a~~processing ~~206.38%~~and ~~increase~~deep ~~compared~~application toof ~~the~~AI ~~same~~algorithms ~~period~~have innot ~~2023.~~only ~~The~~achieved ~~revenue~~industry-leading ~~growth~~technological isperformance ~~primarily~~but ~~due~~also toopened ~~the~~up ~~rapid~~new ~~expansion of China’s 5G AI~~pathways ~~multimodal~~in ~~digital~~ business, ~~with~~and ~~Datasea’s~~service 5Gmodels, AIfurther ~~multimodal~~solidifying ~~digital~~its ~~business~~leading ~~maintaining a leadership~~ position in the industry~~. The~~ ~~continuous~~and ~~growth~~earning ofwidespread ~~the~~industry recognition and customer ~~base supports the company’s significant business expansion~~trust.

~~ESG~~Multimodal ~~Management~~models refer to machine learning models that can process and integrate multiple modalities or data types, including text, images, audio, and video inputs. These models combine different forms of data inputs to achieve a more comprehensive understanding and generate more reliable output results. The Company's AI multimodal models have already achieved significant breakthroughs in areas such as sentiment analysis, machine translation, and natural language processing, expanding the boundaries of intelligent system applications.

~~During~~Currently, the ~~reporting~~Company ~~period,~~is ~~Datasea~~integrating ~~remains~~DeepSeek's ~~committed~~distributed training tomethods ~~advancing~~and ~~its~~mixed-precision ~~ESG~~training ~~(Environmental~~techniques, ~~Social,~~utilizing ~~and~~half-precision ~~Governance~~(FP16) ~~management~~and ~~framework,~~single-precision ~~strengthening~~(FP32) ~~our~~floating-point ~~competitive~~numbers. ~~edge in sustainable development,~~By ~~and~~fusing ~~making notable progress across~~ multiple ~~areas.~~sensory ~~Specifically~~inputs, the ~~company~~models ~~has~~can ~~taken~~improve ~~targeted~~data ~~measures~~comprehension, inanalysis ~~supply~~accuracy, ~~chain management~~ and ~~office~~ ~~environment~~decision-making ~~optimization to enhance its commitment to environmental sustainability, demonstrating Datasea’s practical actions in the ESG space~~reliability.

First, as part of the company’s ongoing ESG strategy, Datasea prioritized environmental responsibility, social impact, and governance performance in the selection of new suppliers for its acoustics business this quarter. Through a rigorous evaluation process, Datasea focused on selecting suppliers who have demonstrated a commitment to sustainability and possess a positive record in environmental protection. Specifically, the company assessed potential suppliers’ use of sustainable materials, carbon emission management, and energy efficiency improvement measures, ensuring that all chosen partners are closely aligned with Datasea’s ESG goals. This approach not only enhances Datasea’s ESG compliance but also strengthens the company’s leadership in sustainable development within the industry. By incorporating this new strategy, Datasea fortifies supply chain sustainability, setting a new standard for responsible practices that align with global best practices in environmental and social accountability.33

34 I. Technological Innovation and Application of 5G+AI

~~Second,~~In terms ~~Datasea’s~~of ~~Shenzhen~~technological ~~subsidiary~~innovation, ~~Shenzhen Jingwei,~~Datasea ~~has~~leverages ~~relocated~~advanced toAI anprocessing ~~energy-efficient~~technologies ~~office~~to ~~building~~comprehensively ~~this~~transform ~~quarter. This new office space not only optimizes space usage but also incorporates sustainable and energy-saving design concepts in~~ its ~~architecture~~5G ~~and facilities. The office features high-efficiency energy~~multimodal ~~systems,~~digital ~~including smart lighting controls~~business, ~~environmentally~~delivering ~~friendly~~disruptive ~~cooling,~~functional upgrades and ~~ventilation~~establishing ~~systems,~~a ~~aimed~~unique at5G+AI ~~minimizing~~processing ~~energy consumption and greenhouse gas emissions~~technology. ~~Additionally~~Currently, ~~eco-friendly materials with a low carbon footprint were prioritized in~~ the ~~office renovation~~platform ~~and~~is ~~layout~~capable ~~design,~~of ~~reducing~~intelligently ~~emissions~~generating ~~during the renovation process~~ and ~~ensuring~~processing a ~~safe~~variety ~~and~~of ~~healthy~~data ~~indoor~~types ~~environment~~including ~~that~~audio, ~~complies~~text, ~~with environmental~~images, ~~standards~~and video.

ByAdditionally, ~~implementing~~in ~~these~~line ~~energy-saving~~with ~~measures,~~the Company's business ~~Datasea~~needs, ~~further~~a ~~reduces~~unified ~~its~~Transformer ~~operational~~model ~~environmental~~architecture ~~impact,~~has ~~demonstrating~~been ~~proactive~~designed ~~environmental~~to ~~management.~~process ~~The~~inputs ~~new~~from ~~office~~multiple ~~space~~modalities ~~not only~~in ~~meets~~parallel. Datasea’s 5G+AI ~~needs~~platform ~~for~~incorporates athe ~~sustainable~~self-developed ~~workplace~~Transformer ~~but~~model ~~also~~architecture, ~~showcases~~leveraging ~~how~~self-attention mechanisms to ~~implement~~process ~~efficient~~multimodal data in parallel and ~~environmentally~~deeply ~~friendly management~~learn ~~practices~~the incomplex ~~operations~~interactions between different modalities. This ~~transition~~approach ~~also~~excels ~~provides~~in ~~employees~~applications ~~with~~such aas image-text ~~greener~~correlation analysis and audio-video synchronization, ~~healthier~~significantly ~~work~~enhancing ~~environment~~the generalization and adaptability of multimodal data processing. By integrating DeepSeek's distributed training methods, ~~encouraging~~the ~~them~~platform will further advance in areas such as natural language totext ~~embrace~~generation, ~~ESG~~multilingual ~~principles~~processing, text generation, code writing, debugging, and ~~contribute~~optimization, tological ~~Datasea’s~~reasoning, ~~steady~~and ~~progress~~chain-of-thought output, inproviding ~~sustainable~~users ~~development~~with more comprehensive and accurate responses.

~~Datasea will continue to enhance its ESG management~~The ~~framework~~applications ~~responsibly, regularly assessing the effectiveness~~ of ~~ESG~~multimodal ~~initiatives~~technology and reporting progress to ensure that business practices align with sustainability commitments. The company will continue to seek innovative solutions in future supply chain management and office environment initiatives, further advancing green development and social responsibility in the industry and realizing long-term goals for sustainable growth.include:

~~Going~~1. ~~Concern~~Enhancing the comprehension capabilities of AI systems by integrating multimodal data to enrich the information content.

~~The accompanying~~2. ~~unaudited~~Improving ~~consolidated~~robustness ~~financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets,~~ and ~~liquidation~~reliability ofthrough ~~liabilities in~~ the ~~normal~~mutual ~~course~~supplementation ~~of business. For the three months ended September 30, 2024~~ and ~~2023,~~cross-validation ~~the Company had a net loss~~ of ~~approximately~~data ~~$1.96 million and $22,056, respectively. The Company had an accumulated deficit of approximately $41.40 million as of September 30, 2024, and negative cash flow~~ from ~~operating~~different ~~activities of approximately $0~~modalities.~~73 million and $6.74 million for the three months ended September 30, 2024 and 2023, respectively.~~

~~The historical~~3. ~~operating~~Expanding ~~results~~application ~~indicate~~domains ~~the~~such ~~Company~~as ~~has~~visual ~~recurring losses from operations which raise the~~ question ~~related~~answering, toaffective ~~the~~computing, Company’s ability to continue as a going concern although the range of such recurring operating losses has narrowed in recent years. There can be no assurance the Company will become profitable or obtain necessary financing for its business and ~~investments~~multimodal orsearch ~~that it will be able to continue in business~~ and ~~investments~~recommendation. ~~The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. As of September 30, 2024, the Company had cash of $937,606.~~

35 4. Facilitating natural human-computer interaction by developing more user-friendly systems.

WeApplication ~~continue~~scenarios toencompass ~~bring~~image incaption ~~additional~~generation, ~~investors~~ text-to-image ~~support our company’s research and development~~synthesis, ~~marketing~~sentiment ~~and operations. On August 1~~analysis, ~~2023,~~autonomous ~~the Company entered into two separate subscription agreements with a certain non-U.S. investor~~driving, ~~pursuant to which the Company agreed to sell~~ and ~~the~~human-machine ~~investor agreed to purchase an aggregate of 4~~interaction,~~760,000 shares of common stock price at a $1.2 per share purchase~~ ~~price.~~delivering ~~Such~~extremely ~~shares~~high ~~must~~accuracy beand ~~held for a period of 365 days~~efficiency. ~~In accordance with such two agreements~~Notably, ~~Investor~~the ~~shall~~application ~~pay~~of aAI ~~total~~digital ~~purchase price~~human oftechnology ~~$5,712,000~~ in ~~RMB,~~marketing atenables anthe ~~amount~~platform to ofachieve ~~RMB~~automated 40promotion,~~000,000,~~ nointelligent ~~later~~content ~~than September 30~~generation, ~~2023.~~and Onefficient ~~September~~information ~~21,~~transmission—thereby ~~the~~forming ~~Company~~a ~~has received~~powerful ~~all~~video ofmatrix ~~the~~and ~~payment~~precision ofmarketing ~~RMB 40,000,000~~tools.

OnFurthermore, ~~August~~5G+AI ~~15,~~intelligent ~~2023~~analysis, ~~the~~based ~~Company~~on ~~entered~~historical ~~into~~data aand ~~subscription~~user ~~agreement~~status, ~~with~~can aautomatically ~~non-U.S.~~analyze ~~investor~~user todata ~~purchase~~and anapplication ~~aggregate of 2,962,963 shares~~requirements ofto ~~common~~optimize ~~stock~~resource ~~price~~allocation atand ascheduling, ~~$1.35~~significantly ~~per~~enhancing ~~share~~rapid ~~purchase~~response ~~price,~~capabilities ~~with~~and ~~a total~~enabling ~~subscription~~users ~~price~~to ofswiftly ~~$4,000,000. The shares must be~~access ~~held~~relevant ~~for~~application acontent ~~period~~via ofintelligent ~~180 days~~guidance. OnIn ~~September 13~~addition, ~~2023,~~5G+AI ~~our~~intelligent ~~Company~~algorithmic ~~announced~~analysis ~~the~~is ~~closing~~capable of anmonitoring ~~underwritten public offering of 5,000,000~~the ~~shares~~marketing ofapplication ~~common~~proposals ~~stock~~submitted atby ausers ~~public offering price~~ of ~~$0.40~~the ~~per~~5G ~~share,~~multimodal ~~for~~system ~~net~~in ~~proceeds~~real oftime, $1predicting,~~635,000,~~ ~~after~~preemptively ~~deducting~~alerting, ~~underwriting discounts~~ and ~~other offering expenses. On July 3, 2024, we closed an offering for net proceeds of $2.2 million after deducting underwriting discounts~~rectifying ~~and~~potential ~~other~~issues ~~offering~~to ~~expenses.~~reduce Weoperational ~~believe these fundings demonstrate our investors’ confidence in our strategy and business~~risks.

~~On October 3, 2024, Datasea Inc., a Nevada~~By ~~corporation~~leveraging ~~(the~~5G+AI ~~“Company”),~~intelligent ~~entered~~marketing ~~into subscription agreements~~technologies, ~~dated September 27, 2024 (~~the ~~“Subscription~~platform ~~Agreements”)~~collects, ~~with~~ ~~three non-U.S. investors (the “Investors”)~~analyzes, ~~including Zhixin Liu, the Company’s Chairwoman of the Board, Chief Executive Officer, President~~ and ~~Secretary,~~utilizes ~~and~~big Fudata ~~Liu, a Director of the Company, pursuant~~ to ~~which~~forecast ~~the Company agreed to sell~~ and ~~the Investors~~infer ~~agreed to purchase an aggregate of 1,932,224 shares (the “Shares”) of the Company’s common stock, par value~~consumer ~~$0.001~~demands ~~per~~and ~~share (“Common Stock”)~~behaviors, atthereby aproviding ~~purchase~~personalized ~~price~~service ~~of $2~~experiences.06 ~~per~~This ~~share~~supports ~~(the~~new ~~“Purchase~~market ~~Price”),~~paradigms ~~which~~and ~~was~~innovative ~~equal~~customer toacquisition ~~the closing price of the Common Stock on The Nasdaq Capital Market on September 26~~strategies, ~~2024~~enabling ~~(the~~refined “Offering”). Pursuant to the terms of the Subscription Agreements, each Investor was required to pay the Purchase Price for the number of Shares such Investor purchased within 15 business days of September 27, 2024. As of October 15, 2024, the Company had received the Purchase Price from each Investor, representing gross proceeds in the aggregate amount of approximately $4.0 million, and ~~all~~personalized ofmarketing ~~the~~services ~~Shares~~that ~~had~~enhance ~~been~~marketing ~~issued. The proceeds raised in the Offering will primarily be used to support the Company’s future business operations~~effectiveness, ~~including~~reduce ~~investments in acoustic high-tech related products design upgrade~~costs, ~~working capital for mass production~~ and ~~on-line sales, acquiring intellectual property, and~~ ~~working~~boost ~~capital~~customer ~~for the promotion and sales of 5G AI multimodal digital business products~~demand.

~~If deemed~~Through ~~necessary,~~its ~~management~~innovative ~~could~~5G+AI ~~seek~~technology, toDatasea ~~raise~~has ~~additional~~achieved ~~funds~~efficient integration byof ~~the~~multimodal ~~way~~data. ofBy ~~introducing~~utilizing ~~strategic~~cross-modal ~~investors~~semantic orcalibration ~~private~~and ormulti-head ~~public~~cross-attention ~~offerings~~mechanisms, or bythe ~~obtaining~~Company ~~loans~~significantly improves ~~from~~the ~~banks~~accuracy orof ~~others,~~projecting tomultimodal ~~support~~feature ~~the~~spaces ~~Company’s~~while ~~research~~optimizing ~~and~~AI ~~development,~~model ~~procurement~~training costs, ~~marketing~~thereby ~~and~~advancing ~~daily~~its industry-leading ~~operation~~technological position. ~~However, there~~The ~~can~~platform befurther nooptimizes ~~assurance~~resource ~~that~~allocation ~~additional~~and ~~funds~~scheduling ~~will~~through beintelligent ~~available~~algorithms, ~~when~~enabling ~~needed~~real-time monitoring ~~from~~and ~~any~~remediation ~~source~~of ~~or,~~potential ifissues ~~available, will~~in bemarketing ~~available~~applications. onThis ~~terms~~provides ~~that~~enterprises ~~are~~with ~~acceptable~~personalized toand usrefined marketing services, reducing operational risks and enhancing customer satisfaction. WeLeveraging ~~may~~the below ~~required~~latency toand ~~pursue~~high-speed ~~sources~~transmission capabilities of ~~additional~~5G ~~capital~~technology ~~through~~alongside ~~various~~robust ~~means~~AI intelligent analysis, Datasea creates entirely new business models and marketing opportunities for ~~including~~enterprises, ~~debt~~thereby orenhancing ~~equity~~market ~~financings~~competitiveness and driving revenue growth.

Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in the future capital transactions may be more favorable for new investors. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.34

36 II. 5G+AI Product and Application Scenarios

~~Sustainable~~In ~~operation~~the ~~can~~current ~~help~~era ~~enterprises~~of ~~improve~~continuous ~~operating~~digital ~~efficiency,~~transformation ~~enhance~~driven by the ~~competitiveness~~mobile ofinternet, ~~enterprises~~the demand for 5G+AI multimodal digital applications is experiencing explosive growth. Datasea has deeply cultivated its presence in various sectors including finance, entertainment, logistics, agriculture, and ~~enhance~~healthcare. For example, in the ~~market~~media ~~share~~ and entertainment domain, the combination of ~~enterprises~~5G+AI multimodal digital technology delivers a richer user experience. Users can access high-quality media content such as ultra-high-definition videos and interactive entertainment services anytime and anywhere. Moreover, AI algorithms can recommend personalized content based on user interests and behaviors, thereby enhancing user satisfaction and engagement in 5G+AI-related services.

~~Sustainable~~Beyond ~~operation~~these, ~~can~~numerous ~~help~~other ~~enterprises~~industries ~~better~~and ~~control~~scenarios ~~risks~~are urgently in need of intelligent upgrades through technological innovation. Whether it is to boost production efficiency, ~~reduce~~optimize ~~operating~~resource ~~costs~~allocation, ~~and~~improve ~~ensure~~user experience, or create entirely new business models, 5G+AI multimodal digital technology demonstrates enormous potential. As the ~~safety~~technology ofmatures ~~enterprises~~and its application scenarios expand, it is becoming a core driving force for transforming various industries and is opening up broad application spaces.

~~Sustainable~~In ~~operation~~the ~~can~~field ~~help~~of ~~enterprises~~smart ~~enhance~~manufacturing, ~~their~~5G+AI ~~social~~multimodal ~~image~~digital technology promotes the automation and intelligence of production processes. By real-time monitoring and analyzing production data, AI algorithms can optimize production planning, enhance ~~their~~efficiency, ~~sense~~and improve quality. Simultaneously, intelligent AI-based inspections of ~~social~~product ~~responsibility~~samples can quickly detect issues, ensuring product quality remains stable.

~~Sustainable~~In ~~operation~~the realm of smart healthcare, 5G+AI multimodal digital technology has brought revolutionary changes to remote medical services and health management. Physicians can ~~help~~access ~~enterprises~~patients’ ~~better~~medical ~~grasp~~data ~~market~~in ~~opportunities~~real time to perform remote diagnoses and treatments. By integrating multimodal data such as CT scans, ~~grasp~~MRIs, ~~market~~ultrasound ~~trends~~images, and ~~achieve~~pathology aslides ~~win-win~~through ~~situation~~intelligent ~~between~~AI ~~enterprises~~analysis and detection, doctors are assisted in accurately identifying lesions and ~~society~~quickly understanding patient conditions. AI algorithms can also continuously monitor and analyze patients’ health data to provide personalized health management recommendations.

~~Significant Accounting~~The ~~Policies~~application areas of multimodal technology include:

~~Please refer~~1. toSmart ~~our~~Voice ~~significant~~Assistants: ~~accounting~~Combining ~~policies~~speech inrecognition ~~Note~~and 2natural language processing with image or video information (such as screen content) to ~~our~~provide ~~consolidated~~a ~~financial~~more ~~statements~~comprehensive ~~included~~interactive inexperience. ~~this~~For ~~report~~example, a voice assistant can offer more accurate responses and operational suggestions by integrating voice commands with information displayed on the mobile screen.

~~Recent Developments~~2. Image and Video Understanding: By integrating image or video data with textual descriptions, a deeper understanding of content is achieved. This has broad applications in image classification, object detection, and video content analysis. For instance, in autonomous driving, a vehicle can capture image information via cameras and combine it with textual data such as maps and traffic regulations to make more accurate decisions.

On3. ~~July~~Sentiment 2,Analysis: ~~2024,~~Integrating ~~the~~multiple ~~Company~~modalities—such ~~entered~~as ~~into~~textual acontent, ~~securities~~vocal ~~purchase~~tone, ~~agreement~~and ~~(the~~facial ~~“Purchase Agreement”)~~ expressions—to ~~issue~~perform ~~and~~sentiment ~~sell~~analysis. ~~to an~~This ~~investor~~aids in abetter ~~registered~~understanding ~~direct~~emotional ~~offering (the “Registered Direct Offering”) 179~~states,~~400~~ ~~shares~~which ofis ~~Common~~crucial ~~Stock~~for atcustomer ~~$3.25~~service ~~per share~~ and ~~pre-funded~~social ~~warrants~~media ~~to purchase up to 512,908 shares of Common Stock at $3~~monitoring.~~24 per share with an exercise price of $0.01 per share (the “Pre-Funded Warrants”).~~

~~The~~4. ~~securities~~Education inand ~~the~~Training: ~~Registered~~Creating ~~Direct~~immersive ~~Offering~~learning ~~were~~environments ~~issued~~by ~~under~~merging ~~the~~text, ~~Company’s~~images, ~~shelf~~audio, ~~registration~~and ~~statement~~video onelements ~~Form~~to ~~S-3~~enhance ~~(File No~~educational outcomes. ~~333-272889)~~For example, ~~filed~~virtual ~~with~~laboratories ~~the~~can ~~SEC~~simulate onexperimental ~~June~~scenarios ~~23,~~combined ~~2023,~~with ~~and~~textual ~~declared~~explanations ~~effective~~and onaudio ~~July~~narrations ~~21,~~to ~~2023.~~help Astudents ~~prospectus~~better ~~supplement~~understand ~~was~~experimental ~~filed~~principles ~~with the~~and ~~SEC on July 3, 2024~~procedures.

~~The~~5. ~~Pre-Funded~~Healthcare: ~~Warrants~~In ~~are~~the ~~exercisable~~medical ~~upon~~field, ~~issuance~~multimodal ~~and~~technology ~~remain~~can sobe ~~until~~used ~~fully~~for ~~exercised.~~disease Ifdiagnosis, ~~the~~medical ~~Company~~image ~~fails to~~analysis, ~~deliver~~and ~~shares~~patient ~~upon~~monitoring. ~~valid~~For ~~exercise~~example, ofdoctors ~~the~~can ~~Pre-Funded~~integrate ~~Warrants~~patient history, itmedical ~~must~~images ~~pay~~(such ~~the~~as ~~holder~~X-rays ~~liquidated~~and ~~damages~~CT asscans), ~~outlined~~and inphysiological ~~the~~data ~~warrants. The~~(such ~~warrants~~as ~~also~~heart ~~provide~~rate ~~customary~~and ~~buy-in~~blood ~~rights~~pressure) ~~should~~to ~~the~~make ~~Company~~more ~~fail~~accurate todiagnoses ~~deliver~~and ~~shares~~develop ~~within~~effective ~~specified~~treatment ~~timeframes~~plans.

Under the Pre-Funded Warrants’ terms, a holder may not exercise the warrant if it would result in ownership of more than 4.99% of the outstanding shares of Common Stock, unless the holder elects to increase this limit to 9.99% with 61 days’ notice to the Company.35

~~Under the~~6. ~~Purchase~~Advertising ~~Agreement,~~and ~~the~~Marketing: ~~Company~~By ~~agreed~~analyzing ~~not~~consumers’ tomultimodal ~~issue~~data, ~~enter~~such ~~into~~as ~~any~~browsing ~~agreement to issue~~behavior, orpurchase ~~announce the issuance or proposed issuance of any Common Stock or equivalents~~history, ~~nor~~and tosocial ~~file~~media ~~any new registration statement~~activities, ~~for~~along 60with ~~days after~~ the ~~Registered~~content ~~Direct~~and ~~Offering’s closing.~~format ~~The~~of ~~Company~~advertisements, ~~also~~more ~~agreed~~precise ~~not~~ad totargeting ~~enter~~and ~~into~~marketing ~~any~~strategies ~~variable~~can ~~rate~~be ~~transactions while the investor holds any pre-funded warrants~~developed.

~~The~~7. ~~Registered~~Virtual ~~Direct~~Reality ~~Offering~~and ~~closed~~Augmented onReality: ~~July~~Merging 3,virtual ~~2024,~~or ~~with~~augmented ~~gross~~information ~~proceeds~~with ofreal-world ~~approximately~~scenes ~~$2.25 million, before deducting fees payable~~ to ~~the~~provide ~~Placement~~users ~~Agent~~with ~~and~~immersive ~~other expenses~~experiences. ~~The~~Multimodal ~~Company~~technology ~~intends~~plays toa ~~use~~vital ~~the~~role ~~net~~in ~~proceeds~~scene ~~for R&D~~understanding, ~~market~~interaction ~~development~~design, and ~~general~~content ~~corporate purposes~~generation.

In8. ~~connection~~Security ~~with~~Surveillance: ~~the~~Integrating ~~Registered~~video ~~Direct Offering~~surveillance, ~~the~~audio ~~Company~~monitoring, ~~entered~~and ~~into~~data aanalytics ~~placement~~to ~~agency~~enhance ~~agreement~~security ~~(the “Placement Agency Agreement”) with EF Hutton LLC on July 2, 2024~~measures. ~~Under~~For ~~this agreement~~instance, ~~the~~an ~~Company~~intelligent ~~will~~monitoring ~~pay~~system ~~the~~can ~~Placement~~recognize ~~Agent~~abnormal abehavior, ~~cash~~sounds, ~~fee of 6.5% of the gross proceeds~~ and ~~reimburse~~visual ~~expenses~~features up to ~~$75,000~~promptly issue alerts.

~~Additionally~~In summary, asmultimodal atechnology ~~condition~~holds toextensive ~~the~~prospects ~~closing~~across ofnumerous ~~the Purchase Agreement~~fields, ~~the~~offering ~~Company’s~~richer ~~officers~~ and ~~directors~~smarter ~~entered~~services ~~into~~and ~~“lock-up”~~experiences. ~~agreements,~~As ~~prohibiting~~the ~~them~~technology ~~from~~continues ~~disposing~~to ofevolve, ~~any~~its ~~Company~~applications ~~securities~~will ~~for~~expand 60further, ~~days~~driving ~~from~~innovation ~~the~~and ~~Registered~~transformation ~~Direct~~across ~~Offering’s closing date, subject to certain exceptions~~industries.

As disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2024, the Company entered into subscription agreements dated September 27, 2024 (the “Subscription Agreements”) with three non-UIII.~~S. investors, including Zhixin Liu, the Company’s Chairwoman, CEO, President, and Secretary, and Fu Liu, a Director~~ ofValue ~~the Company. Under these agreements, the Company agreed to sell, and the Investors agreed to purchase, a total~~ of ~~1,932,224~~5G+AI ~~shares of~~Multimodal ~~common~~Digital stock, par value $0.001 per share (“Common Stock”), at a purchase price of $2.06 per share, which was the closing price on the Nasdaq Capital Market as of September 26, 2024 (the “Offering”). Each Investor was required to pay for their Shares within 15 business days of September 27, 2024.Products

AsDatasea’s of5G+AI ~~October~~multimodal ~~15,~~digital ~~2024,~~business ~~the~~currently ~~Company~~operates ~~received~~a ~~the~~core ~~purchase~~platform ~~price~~that ~~from~~serves ~~each~~high-demand ~~Investor,~~sectors ~~totaling~~such ~~approximately~~as ~~$4.0~~banking, ~~million~~insurance, gaming, and ~~all~~news ~~Shares have~~apps, ~~been~~while ~~issued.~~also ~~The~~offering ~~proceeds~~intelligent ~~from~~system ~~the~~solutions ~~Offering~~spanning ~~will~~multiple ~~primarily~~industries—including ~~support~~small ~~the~~and ~~Company’s~~micro ~~future operations~~enterprises, ~~including investments~~ inrural ~~high-tech~~revitalization, ~~acoustic~~logistics ~~product~~and ~~design~~express ~~upgrades~~delivery, ~~mass~~and ~~production,~~healthcare. ~~online~~This ~~sales,~~comprehensive IPdigital ~~acquisition,~~ecosystem ~~and~~is ~~marketing~~designed ~~for~~to ~~its~~facilitate the 5Gdigital AItransformation ~~multimodal digital~~of ~~business~~various ~~products~~industries.

37 1. 5G+AI Across Multiple Industries, Driving Digital Transformation Through partnerships with mobile network operators, Datasea provides traffic benefits and technical services to industry clients in sectors such as logistics, banking, insurance, gaming, news apps, and healthcare. These clients can leverage Datasea’s 5G+AI platform and system APIs to cascade and distribute benefits such as point redemption and traffic incentives directly to end users’ mobile devices. This multi-scenario support effectively drives digital transformation across a wide range of industries.

~~Results~~2. 5G+AI Servicing Over 124 Million Individual Businesses and 52 Million Industry Enterprises Datasea’s 5G+AI multimodal digital products are widely deployed in the Chinese market, delivering digital and intelligent services to over 52 million small and micro enterprises—of ~~Operations~~which more than 99% are small and micro enterprises—across industries such as financial services, entertainment, agriculture, and express logistics. Moreover, these products cater to a large number of individual business operators in the healthcare and related sectors. As of the end of 2023, there were over 124 million registered individual business operators in China, representing 67.4% of the total market entities in the country, and provided employment opportunities for nearly 300 million people. Datasea’s products offer highly personalized digital solutions tailored to these sectors, supporting the intelligent upgrading of offline stores and assisting individual operators in expanding their online business and improving operational efficiency. In summary, Datasea’s 5G+AI multimodal digital innovations, products, and services effectively elevate the digital capabilities of China’s major industries, reducing energy consumption while enhancing efficiency, and accelerating the nation’s transition towards smart and digital operations.

~~Comparison of~~3. ~~the~~Cross-Industry ~~three~~Applications ~~months~~and ~~ended~~Innovative ~~September~~5G+AI 30Solutions By leveraging cloud computing and a SaaS operational model, ~~2024~~Datasea’s 5G+AI multimodal digital platform supports cross-industry application scenarios, delivering innovative solutions for sectors such as rural revitalization, logistics and ~~2023~~express delivery, and healthcare. These innovative services help clients achieve intelligent operations and optimize resource utilization, effectively reducing costs, enhancing market competitiveness, and generating more business opportunities and customer satisfaction.

~~The following~~4. ~~table~~5G+AI ~~sets~~Multimodal ~~forth~~Digital ~~the~~Intelligent ~~results~~Service ofSystem ~~our~~for ~~operations~~Comprehensive Digital Applications Datasea’s 5G+AI multimodal digital technology not only provides clients with novel solutions for brand building, customer acquisition, and marketing, but also drives revenue growth by helping clients stand out in highly competitive markets. Benefiting from the ~~three~~low ~~months~~latency ~~ended~~and ~~September~~high-speed 30transmission capabilities of 5G, ~~2024~~Datasea’s products enable real-time data interaction and ~~2023~~support large-scale, ~~respectively~~customized multi-channel content distribution, ~~indicated as~~creating aentirely ~~percentage~~new business models and marketing opportunities. As technology evolves and application scenarios expand, Datasea will continue to lead industry innovation and drive intelligent transformation across more sectors. The platform’s innovative technical architecture propels the digital transformation and service upgrade of ~~net~~multiple ~~sales~~industries. ~~Certain~~By ~~columns~~leveraging ~~may~~advanced ~~not~~AI ~~add~~processing uptechnologies, ~~due~~it can intelligently generate and process various forms of data—including audio, text, images, and video—while integrating cross-modal semantic calibration and multi-head cross-attention mechanisms to ~~rounding~~achieve efficient fusion and precise analysis of multimodal data. Through hierarchical contrastive learning frameworks and twin-tower architectures, the platform efficiently embeds heterogeneous data, enhances the accuracy of multimodal feature space projections, and significantly reduces the cost of AI model training and deployment.

	2024			% of Revenues			2023			% of Revenues
Revenues	$	21,081,094					$	6,880,743
Cost of revenues		20,884,113			99.1	%		6,806,008			98.9	%
Gross profit		196,981			0.9	%		74,735			1.1	%
Selling expenses		996,049			4.7	%		84,447			1.2	%
Research and development		103,079			0.5	%		155,004			2.3	%
General and administrative expenses		1,128,403			5.4	%		693,060			10.1	%
Total operating expenses		2,227,531			10.6	%		932,511			13.6	%
Loss from operations		(2,030,550	)		(9.6	)%		(857,776	)		(12.5	)%
Non-operating income (expenses), net		59,881			0.3	%		(7,758	)		(0.1	)%
Loss before income taxes		(1,970,669	)		(9.3	)%		(865,534	)		(12.6	)%
Income tax expense		-			-	%		-				%
Loss before noncontrolling interest from continuing operation		(1,970,669	)		(9.3	)%		(865,534	)		(12.6	)%
Income before noncontrolling interest from discontinued operation		-			-	%		833,546			12.1	%
Less: loss attributable to noncontrolling interest from continuing operation		(8,680	)		(0.04	)%		(9,932	)		(0.1	)%
Net loss to the Company from continuing operation		(1,961,989	)		(9.3	)%		(855,602	)		(12.4	)%
Net income (loss) to the Company from discontinued operation		-			-	%		833,546			12.1	%
Net loss to the Company	$	(1,961,989	)		(9.3	)%		(22,056	)		(0.3	)%

~~Revenues~~To address the shortage of high-quality training data, Datasea is actively exploring synthetic data applications—data that is cost-effective and highly customizable, while effectively addressing privacy concerns and supporting the training needs of large AI models. In particular, the application of AI digital human technology in marketing enables the platform to automate promotion, intelligently generate content, and efficiently transmit information, thereby enabling precision marketing and reducing operational risks.

WeMoreover, ~~had~~Datasea’s ~~revenues~~intelligent ofanalytics ~~$21,081,094~~can monitor and ~~$6,880,743~~optimize ~~for~~applications ~~the~~in ~~three~~real ~~months ended September 30~~time, ~~2024~~predict and ~~2023,~~remediate ~~respectively~~potential issues, ~~which~~and enhance ~~shows~~operational aefficiency ~~$14,200,351 increase~~and byservice ~~comparing~~responsiveness. ~~with~~By ~~the~~leveraging ~~same~~big ~~period~~data ~~of 2023~~analytics, ~~an increase of 206.4% over~~ the ~~same~~platform ~~period~~provides ~~last~~personalized ~~year. The increase in revenues was~~customer ~~mainly~~experiences, ~~due~~helps toenterprises ~~the~~accurately ~~rapid~~understand ~~increase~~consumer ~~of 5G AI multimodal digital business in China. For the three months ended September 30~~demands, ~~2024,~~and ~~revenues mainly~~drives ~~consisted~~refined ofand ~~service~~individualized ~~fees~~marketing ~~from~~strategies ~~our 5G AI Multimodal digital. The company’s 5GAI multimodal digital business is an industry~~that ~~leader,~~lower costs and ~~the~~boost ~~continued expansion of the company’s~~ customer ~~base supports the continued significant improvement of the business~~loyalty.

~~From~~Furthermore, ~~July~~by 1,combining ~~2024~~the tolow ~~September~~latency ~~30,~~and ~~2024,~~high-speed ~~the~~transmission ~~Company~~of ~~generated~~5G ~~revenue~~with ofour ~~$21,081,094,~~AI ~~including~~and ~~$21~~multimodal technologies,~~075,584~~ ~~from~~we ~~the~~not 5Gonly AIoptimize ~~multimodal digital~~real-time ~~business,~~data ~~$3,046~~interaction ~~from~~and ~~Smart~~multi-channel ~~City~~content ~~Business,~~distribution ~~$2,464~~but ~~from~~also ~~Acoustic~~provide ~~Intelligence~~enterprises ~~Business.~~with ~~From~~entirely ~~July~~new 1,business ~~2023~~models toand ~~September~~marketing opportunities. ~~30,~~This ~~2023,~~strengthens ~~the~~market ~~Company generated~~competitiveness and drives revenue ofgrowth. ~~$6,880,743,~~This ~~including~~represents $6a transformative industrial innovation,~~880,463~~ and ~~from~~as the 5Gtechnology ~~messaging~~continues ~~business~~to evolve, Datasea will persist in leading innovation and ~~$280~~driving ~~from~~intelligent ~~the~~transformation ~~acoustic~~across ~~intelligence~~an ever-expanding range of sectors.

~~This is~~IV. ~~inseparable from the Company’s research and development support and personnel support over the years, the Company’s upstream~~Recent ~~and~~Developments ~~downstream~~in ~~chain maintenance and experience accumulation and precipitation eventually formed a huge loyal customer base, but also closely related to~~ the ~~thriving vitality of the~~ 5G+AI ~~market.~~Business

~~Through its~~1. ~~own~~Ongoing ~~sales~~Service ~~team,~~Provision ~~the~~for ~~Company~~Key ~~vigorously promotes and publicizes its research and development results and technology display in~~ 5G+AI ~~sales, actively~~Customer participates in important seminars and business fairs around the country, and deeply explores the target customers related to 5G news. Through painstaking efforts and keen business acumen, we have actually obtained a stable customer flow.Contracts

~~The~~On ~~Company’s~~August ~~top~~12, ~~five~~2024, ~~customers~~Datasea ~~for~~Information 5GTechnology AICo., ~~multimodal~~Ltd. ~~digital~~(“Datasea ~~business~~Beijing”), atHeilongjiang ~~this~~Xunrui ~~stage~~Technology ~~are~~Co., ~~Xiamen~~Ltd. ~~Duoqiao~~(“Xunrui Technology”), ~~Mai~~Datasea ~~Network~~Jingwei (Shenzhen) Information Technology Co., ~~LTD~~ Ltd. (“Datasea Jingwei”), ~~Hainuo~~Guozhong ~~Xintong~~Haoze (~~Qingdao~~Beijing) ~~Network~~ Technology Co., ~~LTD~~Ltd. (“Guozhong Haoze”), ~~Qingdao~~and ~~Osaidi~~Guozhong ~~Network~~Times (Beijing) Technology Co., ~~LTD~~Ltd., (“Guozhong Times”) entered into an agreement with Qingdao ~~Ruicheng~~Ruizhi ~~Lida~~Yixing ~~Network~~ Information Technology Co., ~~LTD~~Ltd., ~~and~~(“Ruizhi ~~Weihai~~Yixing”). ~~Hongyun~~The ~~Shihao~~agreement ~~Information~~stipulates the ~~Technology~~purchase Coof 5G+AI multimodal data recharge cards with face values ranging from RMB 10 to RMB 500 (approximately USD 1.,38 ~~LTD~~to USD 69.4) over a 12-month period from the effective date of the agreement. ~~Through~~From ~~close~~July ~~business~~1, ~~cooperation~~2024, ~~the~~to ~~above~~December ~~customers~~31, 2024, revenue from Ruizhi Yixing ~~have~~reached ~~become~~RMB ~~stable~~202,257,275.29 ~~and~~(approximately ~~loyal~~USD ~~partners~~28.338 million). As of ~~the~~January ~~Company~~31, ~~and~~2025, ~~will~~Datasea’s ~~work~~operating ~~together~~entities in ~~the~~China ~~future~~have received a prepayment of around RMB 2.5 million (approximately USD 350,000) from Ruizhi Yixing.

InOn ~~terms~~August of9, ~~marketing promotion~~2024, ~~the~~Datasea ~~Company~~Beijing ~~has~~signed ~~hired~~an aagreement ~~professional~~with ~~cooperative~~Shanghai ~~marketing~~Shixun ~~team~~Network toTechnology ~~introduce~~Co., ~~and~~Ltd. ~~recruit~~(“Shixun ~~suitable and high-quality~~Network”), ~~stable~~under ~~customers~~which, for ~~the~~a ~~Company.~~12-month ~~From~~period from the ~~fourth~~effective ~~quarter~~date, ofShixun ~~2023,~~Network ~~the~~will ~~sales~~purchase of5G+AI ~~the~~multimodal ~~Company’s~~data 5Gcards ~~Multimodal~~with ~~communication~~face ~~business~~values ~~has~~ranging ~~witnessed~~from ~~explosive~~RMB ~~growth,~~10 ~~and~~to ~~the~~RMB ~~sales~~500 in(approximately ~~the~~USD ~~second~~1.38 ~~quarter~~to ofUSD 69.4). Between July 1, 2024, ~~have~~and ~~significantly~~December ~~increased~~31, ~~compared~~2024, ~~with~~revenue ~~the~~from ~~previous~~Shixun Network ~~quarter~~reached RMB 10,981,054 (approximately USD 1.538 million).

AtFrom ~~present~~August 9, ~~the~~2024, ~~Company’s~~to ~~research~~October ~~and~~18, ~~development~~2024, ~~technology~~Datasea inBeijing, 5GHeilongjiang AIXunrui, ~~multimodal~~and ~~digital~~Guozhong isTimes ~~leading~~signed inan ~~the~~agreement ~~industry.~~with ~~After~~Wuhan ~~long-term~~Xiaoming ~~expansion~~Technology ~~of customer groups~~Co., itLtd. ~~has~~(“Xiaoming ~~formed a stable customer group~~Technology”). AtUnder ~~present~~this agreement, ~~the~~over ~~Company~~a ~~has~~12-month ~~also~~period ~~hired~~from aits ~~professional~~effective 5Gdate, ~~Multimodal~~Xiaoming ~~communication~~Technology ~~business~~will ~~promotion~~purchase ~~team. We signed~~ 5G+AI ~~communication~~multimodal ~~marketing~~data ~~service~~recharge ~~agreements~~cards with ~~some~~face ~~marketing~~values ~~companies~~ranging ~~that~~from ~~have many~~RMB ~~years~~10 ofto ~~advantages~~RMB in500 ~~iot~~(approximately ~~market~~USD ~~development, operation and promotion services, have effective integration with mobile Internet~~1.38 ~~enterprises, iot industry chain and other resources, and have strong channel expansion and sales and operation capabilities~~ to ~~carry~~USD ~~out in-depth cooperation~~69.4). ~~This~~From ~~business~~July ~~segment belongs to the stable growth of the company’s business~~1, ~~and in the future~~2024, ~~the company will continue~~ to ~~grow~~December ~~steadily~~31, ~~steadily~~2024, ~~and~~revenue ~~rapidly~~from inXiaoming ~~the~~Technology 5Greached AIRMB ~~multimodal~~20,521,919.34 ~~digital~~(approximately ~~business~~USD 2.875 ~~segment~~million).

38 37

~~Cost~~From August of8, ~~Revenues~~2024, to September 24, 2024, Guozhong Times together with Guozhong Haoze entered into an agreement with Xinyi Xinfanfa Information Technology Co., Ltd. (“Xinfanfa Technology”), under which, over a 12-month period from the effective date, Xinfanfa Technology will purchase 5G+AI multimodal data recharge cards with face values ranging from RMB 10 to RMB 500 (approximately USD 1.38 to USD 69.4). From July 1, 2024, to December 31, 2024, revenue from Xinfanfa Technology reached RMB 31,339,773 (approximately USD 4.391 million).

WeFrom ~~recorded~~October ~~$20~~8,~~884,113~~ ~~and $6~~2024,~~806,008~~ ~~cost~~to ofNovember ~~revenues for the three months ended September 30~~11, 2024, ~~and~~Datasea ~~2023~~Beijing, ~~respectively~~Guozhong Haoze, ~~which~~and ~~shows a~~Guozhong ~~$14,078,105~~Times ~~increase~~signed byan ~~comparing~~agreement with ~~the~~Jiajie ~~same~~Technology Co., ~~period of 2023~~Ltd. ~~For~~(“Jiajie”), ~~the~~under ~~three~~which, ~~months~~over ~~ended~~a ~~September~~12-month ~~30,~~period ~~2024,~~from ~~cost~~the ofeffective ~~revenues~~date, ~~was mainly~~Jiajie ~~the~~will 5Gpurchase 5G+AI multimodal data ~~digital~~recharge ~~platform~~cards ~~fees~~with ~~and~~face ~~Cloud~~values ~~Platform~~ranging ~~construction~~from toRMB ~~suppliers.~~10 ~~The~~to ~~increase~~RMB in500 ~~cost~~(approximately ofUSD ~~revenues~~1.38 ~~was due mainly~~ to ~~the~~USD ~~increased revenue of 5G AI multimodal digital~~69.4). ~~For~~From ~~the~~July ~~three months ended September 30~~1, 2024, ~~the~~to ~~cost of 5G AI multimodal~~December ~~digital was $20.88 million~~31, ~~the cost of smart city was $1~~2024,~~716~~ ~~and~~revenue ~~the~~from ~~cost~~Jiajie ofreached ~~Acoustic~~RMB ~~Intelligence business was $409. For the three months ended September 30~~23, ~~2023~~843,723 ~~the~~(approximately ~~cost~~USD ~~of 5G messaging was $6~~3.~~81million,~~341 ~~and the cost of intelligent acoustics business was $141~~million).

~~Gross~~2. ~~Profit~~New Customer Agreements and Efficient Service Delivery This Quarter On November 1, 2024, Guozhong Haoze signed an agreement with Nanjing Linghui Information Engineering Co., Ltd. (“Linghui Information”), under which, upon the agreement’s effective date, two software copyrights were purchased for a total price of RMB 2,333,451. As of December 31, 2024, revenue from Linghui Information reached RMB 2,333,451 (approximately USD 327,000).

~~Gross profit~~3. ~~for~~Market Achievements in the ~~three~~5G+AI ~~months~~Business ~~ended~~Datasea’s ~~September~~5G+AI ~~30,~~multimodal ~~2024~~digital ~~was~~platform ~~$196~~offers comprehensive and intelligent digital solutions to a wide range of industries,~~981~~ ~~compared~~spanning from small and micro enterprises to ~~$74~~large industry clients. By deeply integrating advanced AI technologies with the inherent capabilities of 5G networks,~~735~~ Datasea not only optimizes service processes but also innovates business models, driving sustained growth for its clients. During the ~~three~~reporting ~~months~~period, ~~ended~~the ~~September~~Company’s 30primary revenue was derived from service fees associated with 5G+AI multimodal digital business services. From July 1, ~~2023~~2024, ~~which shows~~to aDecember ~~$122~~31,~~246~~ ~~increase~~2024, byrevenue ~~comparing~~reached ~~with~~USD 41.16 million, representing a 126.70% increase compared to the same period ofin 2023. ~~The~~This ~~increase~~revenue ingrowth ~~gross~~is ~~profit was~~ mainly ~~due~~attributable to the ~~increase~~rapid inexpansion ~~sales for~~of China’s 5G+AI multimodal digital business, which has maintained a leading position within the ~~three~~industry. ~~months~~The ~~ended~~continuously ~~September~~growing ~~30,~~customer ~~2024~~base has further supported the Company’s significant business expansion.

~~Gross margin~~The Company is ~~0.9%~~currently ~~and~~fulfilling ~~1.1%~~service ~~for~~obligations ~~the~~not ~~three~~yet ~~months~~recognized as ~~ended~~revenue ~~September~~in ~~30,~~the ~~2024~~current ~~and~~fiscal ~~2023.~~year, ~~The~~with ~~decrease~~the intotal ~~gross~~value ~~margin~~of ~~was~~service ~~mainly~~contracts ~~due~~expected to ~~the~~exceed ~~lower gross~~USD ~~profit~~100 ~~margin~~million ofin 5Gfuture ~~AI multimodal digital service~~financial statements.

~~Measures~~ESG Management to– ~~improve~~Quarterly ~~the gross profit margin of enterprises:~~Update

1.During this ~~Reasons~~quarter, ~~for~~Datasea ~~the~~continued ~~Company’s~~to ~~choice~~deepen ofits ~~temporary~~Environmental, ~~cost~~Social, ~~leadership~~and ~~strategy:~~Governance ~~Due~~(ESG) tomanagement ~~the~~framework, ~~fierce~~further ~~competition~~implementing its incommitment ~~the~~to 5Gsustainable AIdevelopment ~~multimodal~~and ~~digital~~achieving ~~business~~substantive ~~market,~~progress ~~the~~across ~~Company~~multiple ~~has~~areas. ~~established~~Compared awith ~~good~~the ~~cooperative~~previous ~~relationship~~quarter, this ~~with~~quarter’s ~~major~~ESG ~~customers~~initiatives inplace ~~order~~greater toemphasis ~~quickly~~on ~~occupy~~practical ~~the~~outcomes ~~market,~~and ~~promote~~operational ~~the~~feasibility, ~~Company’s~~aiming 5Gto AIdrive ~~multimodal~~change in ~~digital~~the ~~business,~~details and ~~temporarily~~ensure ~~yield~~that ~~profits~~every atmeasure ~~this~~delivers ~~stage,~~tangible ~~which~~environmental isand asocial ~~period of market expansion~~benefits.

2.First, ~~Sales~~in ~~rebate~~the area of supply chain management, Datasea not only continued its rigorous evaluation of supplier environmental responsibility and ~~marketing~~social ~~reasons:~~impact Inas in the ~~marketing~~previous ofquarter 5Gbut AIalso ~~multimodal~~further ~~digital~~refined its ~~business~~assessment criteria. This quarter, ~~centralized~~the ~~procurement~~Company isspecifically ~~made~~focused ~~for~~on ~~customers~~the “production waste recycling rate” in suppliers’ manufacturing ~~prepaid~~processes, ~~accounts~~requiring suppliers to ~~ensure~~provide ~~the~~detailed ~~security~~data ofreports ~~the~~and ~~Company’s~~to ~~funds~~undergo regular on-site audits. AtThrough ~~this~~these ~~stage~~measures, Datasea ~~sales~~successfully tomotivated ~~customers~~several ~~have~~suppliers ato ~~certain~~improve ~~amount~~their ofproduction ~~sales~~processes ~~rebates~~ and ~~marketing~~reduce ~~expenses~~waste emissions.

3. According to the progress of the Company’s strategic development, the cost of marketing promotion and sales rebate will be reduced and the gross profit rate will gradually increase after the customer group is stable and competitive.38

4.Second, ~~The~~in ~~Company~~optimizing ~~vigorously~~the ~~expands~~office 5Genvironment, Datasea’s ~~related~~Shenzhen ~~businesses~~subsidiary, ~~the~~Datasea ~~most~~Jingwei, ~~important~~implemented ~~purpose~~a isseries of pragmatic energy-saving measures this quarter. In addition to ~~obtain~~its ~~market~~existing ~~traffic~~smart lighting and ~~improve~~high-efficiency ~~market~~air ~~brand~~conditioning ~~influence.~~systems, Itthe ~~can~~Company ~~let~~introduced ~~more~~solar ~~people~~power ~~know~~generation ~~about~~equipment so that a portion of the ~~Company~~office’s electricity demand is now met by renewable energy. At the same time, ~~and~~the ~~increase~~Company upgraded its ~~exposure~~waste segregation ~~and~~system ~~visibility.~~in 5Gthe ~~related~~office ~~services~~area ~~have~~by ~~become~~adding amore ~~tool~~recycling points and regularly organizing employee training sessions to ~~attract~~enhance ~~traffic~~environmental awareness. These initiatives not only reduced the building’s energy consumption and ~~improve~~carbon ~~brands,~~emissions ~~which~~but ~~can~~also ~~drive~~significantly ~~revenue~~decreased the generation of ~~other~~daily ~~projects~~operational waste.4.

5.Third, ~~Actively~~Supporting ~~carrying~~Employee ~~out~~Growth: 5GThe AICompany provides ~~multimodal~~a ~~digital~~platform ~~related~~for ~~business~~employee ~~can~~development, ~~attract~~ensuring ~~more~~that ~~users’~~every ~~attention~~employee ~~and~~finds ~~establish~~personal avalue ~~good~~within ~~interactive~~the ~~relationship~~organization. ~~with~~It ~~users,~~helps ~~which~~talented employees ~~can~~enhance ~~firmly~~their ~~obtain~~skills aand ~~large~~achieve ~~number~~excellence ofwhile ~~loyal~~actively ~~long-term~~building ~~user~~an ~~groups~~international ~~for~~talent pool to drive the ~~company~~Company’s sustainable development. Against this backdrop, ~~which~~the ~~has~~Company ~~great~~dispatched ~~potential~~Ms. ~~for~~Li usHuan, Deputy General Manager of the R&D Department, to ~~expand~~Austria ~~other~~for ~~revenue~~further ~~businesses~~studies and ~~obtain~~to acquire new ~~profit~~technological ~~growth~~knowledge. ItMs. ~~can~~Li ~~drive~~Huan ~~business~~published ~~and~~a ~~revenue~~paper ~~expansion~~on the application of digital technology in 5Gthe ~~refueling~~renowned ~~cards,~~European 5Gjournal ~~Internet~~Journal of ~~Things~~Hydrology, receiving industry acclaim. This achievement has provided new support for the continuous development and ~~other~~upgrade ~~fields~~of the Company’s foundational technology.

6.Furthermore, ~~Upgrade~~Datasea ~~the~~launched ~~business~~an ~~model,~~Internal ~~add~~ESG Action ~~new~~Points ~~acoustic~~Program ~~intelligent~~this ~~products~~quarter, ~~different~~encouraging ~~industry~~employees ~~application~~to ~~fields~~practice ESG principles in their daily work. Employees can earn points by participating in activities such as energy conservation, waste sorting, and ~~high~~green ~~additional~~commuting, ~~fields~~which tocan ~~improve~~then be redeemed for eco-friendly products or charitable donations. This initiative not only enhances employee engagement but also further promotes the ~~gross~~development ~~profit~~of ~~margin~~a strong ESG culture within the Company.

39 Finally, Datasea initiated an ESG Data Transparency Platform this quarter to regularly disclose the Company’s key performance indicators (KPIs) in environmental, social, and governance areas to both internal and external stakeholders. Through this platform, the Company can clearly demonstrate the effectiveness of its ESG initiatives and adjust its strategies in a timely manner to ensure that all measures remain aligned with its long-term sustainable development goals.

~~From the perspective of market prospects~~Overall, ~~according to the prediction of Global Association for Mobile Communication Systems, by 2025, the~~ ~~number~~this ofquarter’s 5GESG ~~connections~~management inhas ~~China~~placed ~~will~~a ~~exceed~~stronger ~~the~~emphasis ~~sum~~on ofpractical ~~North~~outcomes ~~America~~ and ~~Europe,~~employee ~~ranking first in the world~~participation. ~~The~~Through ~~number~~a series of 5Gpragmatic ~~connections will reach 460 million~~measures, ~~accounting~~Datasea ~~for~~has ~~28%~~not ofonly ~~the~~further ~~total~~reduced ~~connections~~its inoperational ~~the~~environmental ~~country.~~impact 5Gbut ~~messaging~~also ~~has~~enhanced ~~become~~environmental ~~an international standard.2~~awareness ~~China~~among ~~will~~employees ~~become~~and ~~one~~suppliers, ofsetting ~~the~~a ~~largest~~new ~~single~~benchmark ~~contributors~~for tosustainable ~~the~~development ~~global growth of mobile internet users~~ in the ~~coming years, accounting for nearly 20% of the total global increase~~industry.

~~Combining~~Going the advantages of “Internet of Things+” intelligent terminals and 5G messaging industry chain, Shuhai Beijing is advancing with the time, taking the train of the 5G era, and developing 5G Multimodal communication/phone top up business. At this stage, Shuhai Beijing is carrying out the development, operation and promotion services of the Internet of Things market and increasing the effective combination of resources with Mobile Internet enterprises and the Internet of Things industrial chain.Concern

InThe ~~2023,~~accompanying ~~the~~unaudited 5Gconsolidated AIfinancial ~~multimodal~~statements ~~digital~~were ~~business~~prepared assuming ofthe ~~Shuhai~~Company ~~Information~~will ~~accounts~~continue ~~for~~as a ~~relatively~~going ~~big~~concern, ~~proportion~~which contemplates continuity of ~~the total revenue~~operations, ~~because, at~~realization ~~this~~of ~~stage~~assets, ~~the~~and ~~business~~liquidation ~~belongs~~of toliabilities in the ~~early~~normal ~~stage~~course of business. For the three ~~development,~~months ~~operation~~ended ~~and~~December ~~promotion~~31, ~~services~~2024 ofand 2023, the ~~Internet~~Company ofhad ~~Things market,~~a ~~and~~net ~~the~~loss ~~investment~~of inapproximately ~~all~~$1.14 ~~aspects~~million isand ~~large~~$1.83 ~~In addition~~million, respectively. For the ~~gross~~six ~~profit~~months ofending ~~the~~December ~~traffic~~31, ~~top~~2024 upand ~~business~~2023, isthe ~~generally~~Company ~~low.~~had As a ~~result,~~net ~~the~~loss ~~annual~~of ~~gross~~approximately ~~profit~~$3.10 ~~margin~~million ~~decreased~~and ~~from~~$1.86 ~~the previous year~~million. The Company’s ~~focus~~had inan ~~this~~accumulated ~~business~~deficit isof toapproximately ~~integrate new~~$42.54 ~~resources,~~million ~~expand~~as ~~new~~of ~~businesses~~December ~~related~~31, ~~to 5G~~2024, ~~combine~~and ~~the~~negative ~~Company’s~~cash ~~years~~flow offrom ~~deep~~operating ~~cultivation~~activities of ~~and~~approximately ~~accumulation~~$1.59 inmillion ~~5G news,~~ and ~~take~~$5.63 ~~this~~million ~~opportunity~~for tothe ~~open~~six upmonths ~~more~~ended ~~5G-related~~December ~~businesses~~31, to2024 ~~increase the Company’s revenue~~ and ~~new~~2023, ~~business~~respectively.

InThe ~~China’s~~historical ~~mature~~operating ~~and~~results ~~transparent~~indicate ~~market~~the ~~today,~~Company ~~gross~~has ~~margins~~recurring onlosses ~~services~~from ~~are~~operations ~~far~~which ~~greater~~raise ~~than~~the ~~those~~question onrelated ~~hardware~~to ~~sales. The improvement of gross profit margin shows that~~ the Company’s ability ~~measures~~ to ~~improve~~continue ~~gross~~as ~~profit~~a ~~margin~~going ~~are~~concern ~~gradually~~although ~~showing~~the ~~effect:~~range ~~1) costs will be reduced by economic scale over a larger number~~ of ~~customers~~such ~~base~~recurring ~~and~~operating ~~the~~losses ~~increase~~has narrowed in ~~production;~~recent 2)years. ~~the~~There ~~Company, by adopting the differentiation~~can ~~strategy,~~be ~~grows~~no ~~brand~~assurance ~~recognition and customer loyalty, strengthening~~ the Company’s ~~pricing~~will ~~power;~~become 3)profitable Asor ~~the~~obtain ~~scale~~necessary offinancing 5Gfor AIits ~~multimodal communicaiton~~business ~~traffic top up services~~ and ~~the~~investments ~~number~~or ofthat ~~serviced~~it ~~customers,~~will ~~along~~be able ~~with~~to ~~service quality,~~ continue toin ~~improve,~~business ~~customized~~ and ~~value-added~~investments. ~~services,~~The asconsolidated ~~well~~financial asstatements ~~service~~do ~~fees,~~not ~~will~~include ~~gradually~~any ~~increase.~~adjustments ~~This~~that ~~will~~might ~~boost~~result from the ~~profitability~~outcome of ~~the~~these ~~Company’s related businesses~~uncertainties. ~~The~~As ~~Company will continue to increase the share~~ of ~~high~~December ~~gross~~31, ~~profit products in the sales while increasing the revenue~~2024, ~~so as to further improve~~ the ~~gross~~Company ~~profit~~had ~~rate~~cash ~~and~~of ~~give investors a better return on investment~~$268,101.

~~Selling, General and Administrative, and Research and Development Expenses~~39

~~Selling~~On ~~expenses~~August ~~were~~15, 2023, the Company entered into a subscription agreement with a non-U.S. investor to purchase an aggregate of 2,962,963 shares of common stock price at a $~~996~~1.35 per share purchase price,~~049~~ ~~and~~with a total subscription price of $844,~~447~~000,000. The shares must be held for ~~the~~a ~~three~~period ~~months~~of ~~ended~~180 days. On September 3013, ~~2024 and~~ 2023, ~~respectively,~~our ~~representing~~Company announced the closing of an ~~increase~~underwritten public offering of ~~$911~~5,~~602~~000,000 orshares ~~1,079~~of common stock at a public offering price of $0.~~5%.~~40 ~~The~~per ~~increase~~share, ~~was~~for ~~mainly~~net ~~due~~proceeds toof ~~the~~$1,635,000, ~~increased~~after ~~advertising~~deducting underwriting discounts and ~~marketing~~other offering expenses. byOn ~~$884~~July 3,~~401~~ 2024, ~~increased~~we ~~service~~closed ~~fee~~an byoffering for net proceeds of $~~16,992~~2.2 million after deducting underwriting discounts and ~~increased~~ other ~~selling~~offering expenses. byWe ~~$10,209~~believe these fundings demonstrate our investors’ confidence in our strategy and business.

~~Currently, we~~We ~~are~~will ~~focusing~~continue ~~on expanding the Company’s leadingacoustics high tech technologies and products and continuing~~ to ~~develop 5G-related~~bring ~~applications.~~in Weadditional ~~incurred~~investors ~~R&D~~to ~~expenses~~support ~~of $103,079 and $155,004 during~~ the ~~three~~Company’s ~~months~~research ~~ended~~and ~~September 30~~development, ~~2024~~marketing and ~~2023, respectively, which shows a $51,925 or 33~~operations.~~5% decrease by comparing with the same period of 2023.~~

40 Use multiple marketing channels to attract customers, enhance brand awareness and increase sales. By optimizing and integrating multiple marketing channels, it can cover a wider range of target customer groups, improve efficiency and effectiveness, meet customer needs, reduce risks, achieve multi-channel comprehensive coverage, and achieve success in market competition.

~~Research~~Strengthen ~~and~~brand ~~development~~image ~~expenses~~building, ofdesign ~~$103~~a unique brand identity,~~079~~ ~~for~~unify ~~three~~the ~~months~~brand ~~ended~~image, ~~September~~strengthen 30word-of-mouth marketing, ~~2024.~~use ~~The~~social ~~Company’s~~media ~~research~~and word-of-mouth network, increase the authority and ~~development~~visibility ~~results~~of ~~include but~~the ~~are~~brand, ~~not~~and ~~limited~~continue to follow up and maintain the ~~following:~~brand image, improve product strength and creativity.

AsMaintain ~~one~~enterprise ofcompetitiveness ~~the~~and ~~leading~~achieve ~~service~~sustainable ~~providers~~development. inStrengthen ~~China’s~~research 5Gand AIdevelopment ~~multimodal~~investment ~~digital field, Datasea has several primary products~~ and ~~services~~in-depth understanding ~~targeting~~of ~~different~~market ~~customers and~~ needs, ~~including:~~establish 5Gan AIinnovation ~~multimodal new media marketing service platform~~culture,5G AIencourage ~~multimodal~~employees ~~Smart~~to ~~Agriculture (Digital~~propose ~~Rural)~~new ~~Service~~ideas ~~Platform~~and creativity, 5Gand AIcreate ~~multimodal~~an ~~platform~~open ~~for~~innovation atmosphere. ~~small~~Reward and ~~micro-enterprise~~recognize ~~services~~the ~~platform~~innovation ~~and~~results 5Gto AIstimulate ~~multimodal~~the ~~traffic top~~innovation upenthusiasm ~~platform~~of employees. 5GStrengthen AIcooperation ~~multimodal~~and exchanges, ~~digital~~establish ~~business~~cooperative ~~applications~~relations ~~applicable~~with touniversities ~~various~~and ~~industries~~scientific inresearch ~~China~~institutions, and ~~payment~~jointly ~~system~~carry ~~applications combined~~out ~~with~~research ~~artificial intelligence (AI), big prediction mode~~ and development ~~data analysis capabilities~~projects.

~~Datasea~~Participate ~~has~~in ~~completed~~industry aexhibitions, ~~revolutionary~~seminars ~~upgrade~~and ofother ~~its~~activities ~~core~~to 5Gexchange ~~multimodal~~experience ~~communication business~~ with AIpeers ~~processing~~and ~~technology.~~obtain ~~Currently,~~the itlatest ~~can achieve~~technology ~~AI creation~~ and ~~generation~~information. Optimize ofproduct ~~various~~development ~~information~~process, ~~forms~~adopt ~~including~~agile ~~sound~~development, ~~text,~~lean ~~images,~~production and ~~videos,~~other asmethods ~~well~~to asimprove ~~efficient~~product ~~transmission~~development efficiency and AIquality. ~~digital~~We ~~human~~will ~~marketing~~pay ~~functions.~~attention ~~This~~to ~~capability~~the ~~can~~protection ~~empower~~of ~~numerous~~intellectual ~~industries~~property ~~and~~rights, ~~clients~~apply ~~with~~for ~~potent~~patents, ~~marketing~~trademarks and ~~video~~other intellectual ~~matrix~~property ~~capabilities.~~rights ~~It can contribute to clients~~ in ~~brand~~a ~~enhancement,~~timely ~~customer acquisition~~manner, ~~market promotion,~~ and ~~revenue~~protect ~~uplift~~innovation achievements.

InOn October 3, 2024, Datasea ~~the~~entered ~~field~~into ofsubscription ~~acoustic~~agreements, ~~high-tech~~dated ~~business~~September 27, 2024 (the ~~company~~“Subscription isAgreements”), ~~one~~with ofthree non-U.S. investors (the ~~units~~“Investors”), ~~that~~including ~~proposed~~Zhixin Liu, the ~~concept~~Company’s Chairwoman of ~~“acoustic~~the ~~effect”~~Board, ~~in the~~Chief ~~world~~Executive Officer, President and Secretary, ~~exports~~and ~~acoustic~~Fu ~~high-tech~~Liu, ~~products~~a ~~and~~Director ~~solutions~~of the Company, pursuant to which the ~~world.~~Company ~~The~~agreed ~~company~~to ~~combines~~sell ~~basic~~and ~~acoustic~~the ~~theory~~Investors ~~with~~agreed ~~artificial intelligence,~~to ~~takes~~purchase ~~acoustic~~an aggregate ~~technology~~of ~~and~~1,932,224 ~~acoustic~~shares ~~effect~~(the as“Shares”) of the ~~technical~~Company’s ~~system~~common stock, ~~and~~par ~~researches~~value ~~and~~$0.001 ~~applies~~per ~~non-audible~~share ~~mechanical~~(“Common ~~wave~~Stock”), ~~effects~~at toa ~~collect~~purchase ~~and~~price ~~process~~of ~~acoustic~~$2.06 ~~data~~per ~~and~~share ~~solve~~(the ~~problems.~~“Purchase ~~Datasea~~Price”), ~~utilizes~~which ~~cutting-edge~~was ~~technologies~~equal into the ~~field~~closing price of ~~acoustic~~the ~~high~~Common ~~technology~~Stock ~~and~~on ~~has~~The ~~the~~Nasdaq ~~world’s~~Capital ~~leading~~Market ~~acoustic~~on ~~equipment~~September to26, ~~acoustic~~2024 ~~algorithm~~(the ~~models~~“Offering”). ~~Acoustic~~Pursuant ~~technology~~to ~~and~~the ~~products~~terms ~~are~~of the Subscription ~~widely~~Agreements, ~~used~~each inInvestor ~~various~~was ~~industries~~required ~~and~~to ~~fields,~~pay ~~including~~the ~~acoustic~~Purchase ~~agricultural~~Price ~~applications~~for the number of Shares such Investor purchased within 15 business days of September 27, ~~acoustic~~2024. ~~industrial~~As ~~applications~~of October 15, ~~acoustic medical~~2024, ~~acoustic~~the ~~health~~Company ~~and~~had ~~acoustic~~received ~~iot~~the ~~technology.~~Purchase ~~Especially~~Price from each Investor, representing gross proceeds in the ~~field~~aggregate amount of ~~ultrasonic~~approximately ~~technology~~$4.0 million, ~~the~~and ~~use~~all of ~~ultrasonic~~the ~~cavitation effect,~~Shares ~~thermal~~had ~~effect,~~been ~~mechanical~~issued. ~~effect~~The toproceeds ~~solve~~raised in the ~~needs~~Offering ofwill primarily ~~various~~be ~~application~~used ~~scenarios,~~ to ~~achieve~~support ~~disinfection~~the ~~and~~Company’s ~~sterilization~~future business operations, including investments in acoustic high-tech related products ~~crop~~design ~~drying~~upgrade, ~~safety~~working ~~monitoring,~~capital ~~beauty~~for mass production and ~~skin~~on-line ~~care~~sales, acquiring intellectual property, and ~~medical~~working ~~health~~capital for the promotion and ~~other~~sales ~~applications~~of 5G AI multimodal digital business products.

Our Acoustics and 5G intelligent products and solutions are able to serve more than 48.42 million enterprises and businesses of all types (over 99% are SMEs) and households in China with digital and intelligent services.40

~~Market~~If deemed ~~Promotion~~necessary, ~~Team~~management could seek to raise additional funds by the way of introducing strategic investors or private or public offerings, or by obtaining loans from banks or others, to support the Company’s research and development, procurement, marketing and daily operation. However, there can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. We may be required to pursue sources of additional capital through various means, including debt or equity financings.

~~The~~Future ~~company~~financings ~~has~~through ~~collaborated~~equity ~~with~~investments ~~three~~are ~~influential~~likely ~~Chinese~~to ~~market~~be ~~promotion~~dilutive ~~enterprises~~to existing stockholders. Also, ~~which~~the ~~leverage~~terms ~~extensive~~of ~~market~~securities ~~resources~~we tomay ~~recommend~~issue ~~new~~in ~~clients~~the future capital transactions may be more favorable for new investors. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. Our ability to obtain needed financing may be impaired by such factors as the ~~company~~capital markets and ~~facilitate~~our history of losses, which could impact the ~~signing~~availability or cost of ~~contracts~~future financings. If the amount of capital we are able to raise from financing activities, together with ~~these~~our ~~new~~revenues ~~clients~~from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

~~General~~Sustainable ~~and~~operation ~~administration~~can ~~expenses~~help ~~increased~~enterprises ~~$435,343,~~improve oroperating ~~62.8% from $693~~efficiency,~~060~~ ~~during~~enhance the ~~three~~competitiveness ~~months~~of ~~ended September 30~~enterprises, ~~2023~~and toenhance ~~$1,128,403 during~~ the ~~three~~market ~~months ended September 30, 2024. The increase was mainly due to increased stock compensation expense by 354,900, increased~~share ~~professional~~of service fee by $150,493 and increased meal and entertainment fee by $34,068, which was partly offset by decreased payroll expense by $10,818, decreased travel expense by $21,743, decreased rent expense by $23,872 and decreased amortization expense by $47,842enterprises.

WeSustainable ~~are~~operation ~~treating~~can ~~human~~help ~~capital~~enterprises asbetter acontrol ~~key~~risks, ~~indicator~~reduce tooperating ~~drive~~costs, ~~business growth~~ and ~~technical~~ensure ~~innovation,~~the ~~also~~safety ~~pursuing~~of ~~better integrated channels with related industries.~~enterprises

~~Non-Operating~~Sustainable ~~Income~~operation ~~(Expenses),~~can ~~net~~help enterprises enhance their social image and enhance their sense of social responsibility.

41 Sustainable operation can help enterprises better grasp market opportunities, grasp market trends, and achieve a win-win situation between enterprises and society.

~~Non-operating~~Significant ~~income~~Accounting were $59,881 for the three months ended September 30, 2024, consisting mainly of interest income of $4,055 and other income of $55,826. Non-operating expenses were $7,758 for the three months ended September 30, 2023, consisting mainly of interest income of $106 and other expenses of $7,864. Policies

~~Net~~Please ~~(Income)~~refer ~~Loss~~to ~~from~~our ~~Discontinued~~significant ~~Operation~~accounting policies in Note 2 to our consolidated financial statements included in this report.

WeRecent ~~generated net income from discontinued operation of $833,546 (which was the gain on disposal of Zhangxun) for the three months ended September 30, 2023.~~ Developments

~~Net~~On July ~~Loss~~2, ~~from~~2024, ~~continuing~~the Company entered into a securities purchase agreement (the “Purchase Agreement”) to issue and sell to an ~~operation~~investor in a registered direct offering (the “Registered Direct Offering”) 179,400 shares of Common Stock at $3.25 per share and pre-funded warrants to purchase up to 512,908 shares of Common Stock at $3.24 per share with an exercise price of $0.01 per share (the “Pre-Funded Warrants”).

WeThe ~~generated~~securities ~~net~~in ~~loss~~the ~~from~~Registered ~~continuing~~Direct ~~operation~~Offering ofwere ~~$1,961,989~~issued ~~and~~under ~~$855,602 for~~ the ~~three~~Company’s ~~months~~shelf ~~ended~~registration ~~September~~statement ~~30,~~on ~~2024~~Form ~~and~~S-3 ~~2023,~~(File ~~respectively,~~No. ~~an $1~~333-272889),~~106,387~~ orfiled ~~129.3% increase by comparing~~ with the ~~same~~SEC ~~period~~on ofJune 23, 2023., ~~The~~and ~~increase~~declared ineffective ~~net~~on ~~loss~~July ~~was~~21, ~~mainly~~2023. ~~due~~A toprospectus ~~the~~supplement ~~increase in operating expenses which~~ was ~~partly~~filed ~~offset~~with bythe SEC ~~increased~~on ~~gross~~July ~~profit~~3, ~~as explained above~~2024.

~~Accounts~~The Pre-Funded ~~receivable~~Warrants are exercisable upon issuance and remain so until fully exercised. If the Company fails to deliver shares upon valid exercise of the Pre-Funded Warrants, it must pay the holder liquidated damages as outlined in the warrants. The warrants also provide customary buy-in rights should the Company fail to deliver shares within specified timeframes.

~~The~~Under ~~operating revenue of~~ the ~~three~~Pre-Funded ~~months~~Warrants’ ~~ended September 30~~terms, ~~2024~~a ~~was~~holder ~~$21,081,094,~~may ~~the~~not ~~balance~~exercise ~~of accounts receivable was $18,445 at September 30, 2024. In~~ the ~~same~~warrant ~~period~~if ~~last~~it ~~year,~~would ~~the~~result ~~operating~~in ~~revenue~~ownership ~~was~~of ~~$6,880,743,~~more ~~and~~than ~~the accounts receivable balance was $22,158 at September 30, 2023~~4.99% ~~This~~of ~~quarter,~~ the outstanding ~~Company~~shares ~~further~~of ~~segmented~~Common ~~the market~~Stock, ~~planned~~unless ~~eight regional headquarters, strengthened~~ the ~~collection~~holder ~~control, and~~elects ~~promoted~~to ~~the~~increase ~~fund~~this ~~collection~~limit ofto ~~contracted~~9.99% ~~delivery~~with ~~projects,~~61 ~~which~~days’ ~~led~~notice to the ~~benign return of funds and had a far-reaching impact on the future~~Company.

~~Liquidity~~Under the ~~and~~Purchase ~~Capital~~Agreement, the Company agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance ~~Resources~~of any Common Stock or equivalents, nor to file any new registration statement, for 60 days after the Registered Direct Offering’s closing. The Company also agreed not to enter into any variable rate transactions while the investor holds any pre-funded warrants.

Historically, we have funded our operations primarily through the sale of our common stock and shareholder loans. To enhance our ability to continue to operate as a going concern, we are dedicating resources to generate recurring revenues and sustainable operating cash flows.41

WeThe ~~expect~~Registered toDirect ~~generate~~Offering ~~revenues~~closed ~~through~~on ~~expanding~~July ~~our~~3, ~~current 5G AI multimodal digital business and acoustic intelligence business~~2024, ~~and~~with ~~through continuous~~gross ~~product~~proceeds ~~innovation and development as well as various types~~ of ~~value-added~~approximately ~~services~~$2.25 Inmillion, ~~order~~before todeducting ~~maintain~~fees ~~working capital sufficient~~payable to ~~support our operations and finance~~ the ~~future~~Placement ~~growth~~Agent ~~of our business, we expect to fund any cash flow shortfall through financial support from our majority stockholders (who are also our board members or officers)~~ and ~~public~~other ~~or private issuance of securities~~expenses. ~~However,~~The ~~such additional~~Company ~~cash~~intends ~~resources~~to ~~may~~use ~~not~~the benet ~~available~~proceeds tofor ~~us on desirable terms~~R&D, ormarket ~~at all~~development, if and ~~when~~general ~~needed by us~~corporate purposes.

AsIn connection ofwith ~~September~~the ~~30,~~Registered ~~2024~~Direct Offering, wethe ~~had~~Company aentered ~~working~~into ~~capital~~a ofplacement ~~$3,422,544~~agency ~~or a~~agreement ~~current~~(the ~~ratio~~“Placement ofAgency ~~1.91:1,~~Agreement”) with ~~and~~EF ~~our~~Hutton ~~current~~LLC ~~assets~~on ~~were~~July $62,~~950,373~~ 2024. AsUnder ofthis ~~June 30~~agreement, ~~2024,~~the weCompany ~~had~~will apay ~~working~~the ~~capital~~Placement ~~deficit~~Agent ~~of $952,090 or~~ a ~~current~~cash ~~ratio~~fee of 06.~~74:1.~~5% ~~Our~~of ~~current~~the ~~assets~~gross ~~were~~proceeds and reimburse expenses up to $275,~~647,892~~000.

WeAdditionally, ~~expect~~as ~~the~~a ~~Company~~condition to ~~continue~~the toclosing ~~support~~of ~~its~~the ~~ongoing~~Purchase ~~operations~~Agreement, ~~and~~the ~~financing~~Company’s ~~through~~officers ~~revenue growth~~ and ~~increased~~directors ~~financing~~entered ~~activities.~~into “lock-up” ~~However~~agreements, ~~there~~prohibiting isthem nofrom ~~assurance~~disposing ~~that~~of ~~the~~any Company ~~will~~securities befor ~~able~~60 todays ~~secure~~from ~~such~~the ~~additional~~Registered ~~working~~Direct ~~capital~~Offering’s onclosing date, ~~commercially~~subject ~~viable~~to ~~terms~~certain ~~or at all~~exceptions.

42 As disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2024, the Company entered into subscription agreements dated September 27, 2024 (the “Subscription Agreements”) with three non-U.S. investors, including Zhixin Liu, the Company’s Chairwoman, CEO, President, and Secretary, and Fu Liu, a Director of the Company. Under these agreements, the Company agreed to sell, and the Investors agreed to purchase, a total of 1,932,224 shares of Common Ctock, , at a purchase price of $2.06 per share, which was the closing price on the Nasdaq Capital Market as of September 26, 2024 (the “Offering”). Each Investor was required to pay for their Shares within 15 business days of September 27, 2024.

~~The~~As ~~following~~of isOctober a15, ~~summary~~2024, ofthe ~~cash~~Company ~~provided~~received bythe orpurchase ~~used~~price infrom each ofInvestor, ~~the~~totaling ~~indicated~~approximately ~~types~~$4.0 ofmillion, ~~activities~~and ~~during~~all Shares have been issued. The proceeds from the ~~three~~Offering ~~months~~will ~~ended~~primarily ~~September~~support the Company’s future operations, including investments 30in high-tech acoustic product design upgrades, ~~2024~~mass ~~and~~production, ~~2023~~online sales, ~~respectively~~IP acquisition, and marketing for its 5G AI multimodal digital business products.

	2024			2023
Net cash used in operating activities	$	(732,655	)	$	(6,744,413	)
Net cash used in investing activities	$	(47,520	)	$	(365	)
Net cash provided by financing activities	$	1,490,992		$	8,080,455

New Software Copyright Acquired From July 1, 2024 to Dec 31, 2024

~~Cash~~Software ~~Flow~~Copyright ~~from Operating~~Owned ~~Activities~~by Shuhai Beijing

Net cash used in operating activities was $732,655 during the three months ended September 30, 2024, compared to net cash used in operating activities of $6,744,413 during the three months ended September 30, 2023, a decrease in cash outflow of $6,011,758.

No.	Certification	Certificate No.
1	Shuhai Information Beauty multimodal assistant user end	Ruan Zhu Deng Zi No. 13940802
2	Park customer situation multimodal data management system	Ruan Zhu Deng Zi No. 13935684
3	Digital marketing cloud document integrated management system	Ruan Zhu Deng Zi No. 13934629
4	5G intelligent multimodal ERP management system	Ruan Zhu Deng Zi No. 13941972
5	Acoustic intelligent living terminal equipment management system	Ruan Zhu Deng Zi No. 14412403
6	Store interactive intelligent service management system	Ruan Zhu Deng Zi No. 14280647

The decrease in cash outflow was mainly due to 1) increased collection of accounts receivable by $722,820, 2) decreased cash outflow on prepaid expenses and other current assets by $5.31 million, 3) increased payment received from customers for unearned revenue by $1.29 million, and 4) decreased payment on lease liabilities by $68,540, despite we had increased cash outflow on accounts payable by $0.61 million, and net loss of $1.97 million with adjustment of non-cash stock compensation expense of $375,000 for the three months ended September 30, 2024, comparing with net loss of $31,988 with adjustment of non-cash income of gain on disposal of subsidiary of $0.83 million for the three months ended September 30, 2023.42

~~Cash~~Software ~~Flow~~Copyright ~~from Investing~~owned ~~Activities~~by Xunrui Technology

Net cash used in investing activities totaled $47,520 for the three months ended September 30, 2024, which consisted of cash paid for the acquisition of office furniture and equipment of $2,752 and cash paid for acquisition of intangible assets by $44,768. Net cash used in investing activities totaled $365 for the three months ended September 30, 2023, which consisted of cash paid for the acquisition of office furniture and equipment of $330, and cash disposed due to disposal of subsidiary of $35.

No.	Certification	Certificate No.
1	5G message integrated order management system	Ruan Zhu Deng Zi No. 14292596
2	Beauty store operation management system	Ruan Zhu Deng Zi No. 14301728
3	Smart agriculture plant growth analysis system	Ruan Zhu Deng Zi No.14292600
4	Intelligent Internet of Things health care management system	Ruan Zhu Deng Zi No. 13927009
5	Intelligent emergency integrated management system	Ruan Zhu Deng Zi No.14292610

~~Cash~~Software Copyright ~~Flow~~owned ~~from Financing~~by ~~Activities~~Tianjin Information Sea

Net cash provided by financing activities was $1,490,992 during the three months ended September 30, 2024, which was net proceeds from sale of our common stock through an equity financing of 1,958,751, which was partly offset by repayment of loan payables of $40,815 and repayment to related parties of $426,944. Net cash provided by financing activities was $8,080,455 during the three months ended September 30, 2023, which was the net proceeds from loans payable of $879,422, and net proceeds from sale of our common stock through an equity financing of $8,061,286, which was partly offset by repayment of loan payables of $184,425 and repayment to related parties by $675,828.

No.	Certification	Certificate No.
1	Interactive integrated service procurement management system	Ruan Zhu Deng Zi No. 13935831
2	Decompression acoustic brain wave software	Ruan Zhu Deng Zi No. 14129289
3	Acoustic equipment performance test management platform	Ruan Zhu Deng Zi No.14129243
4	Acoustic sleep environment noise control management system	Ruan Zhu Deng Zi No. 14129261
5	Intelligent acoustic health sleep management software	Ruan Zhu Deng Zi No.14129276

~~Loan~~Software Copyright ~~from~~owned ~~banks~~by Guozhong Time

On April 10, 2024, Guozhong Times entered a loan agreement with Bank of Beijing for the amount of RMB 500,000 ($70,158) with a term of 12 months with a preferential annual interest rate of 3.45% to be paid every 21st of each month. For the three months ended September 30, 2024, the Company recorded and paid $619 interest expense for this loan. As of September 30, 2024, $71,353 was recorded as current liabilities.

No.	Certification	Certificate No.
1	Enterprise digital procurement service platform	Ruan Zhu Deng Zi No. 14422388
2	Online transaction collection digital system	Ruan Zhu Deng Zi No. 14246469
3	Online transaction intelligent service robot management platform	Ruan Zhu Deng Zi No.14247983

OnPatent ~~April~~owned ~~23,~~by ~~2024,~~Tianjin ~~Guozhong~~Information Times entered a loan agreement with Beijing Rural Commercial Bank Economic and Technological Development Zone Branch for the amount of RMB 550,000 ($77,173) with a term of 12 months with the annual interest rate of 4.95% to be paid every 21st of each month. For the three months ended September 30, 2024, the Company recorded and paid $978 interest expense for this loan. As of September 30, 2024, $78,488 was recorded as current liabilities.Sea

No.	Certification	Certificate No.
1	Audio playback system based on voltage following	ZL 2018 1 0008029.2
2	A B-ultrasound image target detection method and a B-ultrasound scanner	ZL 2022 1 0061012.X

OnResults ~~April 25, 2024, Shuhai Beijing entered a loan agreement with Industrial Bank Co., Ltd for the amount~~ of RMB 2,000,000 ($280,631) with a term of 12 months with a preferential annual interest rate of 3.88% to be paid every 21st of each month. For the three months ended September 30, 2024, the Company recorded and paid $2,786 interest expense for this loan. As of September 30, 2024, $285,413 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.Operations

OnComparison ~~May 28, 2024, Guozhong Times entered a loan agreement with China Everbright Bank for the amount~~ of ~~RMB 1,000,000 ($140,315) with a term of 12 months with~~ the ~~annual interest rate of 3.4% to be paid every 21st of each month. For the~~ three months ended ~~September~~December 3031, 2024, ~~the Company recorded~~ and ~~paid $1,221 interest expense for this loan. As of September 30, 2024, $142,706 was recorded as current liabilities.~~2023

On June 20, 2024, Shuhai Beijing entered a loan agreement with Bank of China for the amount of RMB 4,000,000 ($561,262) with a term of 12 months with a preferential annual interest rate of 2.30% to be paid every 21st of the third months of each quarter. For the three months ended September 30, 2024, the Company recorded and paid $3,034 interest expense for this loan. As of September 30, 2024, $570,826 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.43

AsThe offollowing ~~September~~table ~~30,~~sets ~~2024,~~forth the ~~total~~results ~~liabilities~~ of ~~Datasea~~our ~~are~~operations ~~$3,660,370,~~for ~~which~~the ~~shows~~three amonths ~~1.68%~~ended ~~increase~~December ~~from June 30~~31, 2024., ~~The~~and ~~increase of liability is due to the increase of lease liability by $169~~2023,~~805,~~ ~~increase of unearned revenue by $1~~respectively,~~263,078,~~ ~~increased accrued expense~~indicated ~~and~~as ~~other~~a ~~payables~~percentage byof ~~$95,078~~net ~~which~~sales. ~~was~~Certain ~~partly~~columns ~~offset~~may bynot ~~decreased~~add up due to ~~related party by $654,560, decreased outstanding of accounts payable by $791,501and decreased loan payable by $21,512~~rounding.

Analysis of financial index

	2024			% of Revenues			2023			% of Revenues
Revenues	$	20,456,404					$	11,348,469
Cost of revenues		20,038,952			98.0	%		11,246,234			99.1	%
Gross profit		417,452			2.0	%		102,235			0.9	%
Selling expenses		407,669			2.0	%		1,149,944			10.1	%
Research and development		74,402			0.4	%		117,371			1.0	%
General and administrative expenses		1,173,733			5.7	%		623,456			5.5	%
Total operating expenses		1,655,804			8.1	%		1,890,711			16.7	%
Loss from operations		(1,238,352	)		(6.1	)%		(1,788,536	)		(15.8	)%
Non-operating income (expenses), net		110,636			0.5	%		(44,564	)		(0.4	)%
Loss before income taxes		(1,127,716	)		(5.5	)%		(1,833,100	)		(16.2	)%
Income tax expense		-			-	%		-				%
Loss before noncontrolling interest from continuing operation		(1,127,716	)		(5.5	)%		(1,833,100	)		(16.2	)%
Income before noncontrolling interest from discontinued operation		-			-	%		-			-	%
Less: loss attributable to noncontrolling interest from continuing operation		8,562			0.04	%		(61	)		(0.001	)%
Net loss to the Company from continuing operation		(1,136,278	)		(5.6	)%		(1,833,039	)		(16.2	)%
Net income (loss) to the Company from discontinued operation		-			-	%		-			-	%
Net loss to the Company	$	(1,136,278	)		(5.6	)%		(1,833,039	)		(16.2	)%

As of September 30, 2024 and June 30, 2024, the company’s inventory was US $208,062 and US $153,583, an increase of US $54,479, or a growth rate of 35.47%, compared with the end of the previous fiscal year. The company has formed a certain production scale after continuous investment in acoustic intelligent products and independent research and development. And make use of the existing advantages and capabilities to open new markets to bring more revenue for the company to meet customer needs. Increasing inventory can ensure that the company has enough products or raw materials to meet customer order needs, avoid the situation of stock shortage, and thus improve customer satisfaction. Appropriately increasing inventories can help enterprises cope with sudden demand growth or price increases, reduce the risk of supply disruption, reduce the waiting time in the production process, make the production process smoother and improve production efficiency. By increasing the purchase volume of inventory, the company can obtain discounts and concessions for bulk purchases and reduce procurement costs. Increasing inventory can meet market demand in time to seize sales opportunities when promotion or peak season comes.Revenues

AsWe ofhad ~~September~~revenues ~~30,~~of ~~2024 and~~$20,456,404 ~~June~~and 30$11, ~~2024~~348,469 for the ~~Company’s~~three ~~cash~~months ~~balance~~ended ~~was~~December ~~$937~~31,~~606~~ 2024, and ~~$181~~2023,~~262,~~ respectively, anwhich ~~increase~~shows ofa $~~756~~9,~~344~~107,935 ~~from~~increase ~~the~~by ~~end~~comparing of with the ~~prior~~same ~~fiscal year~~period ~~and~~of 2023, an increase of ~~417~~80.273% ~~from~~over the ~~end~~same ofperiod ~~the~~last ~~prior fiscal~~ year. ~~Mainly~~The ~~due~~increase toin ~~the~~revenues ~~successful~~was ~~financing~~mainly ofdue ~~the~~to ~~company in~~ the ~~quarter,~~rapid increase byof ~~absorbing~~5G ~~major~~AI ~~shareholder~~multimodal ~~investment~~digital ~~and~~business ~~capital~~in ~~market~~China. ~~funds,~~For ~~expanding~~ the ~~scale~~three ofmonths ~~the~~ended ~~company,~~December ~~increasing investment in research and development~~31, ~~intellectual property rights and market expansion~~2024, ~~strengthening~~revenues ~~the~~mainly ~~competitiveness~~consisted of ~~the~~service ~~company’s brand, laying a~~fees ~~solid~~from ~~foundation~~our ~~for~~5G ~~the~~AI ~~sustainable~~Multimodal ~~development of the company~~digital. The ~~increase~~Company’s in5G ~~sales~~AI ~~revenue~~multimodal ~~brought~~digital ~~about~~business byis ~~the~~an ~~increase~~industry inleader, ~~demand for products~~ and ~~services~~the ~~and~~continued ~~a number~~ expansion of ~~capital~~the ~~inflows~~Company’s ~~brought~~customer ~~about~~base bysupports the ~~expansion~~continued ofsignificant ~~financing~~improvement ~~channels,~~of the ~~company has optimized its asset structure and enhanced its financial strength and liquidity~~business.

44 From October 1, 2024, to December 31, 2024, the Company generated revenue of $20,456,404, including $20,085,988 from the 5G AI multimodal digital business, $326,936 from software licensing, 43,304 from acoustic intelligence business and $176 from other. From October 1, 2023, to December 31, 2023, the Company generated revenue of $11,348,469, including $11,276,319 from the 5G AI multimodal digital business, $2,862 from the acoustic intelligence and $69,288 from other.

As of September 30, 2024 and June 30, 2024, the Company’s accounts receivable balance was $18,445 and $718,546, respectively, a decrease of $700,101 from the end of the prior fiscal year and 97.43% from the end of the prior fiscal year. The ~~reduction in accounts receivable means that businesses are~~ ~~able~~reasons ~~to convert claims from credit sales into cash more quickly, which increases the speed and availability of funds. Enterprises can use funds more flexibly~~ for ~~production and operation, investment expansion or debt repayment, reducing~~ the ~~risk~~sustained ofhigh-speed ~~capital~~growth ~~shortage. A reduction in accounts receivable would make a company’s balance sheet healthier. The increase~~ of ~~cash content in current assets and~~ the ~~decrease~~ of5G ~~accounts receivable will help improve financial indicators such as the current ratio and quick ratio of enterprises, and enhance the solvency and credit rating of enterprises~~business. A reduction in accounts receivable can allow a company to reduce its need for external financing, thereby reducing interest expense and financing costs. The company strengthens the credit management of accounts receivable, so that external funds can return as soon as possible and maintain a good capital turnover.

AsFirstly, the empowerment of ~~September~~AI 30technology. Through its innovative 5G+AI technology, ~~2024~~Datasea has achieved the efficient integration of multimodal data. By utilizing cross-modal semantic calibration and ~~June~~multi-head ~~30,~~cross-attention ~~2024~~mechanisms, the Company’s significantly improves the accuracy of projecting multimodal feature ~~current~~spaces ~~assets~~while ~~were~~optimizing ~~$7,181,924and~~AI $2model training costs,~~647,892,~~ ~~respectively.~~thereby Anadvancing ~~increase~~its ofindustry-leading ~~$4,534,032~~technological ~~from~~position. ~~the~~The ~~end~~platform offurther ~~the~~optimizes resource ~~previous~~allocation ~~fiscal~~and ~~year~~scheduling through intelligent algorithms, ~~representing an~~enabling ~~increase~~real-time monitoring and remediation of ~~171~~potential issues in marketing applications.~~23%~~ ~~from~~This ~~the~~provides ~~end~~enterprises ofwith ~~the~~personalized ~~previous~~and ~~fiscal~~refined ~~year.~~marketing ~~The~~services, ~~increase~~reducing ofoperational ~~current~~risks ~~assets~~and ~~enables~~enhancing customer satisfaction. Leveraging the ~~company~~low tolatency ~~meet~~and ~~the~~high-speed ~~repayment requirements~~transmission capabilities of ~~short-term~~5G ~~debts~~technology ~~more~~alongside ~~easily~~robust AI intelligent analysis, ~~reduces~~Datasea ~~the~~creates ~~financial~~entirely ~~risk~~new ofbusiness ~~the~~models ~~enterprise~~and marketing opportunities for enterprises, thereby enhancing market competitiveness and ~~enhances~~driving ~~the~~revenue ~~confidence~~growth. ofDatasea ~~creditors~~has ~~in the~~deeply ~~enterprise;~~cultivated ~~Improve~~its ~~liquidity,~~presence ~~help~~in ~~enterprises~~various ~~maintain~~sectors ~~operational~~including ~~flexibility~~finance, ~~better~~entertainment, ~~adapt~~logistics, agriculture, toand ~~changes~~healthcare. For example, in the ~~market~~media ~~environment; Can~~and ~~guarantee~~entertainment domain, the ~~continuity~~combination of ~~production~~5G+AI ~~and~~multimodal ~~operation,~~digital ~~promote~~technology delivers ~~sales~~a ~~growth;~~richer ~~Enhance~~user ~~the~~experience. ~~anti~~Users can access high-~~risk~~quality ~~ability~~media ofcontent ~~enterprises,~~such inas ~~the~~ultra-high-definition ~~case of~~videos ~~economic~~and ~~instability~~interactive orentertainment services ~~market~~anytime ~~volatility~~and anywhere. Moreover, ~~current~~AI ~~assets~~algorithms can berecommend ~~used~~personalized ascontent abased ~~cushion~~on ~~for~~user ~~enterprises~~interests toand ~~maintain~~behaviors, ~~the~~thereby enhancing ~~normal~~user ~~operation of~~satisfaction ~~enterprises~~and engagement in 5G+AI-related services.

~~For the months ended September 30~~Secondly, The ~~2024 and 2023, the~~ Company’s ~~revenue~~upstream ~~was~~and ~~$21,081,094~~downstream ~~and~~chain ~~$6,880,743,~~maintenance ~~respectively.~~and Anexperience ~~increase~~accumulation ofand ~~$14,200,351~~precipitation ~~from~~eventually ~~the~~formed ~~same~~a ~~period~~huge ~~last~~loyal ~~year,~~customer ~~an increase of 206.38% from the same period last year~~base, ~~and~~but ~~the~~also ~~revenue~~closely ~~growth~~related ~~was mainly due~~ to the ~~rapid~~thriving ~~growth~~vitality of the 5G ~~AI multimodal digital business. The company constantly excavates high-quality customers, maintains~~ market ~~share, and constantly expands new customers~~.

-Through its ~~Market~~own ~~share~~sales ~~expansion: Through~~team, ~~effective~~the ~~marketing~~Company ~~strategies~~vigorously promotes and ~~high-quality~~publicizes ~~product~~its orresearch ~~service~~and ~~quality,~~development ~~the~~results ~~company~~and ~~gains~~technology andisplay ~~advantage~~in 5G sales, actively participates in important seminars and business fairs around the ~~competition~~ country, and ~~grabs~~deeply ~~more~~explores ~~market~~the ~~share~~target customers related to 5G news. Through painstaking efforts and keen business acumen, ~~resulting~~we inhave anactually ~~increase~~obtained ina ~~operating~~stable ~~income~~customer flow.

~~- Sales channel expansion: To develop new sales channels, which can increase the coverage of products or services, thereby increasing sales revenue.~~44

~~Customer~~The Company’s ~~base~~top ~~expansion:~~five ~~The company~~customers ~~successfully~~for ~~attracted~~5G ~~more~~AI ~~new~~multimodal ~~customers~~digital ~~while~~business ~~maintaining~~at ~~the~~this ~~loyalty~~stage ofare ~~existing~~Qingdao ~~customers~~Ruizhi Yixing Information Technology Co., ~~resulting~~LTD., inShanghai anShixun ~~increase~~Network inTechnology ~~the number~~Co., ofLTD., ~~customers~~Wuhan Xiaoming Technology Co., ~~which~~LTD., inXinyi ~~turn~~Xinfanfa ~~drove~~Information ~~revenue~~Technology ~~growth~~Co., LTD., Nanjing Linghui Information Engineering Co., LTD.

~~Favorable industry trend:~~Through ~~The~~close ~~industry~~business ascooperation, athe ~~whole~~above iscustomers inhave anbecome ~~upward~~stable ~~trend~~ and ~~the~~loyal ~~market~~partners ~~environment~~of isthe ~~good~~Company, ~~which~~and ~~provides~~will ~~favorable~~work ~~conditions~~together ~~for~~in the ~~company’s operating income growth~~future.

~~Improve~~In terms ~~operational~~of ~~efficiency: Operational~~marketing ~~improvements~~promotion, ~~such~~the asCompany ~~optimizing~~has ~~production~~hired ~~processes,~~a ~~reducing~~professional ~~costs,~~cooperative ~~improving~~marketing ~~product~~team ~~quality~~to introduce and ~~speed~~recruit ofsuitable ~~delivery~~and ~~help~~high-quality ~~increase~~stable customers for the ~~company~~Company. From the fourth quarter of 2023, the sales of the Company’s ~~competitiveness~~5G Multimodal communication business has witnessed explosive growth, and the sales in the second quarter of 2024 have significantly increased compared with the same period of last year.

-At ~~Improved~~present, ~~macroeconomic~~the ~~environment:~~Company’s ~~The~~research ~~overall~~and ~~economic~~development ~~situation~~technology in 5G AI multimodal digital is ~~improving~~leading in the industry. After long-term expansion of customer groups, it ~~consumer~~has ~~confidence~~formed isa ~~increasing~~stable customer group. At present, ~~and~~the Company has also hired a professional 5G Multimodal communication business ~~investment~~promotion team. isWe ~~increasing~~signed 5G communication marketing service agreements with some marketing companies that have many years of advantages in iot market development, ~~which~~operation ~~may~~and ~~drive~~promotion services, have effective integration with mobile Internet enterprises, iot industry chain ~~demand~~and ~~for~~other resources, and have strong channel expansion and sales and operation capabilities to carry out in-depth cooperation. This business segment belongs to the ~~company~~stable growth of the Company’s ~~products~~business, orand ~~services~~in the future, the Company will continue to grow steadily, steadily and ~~promote~~rapidly ~~operating~~in ~~income~~the ~~growth~~5G AI multimodal digital business segment.

45 Cost of Revenues

~~For~~We recorded $20,038,952 and $11,246,234 cost of revenues for the three months ended ~~September~~ 30December 31, 2024 and 2023, respectively, which shows a $8,792,718 increase by comparing with the ~~Company’s~~same ~~gross~~period ~~profit~~of ~~was~~2023. ~~$196,981~~For ~~and~~the ~~$74~~three months ended December 31,~~735~~ 2024, ~~respectively~~cost of revenues was mainly the 5G AI multimodal digital platform fees and Cloud Platform construction to suppliers. ~~Gross~~The ~~profit~~increase in cost of revenues was due mainly to the increased ~~$122~~revenue of 5G AI multimodal digital. For the three months ended December 31,~~246~~ ~~from~~2024, the cost of 5G AI multimodal digital ~~same~~was ~~period~~$19.71 ~~last~~million, ~~year~~the cost of software licensing was $317,414 anand ~~increase~~the cost of ~~163~~acoustic intelligence business was $16,184.~~57%~~ ~~from~~For the ~~same~~three months ~~period~~ended ~~last~~December ~~year~~31, ~~primarily~~2023, ~~due~~cost toof revenues was mainly the ~~Company’s~~5G ~~significant~~Multimodal ~~increase~~communication inservice ~~market share~~platform fees and ~~significant~~Cloud ~~increase~~Platform construction into ~~operating income~~suppliers. The increase in ~~gross~~cost ~~profit~~of ~~means~~revenues ~~that~~was ~~the~~due ~~company~~mainly ~~has~~to ~~great~~the ~~potential~~increased ~~for~~revenue ~~development and~~of ~~operation~~5G Multimodal communication.

~~- Improved shareholder returns:~~Gross For shareholders, an increase in the gross profit of a business usually leads to an increase in net profit, which increases the dividend distribution and stock value for shareholders. This helps to increase shareholder confidence in the company and attract more investors.Profit

-Gross profit ~~Consolidation~~for ofthe ~~market position:~~three ~~Higher~~months ~~gross~~ended ~~profit~~December ~~makes~~31, ~~enterprises~~2024, ~~more~~was ~~competitive~~$417,452 incompared ~~the~~to ~~market~~$102,235 ~~and~~for the ~~can~~three ~~attract~~months ~~more~~ended ~~customers~~December ~~through~~31, ~~price~~2023, ~~advantages~~which shows a $315,217 increase by comparing with ~~product~~ the ~~quality~~same orperiod ~~service~~of ~~differentiation,~~2023. ~~expand~~The ~~market~~increase ~~share,~~in ~~and~~gross ~~further~~profit ~~consolidate~~was mainly due to the ~~market~~increase ~~position~~in ofsales for ~~enterprises~~the three months ended December 31, 2024.

~~Innovation~~Gross ~~and~~margin ~~R&D~~is ~~investment:~~2.0% ~~The~~and ~~increase~~0.9% infor ~~gross~~the ~~profit~~three ~~provides~~months ~~companies~~ended ~~with~~December ~~more~~31, ~~funds~~2024, ~~for~~and ~~innovation~~2023. ~~and~~The ~~R&D~~increase ~~activities.~~in ~~This~~gross ~~helps~~margin ~~enterprises~~was mainly due to ~~continuously launch~~the ~~new~~Company’s ~~products,~~significant increase ~~improve~~in ~~existing~~market ~~products~~share and ~~services,~~significant ~~meet~~increase ~~the~~in ~~changes~~operating income. The increase in ~~market~~gross ~~demand,~~profit ~~and~~means ~~maintain~~that the ~~technological~~Company ~~leadership of~~has ~~enterprises~~great ~~and~~potential for ~~sustainable~~ development ~~capabilities~~and operation.

AsImproved ofshareholder returns: ~~September~~For 30shareholders, ~~2024~~an ~~and June~~increase ~~30,~~in ~~2024,~~ the ~~Company’s~~gross ~~accounts~~profit ~~received~~of ina ~~advance~~business ~~balance~~usually ~~was~~leads ~~$1312,317~~to ~~and $49,239, respectively,~~ an increase ofin $1net profit,~~263,078~~ ~~from the~~which ~~end~~increases of the dividend ~~prior~~distribution ~~fiscal year~~ and anstock ~~increase~~value offor ~~2,565~~shareholders.2% ~~from~~This ~~the~~helps ~~end~~to ofincrease ~~the~~shareholder ~~prior~~confidence ~~fiscal~~in ~~year.~~the ~~The~~Company ~~benefits~~and ofattract ~~increased advances~~more ~~include:~~investors.

-Consolidation of ~~Improve~~market ~~cash~~position: ~~flow~~Higher gross profit makes enterprises more competitive in the market, and ~~enhance~~can attract more customers through price ~~the~~advantages, ~~financial~~product ~~stability~~quality ofor service differentiation, expand market share, and further consolidate the ~~enterprise~~market position of enterprises.

-Innovation and ~~Reduce~~R&D ~~business~~investment: ~~risks~~The ~~to a~~increase ~~certain~~in ~~extent~~gross profit provides companies with more funds for innovation and R&D activities. ~~With~~This ahelps enterprises ~~certain~~to ~~amount~~continuously oflaunch ~~financial~~new ~~security~~products, improve existing products and services, meet the ~~potential~~changes ~~loss~~in ismarket ~~reduced~~demand, and maintain the technological leadership of enterprises and sustainable development capabilities.

Forecasting demand: Advance collections can provide companies with information about market demand. By analyzing the situation of advance payment, enterprises can better understand the needs and purchase intentions of customers, so as to more accurately predict the market demand, rationally arrange production and sales plans, and improve the efficiency of resource utilization.45

~~- Enhance market competitiveness:~~Further ~~The~~measures ~~ability~~ to ~~collect~~improve ~~advance payments may indicate that~~ the ~~company’s~~gross ~~products~~profit ormargin ~~services have a certain attractiveness and market competitiveness. This can enhance the position~~ of ~~the enterprise in the market, attract more customers, and lay a good foundation for the development of the enterprise.~~enterprises:

-1. ~~Improve~~Reasons ~~customer~~for ~~loyalty: For~~the ~~some~~Company’s ~~customers,~~choice ~~the~~of ~~willingness~~temporary cost leadership strategy: Due to ~~pay~~the fierce competition in ~~advance~~the ~~may~~5G beAI ~~due~~multimodal todigital ~~their~~business ~~high~~market, ~~trust~~the ~~and~~Company ~~satisfaction~~has established a good cooperative relationship with ~~the~~major ~~company’s~~customers ~~products~~in ororder ~~services. By~~to ~~offering~~quickly occupy the ~~option~~market, ofpromote ~~receiving~~the ~~money~~Company’s in5G ~~advance,~~AI ~~businesses~~multimodal ~~can~~digital ~~further~~business, ~~strengthen~~and ~~their~~temporarily ~~relationships~~yield ~~with~~profits ~~customers~~at this stage, ~~increase~~which ~~customer loyalty~~is ~~and~~a ~~promote~~period ~~long-term~~of ~~cooperation~~market expansion.

-2. ~~Cost~~Sales ofrebate ~~capital~~and ~~advantage~~marketing reasons: ~~The~~ ~~advance~~In ~~payment~~the ~~can~~marketing ~~reduce~~of 5G AI multimodal digital business, centralized procurement is made for customers’ prepaid accounts to ensure the ~~enterprise~~security of the Company’s ~~need~~funds. ~~for~~At ~~external~~this ~~financing~~stage, ~~thus~~sales ~~reducing~~to ~~financing~~customers ~~costs~~have a certain amount of sales rebates and marketing expenses.

46 3. According to the progress of the Company’s strategic development, the cost of marketing promotion and sales rebate will be reduced and the gross profit rate will gradually increase after the customer group is stable and competitive.

~~As of September 30, 2024 and June 30, 2024, the capital reserve balance was $45,268,415 and $38,957,780, respectively, an increase of $6,310,635 or 16~~4.~~20%~~ ~~from~~The ~~the beginning of the fiscal year, primarily due to an increase in the~~ Company’s ~~stock~~vigorously ~~offerings.~~expands ~~The~~5G ~~increase~~related ~~in capital reserve means that the enterprise has obtained additional funds~~businesses, ~~which can improve~~ the ~~overall~~most ~~financial~~important ~~strength~~purpose ofis ~~the~~to ~~enterprise,~~obtain somarket ~~that~~traffic the enterprise has more funds at its disposal during the operation process. With the increase of capital reserve, the capital adequacy ratio of enterprises has been improved, thus enhancing the financial stability and ~~anti-risk~~improve ~~ability~~market ofbrand ~~enterprises~~influence. ~~The~~It ~~capital~~can ~~increase~~let ofmore ~~major~~people ~~shareholders indicates~~know ~~that they are optimistic~~ about the ~~future prospects of the company~~Company, ~~believe that the company has growth potential,~~ and ~~are willing to invest more funds to support the development of the company. Enhance the strength of the company: Capital~~ increase ~~can~~its ~~provide~~exposure ~~more funds for the company to expand the scale of production, research~~ and ~~development of new products, expand the market, improve the financial situation, etc~~visibility., so5G asrelated toservices ~~enhance~~have ~~the~~become ~~competitiveness and profitability of the company. The capital increase of major shareholders can convey~~ a ~~signal~~tool ~~of positive development of the company~~ to ~~the~~attract ~~market~~traffic and ~~help~~improve ~~enhance investors’ confidence in the company. In the face of market volatility and uncertainty~~brands, ~~enterprises~~which can bedrive ~~more~~revenue confident to cope with challenges. An increase in capital reserves also increases net asset value per share and is a positive financial indicator for shareholders. This is conducive to enhancing the investment confidence of ~~shareholders~~other ~~and the market value of enterprises~~projects.4.

~~Going~~5. ~~forward~~Actively carrying out 5G AI multimodal digital related business can attract more users’ attention and establish a good interactive relationship with users, which can firmly obtain a large number of loyal long-term user groups for the Company, which has great potential for us to expand other revenue businesses and obtain new profit growth. It can drive business and revenue expansion in 5G AI micro, small and medium-sized enterprises platform, 5G Internet of Things and other fields. In addition, the Company will continue to deploy its 5G+AI digital system tailored to the needs of Meikang in more than 460 offline stores, providing personalized customer service, data-driven marketing and efficient store management, and is expected to earn more than 10% of the technical service fee revenue.

~~Datasea Inc~~6., asUpgrade athe ~~leading~~business ~~global~~model, ~~technology~~increase ~~company~~the ~~and~~proportion aof ~~practitioner~~sales of acoustic high-~~quality~~tech ~~development~~products, inScale-up ~~the~~of acoustic ~~intelligence~~disinfection ~~industry,~~products ~~is committed~~through tosigned ~~changing~~home ~~the~~beauty ~~world~~industry ~~with~~partners ~~sound,~~covering ~~rediscovering~~more ~~sound,~~than ~~and~~460 ~~constantly~~stores. ~~exploring~~Including ~~innovation~~ultrasonic ~~and~~sterilizers ~~development in the field of acoustic business~~ and 5Gnon-contact ~~applications.~~sleep ~~Looking ahead~~AIDS, wedriving ~~will~~sales ~~continue~~of tohigh-margin ~~consolidate~~acoustic ~~our~~products. ~~leadership~~As ~~and~~well ~~leading~~as ~~position in~~ the ~~field~~promotion of ~~acoustic high-tech~~different industry ~~and~~application ~~5G AI multimodal digitalization~~areas, ~~and~~high ~~actively~~additional ~~promote technological progress~~areas, ~~product~~improve ~~iteration~~gross ~~and~~profit ~~upgrade, and market expansion~~margin. ~~The following are our future growth strategies and focus areas:~~

17. ~~Innovation~~High ~~and~~gross ~~Market~~profit ~~Development~~acoustic inhigh ~~Acoustic High~~-~~Tech~~tech ~~Business:~~products ~~Datasea will deepen its research in ultrasonic, infrasonic, and other non~~short-~~audible~~term ~~mechanical~~plan ~~wave~~(Expected ~~technologies, continually optimizing acoustic algorithms~~ to ~~drive~~launch ~~innovative applications of acoustic AI~~ in ~~agriculture,~~2025): ~~healthcare,~~Applications ~~and~~of ~~wellness.~~environmental ~~Beyond~~acoustic ~~technical~~technology ~~R&D~~ and ~~new product development, the company aims to expand its sales scale in China through multiple channels, including online e~~cardio-~~commerce~~brain ~~and~~acoustic ~~live-streaming,~~technology toinclude: ~~enhance~~Pet ~~market~~disinfection ~~reach. In the U.S., Datasea will accelerate product promotion~~ and ~~market~~deodorization ~~penetration by working closely with partners and channel distributors~~purifier, ~~delivering~~mechanical ~~high~~wave-~~tech~~based ~~acoustic~~cortisol ~~solutions~~regulation todevice ~~global~~for ~~clients~~brain ~~and exploring new market opportunities~~tissue.

28. ~~Deepening~~High 5Ggross AIprofit ~~Multimodal~~acoustic ~~Digital~~high ~~Business:~~-tech ~~Datasea~~product ~~will~~long-term ~~strengthen~~planning: AIprecision ~~algorithm~~design ~~processing~~and ~~capabilities~~manufacturing toof ~~improve~~acoustic ~~the~~industrial ~~digital user experience~~products, ~~particularly~~acoustic inagricultural ~~providing efficient~~products, ~~intelligent~~acoustic ~~solutions~~medical ~~for industries such as logistics~~products, ~~beauty,~~acoustic ~~and~~medical ~~rural revitalization~~products, ~~while~~acoustic ~~continuously~~IoT ~~boosting revenue scale and gross margins.~~products

3. Market ~~Expansion~~ prospects and ~~Layout:~~technological While consolidating its domestic market, Datasea will actively expand into international markets through strategic partnerships, targeting emerging markets in North America, Southeast Asia, and beyond, with core products designed to meet global customer needs.innovation

47 From the perspective of market prospects, according to the prediction of Global Association for Mobile Communication Systems, by 2025, the number of 5G connections in China will exceed the sum of North America and Europe, ranking first in the world. The number of 5G connections will reach 460 million, accounting for 28% of the total connections in the country. 5G messaging has become an international standard.2 China will become one of the largest single contributors to the global growth of mobile internet users in the coming years, accounting for nearly 20% of the total global increase.

4. Sustainable Development: Committed to green technology, Datasea aims to reduce its carbon footprint by enhancing energy efficiency and using eco-friendly materials, while also actively engaging in social welfare projects to promote corporate responsibility and social impact.46

5.Combining the ~~Talent~~advantages ~~and~~of ~~Organizational~~“Internet ~~Development:~~of ~~The~~Things+” ~~company~~intelligent ~~will~~terminals ~~continue~~and to5G ~~attract~~Multimodal ~~globally~~industry ~~minded~~chain, ~~talent~~Shuhai Beijing is advancing with the time, ~~optimize~~taking ~~management~~the ~~structures~~train of the 5G era, and ~~stimulate~~developing ~~creativity~~5G ~~through~~Multimodal ~~equity~~communication/phone ~~incentives~~top up business. At this stage, ~~ensuring~~Shuhai Beijing is ~~organizational~~carrying ~~vitality~~out the development, operation and ~~competitive~~promotion ~~advantage~~services of the Internet of Things market and increasing the effective combination of resources with Mobile Internet enterprises and the Internet of Things industrial chain.

6.Technological innovation ~~Global M&A~~ and ~~Technology~~application ~~Collaboration:~~of Bydigital ~~leveraging~~sea mergers, acquisitions, and strategic partnerships, especially in the U.S. market, Datasea aims to integrate technology and market resources to deepen its acoustic intelligence footprint, achieving technical synergy and market expansion.platform

7.The 5G+AI ~~Intellectual~~multi-modal ~~Property~~digital platform of Suhai integrates advanced AI algorithms and ~~Brand~~multi-modal ~~Enhancement:~~data ~~Through~~processing ~~patent~~technology, ~~protection~~which can efficiently process multi-source data from text, image, audio, video and other sources, and provide accurate and efficient data support. The core advantage of ~~global~~this platform is the strong AI technology ~~innovations~~development capability, ~~Datasea~~which ~~will~~can ~~strengthen~~automate ~~brand~~complex ~~influence~~business processes and improve the efficiency and accuracy of data processing. By applying Transformer model to ~~secure~~multi-modal ~~its~~data ~~leading~~fusion, ~~position~~Suhai inrealizes the ~~global~~whole ~~acoustic~~process of ~~intelligence~~data ~~market~~collection, ~~thereby~~analysis ~~increasing~~and ~~brand~~decision ~~value~~making, which significantly improves service efficiency and user experience.

8.The platform ~~International~~has ~~Risk~~a ~~Control~~wide ~~Management:~~range ~~Datasea~~of ~~will~~application ~~establish~~scenarios, ainvolving ~~robust~~many ~~global~~fields ~~risk~~such ~~control~~as ~~system~~improving ~~through~~the ~~intelligent~~understanding ~~risk~~ability ~~control~~of artificial intelligence systems and ~~cross~~natural human-~~border~~computer ~~data~~interaction. ~~compliance~~Especially ~~management~~in the field of marketing, ~~ensuring~~the ~~stable~~application ~~operations~~of ~~amid~~AI ~~global~~digital ~~expansion~~human technology enables the platform to achieve automated promotion, intelligent content generation and accurate information transmission, further promoting the intelligence and efficiency of the platform.

~~These initiatives underscore Datasea’s commitment~~Future tooutlook ~~internationalization, innovation,~~ and ~~digital~~gross ~~development,~~margin driving sustained growth and industry leadership in the fields of acoustic intelligence and 5G digitalization. The company will continue to work with global clients and partners to create greater social value.improvement

~~Off~~In 2023, the 5G AI multimodal digital business of Shuhai Information accounts for a relatively large proportion of total revenue, because at this stage, the business belongs to the early stage of the development, operation and promotion services of the Internet of Things market, and the investment in all aspects is large. In addition, the gross profit of the traffic top-~~Balance~~up ~~Sheet~~business is generally low. As a result, the annual gross margin ~~Arrangements~~level is low, with a gross margin of about 0.9%. In 2024, through revenue diversification, the Company increased software copyright sales and 5G AI micro, small and medium-sized enterprise platform sales, while the sales of acoustic high-tech products have achieved a small launch, and these revenues belong to high gross profit products and services, generally pushing up the average level of gross profit margin. Gross margin of 2% in 2024.

~~There are~~The noCompany’s ~~off-balance~~focus on ~~sheet~~5G ~~arrangements~~AI ~~that~~multimodal ~~have~~top orup ~~are~~business ~~reasonably~~is ~~likely~~ to ~~have~~integrate anew ~~current~~resources, orexpand ~~future~~5G-related ~~effect~~new onbusiness, ~~our~~combined ~~financial~~with ~~condition,~~the Company’s deep ~~changes~~cultivation and accumulation in ~~financial~~5G ~~condition,~~AI ~~revenues~~digital related over the years, ~~expenses~~take this opportunity to develop more 5G-related business, ~~results~~use the private domain traffic of ~~operations~~end customers, ~~liquidity~~and convert it into end customers of acoustic high-tech products, ~~capital~~so ~~expenditures~~as orto ~~capital~~increase ~~resources~~the revenue of the Company’s two major business modules.

~~ITEM~~To increase 3the proportion of sales of acoustic high-tech products, Scale-up of acoustic disinfection products through signed home beauty industry partners covering more than 460 stores. ~~QUANTITATIVE~~Including ~~AND~~ultrasonic ~~QUALITATIVE~~sterilizers ~~DISCLOSURES~~and ~~ABOUT~~non-contact ~~MARKET~~sleep ~~RISK~~AIDS, driving sales of high-margin acoustic products. As well as the promotion of different industry application areas, high additional areas, improve gross profit margin.

In China’s mature and transparent market today, gross margins on services are far greater than those on hardware sales. The improvement of gross profit margin shows that the Company’s measures to improve gross profit margin are gradually showing effect: 1) costs will be reduced by economic scale over a larger number of customers base and the increase in production; 2) the Company, by adopting the differentiation strategy, grows brand recognition and customer loyalty, strengthening the Company’s pricing power; 3) As the scale of 5G AI multimodal communication traffic top up services and the number of serviced customers, along with service quality, continue to improve, customized and value-added services, as well as service fees, will gradually increase. This ~~item~~will isboost ~~not~~the ~~applicable~~profitability of the Company’s related businesses. The Company will continue to increase the share of high-gross profit products in the sales while increasing the revenue, so as weto ~~are~~further ~~currently~~improve the gross profit rate ~~considered~~ and give investors a ~~smaller~~better ~~reporting~~return ~~company~~on investment.

~~ITEM 4. CONTROLS AND PROCEDURES~~47

~~Disclosure~~Selling, General ~~Controls~~and Administrative, and ~~Procedures~~Research and Development Expenses

~~As required by Rule 13a-15 of the Securities Exchange~~Selling ~~Act~~ expenses ofwere ~~1934~~$407,669 ~~our~~and ~~principal~~$1,149,944 ~~executive~~for ~~officer~~the ~~and~~three ~~principal~~months ~~financial~~ended ~~officer~~December ~~evaluated~~31, ~~our~~2024 ~~disclosure controls~~ and ~~procedures (as defined~~2023, in respectively, ~~Rules~~representing ~~13a-15(e)~~a ordecrease ~~15d-15(e)~~ of ~~the Securities Exchange Act of 1934~~$742,275 asor ~~amended)~~64.5%. asThe ofdecrease ~~the~~was ~~end~~mainly ofdue to the ~~period~~decreased ~~covered~~in byadvertising ~~this~~and ~~report. Based~~marketing onexpenses ~~this~~by ~~evaluation~~$787,641, ~~our~~which ~~principal~~was ~~executive~~partly ~~officer~~offset by ~~and~~increased ~~principal~~payroll ~~financial~~expense ~~officer concluded that as of the end of the period covered~~ by ~~this report~~$20,027 ~~the Company’s disclosure controls~~ and ~~procedures~~increased ~~were~~other ~~not~~selling ~~effective.~~expenses ~~This~~by ~~conclusion was reached in light of the following material weaknesses in internal control over financial reporting:~~$25,339.

~~(i)~~Currently, we ~~inadequate~~are ~~segregation~~focusing on expanding the Company’s leading acoustics high-tech technologies and products and continuing to develop 5G-related applications. We incurred R&D expenses of ~~duties~~$74,402 and ~~effective~~$117,371 ~~risk~~during ~~assessment;~~the three months ended December 31, 2024, and 2023, respectively, which shows a $42,969 or 36.6% decrease by comparing with the same period of 2023.

~~(ii)~~Research and ~~lack~~development expenses of ~~personnel~~$74,402 ~~adequately~~for ~~trained~~three inmonths Uended December 31, 2024.S. ~~GAAP;~~The Company’s research and development results include but are not limited to the following:

As one of the leading service providers in China’s 5G AI multimodal digital field, Datasea has several primary products and services targeting different customers and needs, including: 5G AI multimodal new media marketing service platform,5G AI multimodal Smart Agriculture (~~iii~~Digital Rural) ~~insufficient~~Service ~~written~~Platform, ~~policies~~5G ~~and~~AI ~~procedures~~multimodal platform for ~~accounting~~small and ~~financial~~micro-enterprise ~~reporting~~services ~~with~~platform ~~respect~~and 5G AI multimodal traffic top up platform. 5G AI multimodal digital business applications applicable to ~~the~~various ~~requirements~~industries in China, and ~~application~~payment ofsystem ~~both~~applications combined ~~U.S.~~with ~~GAAP~~artificial intelligence (AI), big prediction mode and ~~SEC~~data ~~guidelines~~analysis capabilities.

48 Datasea has completed a revolutionary upgrade of its core 5G multimodal communication business with AI processing technology. Currently, it can achieve AI creation and generation of various information forms including sound, text, images, and videos, as well as efficient transmission and AI digital human marketing functions. This capability can empower numerous industries and clients with potent marketing and video matrix capabilities. It can contribute to clients in brand enhancement, customer acquisition, market promotion, and revenue uplift.

~~Management~~In the field of acoustic high-tech business, the Company is one of the units that proposed the concept of “acoustic effect” in the world, and exports acoustic high-tech products and solutions to the world. The Company combines basic acoustic theory with artificial intelligence, takes acoustic technology and acoustic effect as the technical system, and researches and applies non-audible mechanical wave effects to collect and process acoustic data and solve problems. Datasea utilizes cutting-edge technologies in the field of acoustic high technology and has the world’s ~~Strategies~~leading ~~for~~acoustic ~~Enhancing~~equipment to acoustic algorithm models. Acoustic technology and products are widely used in various ~~Internal~~industries ~~Control:~~and fields, including acoustic agricultural applications, acoustic industrial applications, acoustic medical, acoustic health and acoustic iot technology. Especially in the field of ultrasonic technology, the use of ultrasonic cavitation effect, thermal effect, mechanical effect to solve the needs of various application scenarios, to achieve disinfection and sterilization, crop drying, safety monitoring, beauty and skin care and medical health and other applications.

InOur ~~the~~Acoustics ~~previous~~and ~~fiscal~~5G ~~year,~~intelligent weproducts ~~recognized~~and ~~the~~solutions ~~weaknesses~~are inable ~~our~~to ~~internal~~serve ~~control~~more ~~over~~than ~~financial~~52 ~~reporting~~million enterprises and ~~have~~businesses ~~taken~~of ~~proactive~~all ~~steps~~types (over to99% ~~enhance~~are SMEs) and ~~refine~~households ~~our~~in ~~internal~~China ~~control~~with ~~framework.~~digital ~~These~~and ~~initiatives~~intelligent ~~primarily include:~~services.

1.Market Promotion Continuous Improvement of Internal Control Procedures: We remain committed to refining our internal control processes, encompassing various aspects such as the budget approval process, procurement and asset management, credit control, internal audits, and cost accounting. Additionally, we have compiled a comprehensive internal control policy, incorporating guidelines for procurement control, inventory management, and fraud prevention.Team

2.The ~~Collaborative~~Company ~~Oversight~~has ~~Mechanism:~~collaborated with Tothree ~~strengthen~~influential ~~internal~~Chinese ~~control~~market ~~implementation~~promotion enterprises, wewhich ~~have~~leverage ~~established~~extensive amarket ~~collaborative~~resources ~~mechanism~~to ~~between~~recommend ~~the~~new ~~internal~~clients ~~control~~for ~~department~~the Company and facilitate the ~~legal~~signing ~~department.~~of ~~This~~contracts ~~mechanism involves conducting interviews~~ with ~~department~~these ~~heads,~~new ~~promptly addressing identified risk areas, and ensuring corrective actions are taken~~clients.

3.General and ~~Engagement~~administration ~~with~~expenses ~~Financing~~increased ~~Underwriters:~~$550,277, Weor ~~have~~88.3% ~~engaged~~from ~~financing~~$623,456 ~~underwriters~~during tothe ~~work~~three ~~closely~~months ~~with~~ended ~~our~~December ~~international~~31, ~~department~~2023, to ~~facilitate~~$1,173,733 during the ~~company’s~~three ~~financing~~months ~~efforts~~ended December 31, 2024. ~~This~~The ~~partnership~~increase ~~aims~~was mainly due to ~~improve~~increased ~~our~~professional ~~understanding~~service fee by $378,750, increased amortization expense of ~~investor~~intangible ~~backgrounds~~assets by $161,704 and ~~identify~~increased ~~financing~~auto ~~methods~~expense ~~that~~by ~~align~~$29,592, ~~best~~which ~~with~~was ~~our~~partly ~~objectives~~offset by decreased travel expense by $17,004.

4.We are ~~Enhanced~~treating ~~Collaboration~~human ~~with~~capital ~~Legal~~as ~~Professionals:~~a Wekey ~~are~~indicator ~~reinforcing~~to ~~collaboration~~drive ~~between~~business ~~our~~growth ~~internal~~ and ~~external~~technical ~~legal~~innovation, ~~teams~~also topursuing ~~proactively~~better ~~mitigate~~integrated ~~risks~~channels with related industries.

In addition to these efforts, we have adopted various internal control policies, including the review of accounting personnel duties and responsibilities, travel allowances, reimbursement procedures, receivable management, asset control, internal audit processes, and cost accounting. Furthermore, we have established an internal audit department under the leadership of a director of internal audit, along with a legal team, to ensure compliance and effective risk management.48

~~Further Enhancements~~Non-Operating ~~Include:~~Income (Expenses), net

5.Non-operating income ~~Personnel~~was ~~Training:~~$110,636 Wefor ~~are~~the ~~committed~~three tomonths ~~training~~ended ~~our~~December ~~staff~~31, to2024, ~~ensure~~consisting mainly of interest income of $875 and other income of $109,761. Non-operating expenses were $44,564 for the three ~~proper~~months ~~execution~~ended December 31, 2023, consisting mainly of ~~internal~~interest ~~control~~income ~~policies~~of $1,623 and other ~~procedures~~expenses of $46,187.

6.Net Loss ~~Regular~~from ~~Reporting~~continuing ~~to the Audit Committee: We will continue to provide quarterly summaries of internal control and audit reports to the Audit Committee.~~operation

7.We generated ~~Quarterly~~net ~~Review~~loss ~~with~~from ~~U.S.~~continuing ~~CPA:~~operation ~~Each~~of ~~quarter~~$1,127,716 weand ~~will~~$1,833,100 ~~conduct~~for the three months ended December 31, 2024, and 2023, respectively, a ~~trial~~$705,384 ~~balance~~or ~~review~~38.5% indecrease ~~collaboration~~as compared with athe Usame period of 2023.S. ~~Certified~~The ~~Public~~decrease ~~Accountant~~in ~~(CPA)~~net ~~after~~loss ~~their~~was ~~review~~mainly ordue ~~audit~~to the increase in gross profit, increase in other income and decrease in operating expenses as explained above.

49 Comparison of the six months ended December 31, 2024, and 2023

~~Specifically~~The we following ~~have~~table ~~also~~sets ~~implemented~~forth the ~~following~~results ~~practices~~of toour ~~enhance~~operations ~~Datasea~~for ~~featured~~the ~~internal~~six ~~control~~months ~~system:~~ended December 31, 2024, and 2023, respectively, indicated as a percentage of net sales. Certain columns may not add up due to rounding.

1. Projects Pre-approval:

	2024			% of Revenues			2023			% of Revenues
Revenues	$	41,537,498					$	18,229,212
Cost of revenues		40,923,065			98.5	%		18,052,242			99.0	%
Gross profit		614,433			1.5	%		176,970			1.1	%
Selling expenses		1,403,718			3.4	%		1,234,391			6.8	%
Research and development		177,481			0.4	%		272,375			1.5	%
General and administrative expenses		2,302,136			5.5	%		1,316,516			7.2	%
Total operating expenses		3,883,335			9.3	%		2,823,282			15.5	%
Loss from operations		(3,268,902	)		(7.9	)%		(2,646,312	)		(14.5	)%
Non-operating income (expenses), net		170,517			0.4	%		(52,322	)		(0.3	)%
Loss before income taxes		(3,098,385	)		(7.5	)%		(2,698,634	)		(14.8	)%
Income tax expense		-			-	%		-				%
Loss before noncontrolling interest from continuing operation		(3,098,385	)		(7.5	)%		(2,698,634	)		(14.8	)%
Income before noncontrolling interest from discontinued operation		-			-	%		833,546			4.6	%
Less: loss attributable to noncontrolling interest from continuing operation		(118	)		(0.0003	)%		(9,993	)		(0.1	)%
Net loss to the Company from continuing operation		(3,098,267	)		(7.5	)%		(2,688,641	)		(14.7	)%
Net income (loss) to the Company from discontinued operation		-			-	%		833,546			4.6	%
Net loss to the Company	$	(3,098,267	)		(7.5	)%		(1,855,095	)		(10.2	)%

We have carried out project development at irregular intervals according to the needs of business development. Before the project is officially initiated, we have organized the setup of the project review group. The project review group has mainly reviewed the project’s market development prospect report, project proposal, project report and other documentations that are prepared by the project development team. After communication and discussion by the review team, the project will be formally approved.Revenues

2We had revenues of $41,537,498 and $18,229,212 for the six months ended December 31, 2024, and 2023, respectively, which shows a $23,308,286 or 127.86% ~~Significant~~increase ~~Issues:~~ as compared with the same period of 2023.. The increase in revenues was mainly due to the rapid increase of 5G AI multimodal digital business in China. For the six months ended December 31, 2024, revenues mainly consisted of service fees from our 5G AI Multimodal digital. The Company’s 5G AI multimodal digital business is an industry leader, and the continued expansion of the Company’s customer base supports the continued significant improvement of the business.

Significant issues will go through meetings of the President’s Office. During those meetings, the Company’s strategic adjustments of the business and major projects or events will be discussed. Only after the board meeting or the resolution of the board of directors, the decisions will be implemented in accordance with the meetings.49

From July 1, 2024, to December 31, 2024, the Company generated revenue of $41,537,498, including $41,161,572 from the 5G AI multimodal digital business, $3,046 from Smart City Business, $45,768 from acoustic intelligence business and $326,936 from software licensing. HRFrom ~~Management~~July 1, 2023, to December 31, 2023, the Company generated revenue of $18,229,212, including $18,156,782 ~~Responsibility~~ from the 5G messaging business, ~~Rewards~~$69,288 from other services and ~~Penalties~~$3,142 ~~System:~~from the acoustic intelligence.

WeThis ~~have~~is ~~strict~~inseparable ~~control over talents and their efficiency,~~ from the ~~probation~~Company’s ~~period~~research toand ~~the~~development ~~conversion~~support toand ~~regular~~personnel ~~employees.~~support ~~After~~over the ~~employees passing the strict evaluation~~years, ~~they will be included in~~ the ~~regular~~Company’s ~~employees pool~~ upstream and ~~sign~~downstream ~~the~~chain ~~job~~maintenance ~~responsibility letter~~ and ~~performance commitment~~experience ~~letter.~~accumulation ~~They will go through monthly performance assessment~~ and ~~evaluation~~precipitation aseventually ~~the~~formed ~~basis~~a ~~for~~huge ~~salary~~loyal ~~settlement.~~customer Webase, ~~will~~but ~~give~~also ~~rewards~~closely torelated ~~employees with excellent performance from time~~ to ~~time, and~~ the ~~rewards~~thriving ~~are~~vitality ~~not~~of ~~limited~~the to5G ~~cash and stocks~~market. ~~We also gives certain penalty measures for employees’ work mistakes, such as deduction of performance-based salary.~~

4Through its own sales team, the Company vigorously promotes and publicizes its research and development results and technology display in 5G sales, actively participates in important seminars and business fairs around the country and deeply explores the target customers related to 5G news. ~~Budget~~Through ~~Management:~~painstaking efforts and keen business acumen, we have actually obtained a stable customer flow.

The ~~internal~~ ~~control~~Company’s ~~department~~top five ~~organizes~~customers ~~all~~for ~~departments~~5G toAI ~~participate~~multimodal indigital ~~the~~business ~~full~~at ~~budget~~this ~~formulation~~stage ~~and~~are ~~budget~~Qingdao ~~implementation,~~Ruizhi ~~and~~Yixing ~~comprehensively develop~~Information ~~and~~Technology ~~implement~~Co., ~~the~~LTD., ~~annual~~Shanghai Shixun ~~full~~Network ~~budget~~Technology ~~data according to funds~~Co., ~~assets~~LTD., ~~project~~Wuhan ~~initiation,~~Xiaoming ~~business~~Technology ~~line revenue~~Co., ~~and costs~~LTD., ~~The internal~~Xinyi ~~control~~Xinfanfa ~~center~~Information ~~strictly~~Technology ~~controls the budget~~Co. ~~The execution department~~, ~~the finance department~~LTD., ~~the~~Nanjing ~~CEO and the chairman of the~~Linghui ~~board~~Information ~~jointly~~Engineering ~~approve and execute the budget~~Co. ~~In the process of budget implementation~~, weLTD. ~~adopt~~Through ~~the~~close ~~monthly~~business ~~rolling budget system~~cooperation, ~~and~~ the ~~Group~~above ~~financial~~customers ~~management~~have ~~internal~~become ~~control~~stable ~~center~~and ~~makes~~loyal ~~statistical~~partners ~~analysis~~ of the ~~implementation results to help each business~~ ~~unit~~Company ~~complete the performance targets~~ and ~~strive~~will towork ~~achieve~~together ~~the~~in ~~annual target of~~ the ~~Group company~~future.

5In terms of marketing promotion, the Company has hired a professional cooperative marketing team to identify and recruit suitable, high-quality, and stable customers. ~~Operation~~Since the fourth quarter of 2023, the sales of the Company’s 5G Multimodal communication business has experienced explosive ~~Management:~~growth, with the sales in the second quarter of 2024 showing significant increase compared to the previous quarter.

~~We combine~~Currently, ~~centralized~~the Company’s research and ~~decentralized~~development ~~management~~technology ~~styles~~in ~~according~~5G toAI multimodal digital is leading the ~~business~~industry. ~~line~~After ~~types~~expanding ~~and~~its ~~operating~~customer ~~characteristics~~base ofover ~~each~~the ~~subsidiary~~long ofterm, the ~~group.~~Company Wehas ~~will~~established ~~give~~a ~~our~~stable ~~subsidiaries~~group ~~certain~~of ~~management~~clients. ~~rights~~Additionally, sothe ~~that~~Company wehas ~~will~~hired ~~not~~a ~~miss~~professional ~~any~~team ~~business~~to ~~opportunities.~~promote Inits ~~terms of~~5G ~~production~~Multimodal ~~and~~communication ~~operation,~~business ~~from~~p. ~~project~~We ~~initiation,~~signed ~~procurement~~5G tocommunication ~~sales,~~marketing weservice ~~have~~agreements awith ~~complete~~several ~~control~~marketing ~~process.~~companies ~~For~~that ~~example, before purchasing,~~have weextensive ~~need~~experience ~~to look around~~ in ~~the~~IoT market ~~and~~development, ~~select~~operations, ~~high-quality~~and ~~suppliers~~promotion ~~after~~services. ~~the~~These ~~audit~~companies ofhave ~~the~~strong ~~group’s~~integration ~~financial~~with ~~management internal~~mobile ~~control~~Internet ~~center.~~enterprises, Wethe ~~are~~IoT ~~willing~~industry tochain, ~~build long-term stable~~ and ~~friendly~~other ~~cooperation~~resources, along with ~~high-quality~~impressive ~~suppliers.~~capabilities Wein ~~will~~channel ~~develop~~expansion, asales, ~~complete~~and ~~process~~operations. ~~from~~This ~~the~~business ~~product~~segment ~~check-in~~represents tostable ~~check-out.~~growth ~~After~~of the ~~approval~~Company, ofand ~~all~~moving ~~parties~~forward, ~~the~~we ~~procedure~~will ofcontinue ~~product~~to ~~check-out~~expand ~~will~~steadily, ~~be completed~~and torapidly ~~avoid~~in ~~risks~~the 5G AI multimodal digital business.

6Furthermore, in terms of the commercialization of acoustic technology, we are scaling up acoustic disinfection products through partnerships with home beauty industry companies, which cover over 460 stores. ~~Business~~These products Include ultrasonic sterilizers and non-contact sleep aids. These advanced ~~Development~~acoustic ~~Personnel~~technology ~~Management:~~products not only enhance the service quality of partner stores but also improve the customer experience and drive sales.

~~For~~Regarding ~~excellent~~ the ~~business~~expansion ~~development~~of ~~personnel,~~the we5G ~~formulate~~+ ~~relevant~~AI ~~royalty~~digital ~~management~~health ~~measures~~system, ~~with~~The ~~comprehensive~~Company ~~considerations~~will ~~about~~continue ~~different~~to deploy its ~~lines~~ 5G+AI ofdigital ~~business~~system, ~~different~~tailored ~~products~~to ~~combined~~the ~~with~~needs ~~different~~of ~~market~~Meikang, ~~conditions.~~in Weover ~~distribute~~460 ~~salary~~offline ~~and bonus according to performance~~stores. This ~~Business~~ system ~~development~~will ~~personnel~~provide ~~who~~personalized ~~successfully~~customer ~~complete~~service, ~~the~~data-driven ~~sales~~marketing ~~target~~and ~~can~~efficient ~~get generous remuneration. These measures actively motivate~~store ~~business~~ management, ~~development~~generating ~~personnel~~revenues tothrough ~~complete~~technical ~~the~~service ~~group’s annual performance goals~~fees.

~~Changes in Internal Control over Financial~~Cost ~~Reporting~~of Revenues

~~Other~~For the ~~than~~six asmonths ~~described~~ended ~~above~~December 31, ~~there~~2024, ~~were~~we norecorded ~~changes~~ a cost of revenues of $40,923,065, compared to $18,052,242 for the same period in 2023, ~~our~~reflecting ~~internal~~an ~~control~~increase ~~over~~of ~~financial~~$22,870,823. ~~reporting~~The ~~during~~cost of revenues for the ~~quarter~~six ~~ending~~months ~~September~~ended 30December 31, 2024, ~~that~~was ~~have~~primarily ~~materially~~driven ~~affected~~by 5G orAI ~~are~~multimodal ~~reasonably~~digital platform fees and cloud platform construction costs paid to suppliers. The increase in the cost of revenues ~~likely~~was mainly due to ~~materially~~the ~~affect,~~higher ~~our~~revenue ~~internal~~generated ~~control~~from ~~over~~the ~~financial~~5G ~~reporting~~AI multimodal digital segment.

50 For the six months ended December 31, 2024, the costs were as follows: $40.59 million for 5G AI multimodal digital, $1,716 for smart city, $317,414 for software licensing, and $16,593 for the acoustic intelligence business. For the six months ended December 31, 2023, the costs were as follows: $17.98 million for 5G multimodal communication, $68,142 for other services, and $141 for the intelligent acoustics business.

~~PART II OTHER INFORMATION~~50

~~ITEM 1. LEGAL PROCEEDINGS~~Gross Profit

WeGross profit ~~are~~for ~~not~~the asix ~~party~~months ended December 31, 2024, was $614,433 compared to ~~any~~$176,970 ~~pending~~for ~~legal~~the ~~proceedings~~six ~~and~~months noended ~~such~~December ~~proceedings~~31, 2023, representing ~~are~~an ~~known~~increase toof be$437,463. ~~contemplated~~This increase in gross profit was primarily driven by higher sales during the six months ended December 31, 2024.

~~ITEM~~Gross 1Amargin was 1.5% ~~RISK~~for ~~FACTORS~~the six months ended December 31, 2024, compared to 1.0% for the same period in 2023.The increase in gross margin was mainly due to the Company’s significant increase in market share and operating income. The growth in gross profit indicates that the Company has substantial development potential in its operations, including:

~~Not~~● ~~required~~Improved ofShareholder ~~smaller~~Returns: ~~reporting~~An ~~companies~~increase in gross profit typically leads to higher net profit, which boosts dividend distribution and stock value for shareholders. This, in turn, enhances shareholder confidence and attracts more investors.

~~ITEM~~● 2Consolidation of Market Position: A higher gross profit makes the Company more competitive, enabling it to attract more customers through price advantages, superior product quality, or service differentiation. ~~UNREGISTERED~~This ~~SALES~~allows OFthe ~~EQUITY~~Company ~~SECURITIES~~to ~~AND~~expand ~~USE~~its OFmarket ~~PROCEEDS~~share and further strengthen its position in the market.

~~Shares~~● ~~Issued~~Innovation and R&D Investment: The increase in gross profit provides the Company with more resources for ~~Equity Financing~~innovation and R&D. This supports the development of new products, improvements to existing offerings, and the ability to adapt to changing market demands, all of which contribute to maintaining technological leadership and sustainable growth.

~~As of September~~Improving ~~30,~~Business ~~2024,~~Model ~~the~~Integration ~~Company issued 1,932,224 shares of the Company’s common stock to three non-U.S investors including the Company’s CEO~~ and ~~one~~Market ~~of the directors, at price of $2.06 per share. The Company received the proceeds in full from this offering at October 15, 2024.~~Channels:

On● ~~July 2,~~Use ~~2024,~~Multiple ~~the~~Marketing ~~Company~~Channels: ~~entered~~By ~~into~~optimizing ~~a securities purchase agreement, pursuant to which the Company agreed to issue~~ and ~~sell~~integrating tovarious anmarketing ~~investor in a registered direct offering 179~~channels,~~400~~ ~~shares of~~ the Company’s ~~common~~can ~~stock,~~reach at a ~~price~~broader ofrange ~~$3.25 per share and pre-funded warrants to purchase up to 512,908 shares~~ of ~~Common~~target Stock at a price of $3.24 per share with an exercise price of $0.01 per share (the “Pre-Funded Warrants”). The Pre-Funded Warrants are exercisable upon issuance and will remain exercisable until all the Pre-Funded Warrants are exercised in full. In connection with the Offeringcustomers, onimprove ~~July 2~~efficiency, ~~2024,~~meet ~~the~~customer ~~Company entered into a placement agency agreement with EF Hutton LLC (the “Placement Agent”). Pursuant to the terms of the placement agency agreement~~needs, ~~the~~and ~~Company~~reduce ~~will pay the placement agent a cash fee of 6~~risks.5% ofThis ~~the~~multi-channel ~~gross~~strategy ~~proceeds~~enhances the ~~Company~~effectiveness ~~receives in the offering at closing. The Company also agreed to reimburse the Placement Agent at the closing~~ of ~~the~~market ~~Offering~~coverage, ~~for~~positioning ~~expenses incurred, including disbursements of its legal counsel, in an amount not to exceed an aggregate of $75,000. The closing of~~ the offering occurred on July 3, 2024. The Pre-Funded Warrants were exercised in full as of September 30, 2024. The gross proceeds of the Offering are approximately $2.25 million before deducting fees to the Company~~’s placement~~ ~~agent and other offering expenses payable by the Company,~~ for ~~which~~success ~~was~~in ~~$0.29 million. The Company intends to use~~ the ~~net proceeds~~competitive ~~from the Offering for research and development, market development and for general corporate purposes~~landscape.

~~Shares~~● ~~Issued~~Enhance ~~for~~Product ~~Acquiring Intangible~~Brand: ~~Assets~~Strengthening ~~from~~brand ~~Related~~image ~~Parties~~is key to building customer loyalty and recognition. The Company should focus on designing a unique brand identity, unifying its image, and leveraging word-of-mouth marketing through social media to increase brand visibility and authority. Continuous maintenance of the brand’s image will improve product strength and creativity.

On● ~~August 9,~~Improve ~~2024,~~Sales ~~the~~Personnel ~~Company~~Effectiveness: ~~entered~~Salespeople ~~into~~should anbe ~~intellectual~~focused ~~property~~on ~~purchase~~achieving ~~agreement~~results, ~~with~~ensuring ~~Ms.~~that ~~Zhixin~~every ~~Liu,~~sales ~~the~~activity ~~Company’s~~addresses ~~Chairwoman~~customer ~~and CEO,~~pain ~~pursuant~~points toand ~~which~~drives Msconversions. ~~Zhixin~~A ~~Liu~~deep ~~transferred~~understanding toof ~~the~~customer ~~Company two intangible~~needs ~~assets~~allows ~~(software~~for ~~copyrights)~~tailored ~~owned~~solutions, byfostering ~~her~~trust ~~personally~~and recognition. ~~The~~ ~~Committee~~Salespeople ~~has~~should ~~decided~~continuously toenhance ~~grant~~their ~~Zhixin~~communication ~~Liu 398~~and negotiation skills,~~925 restricted~~ ~~shares~~undergo ~~for~~professional development, and adapt to market changes in order to provide the ~~purchase~~best ofpossible ~~this~~customer ~~software~~service.

On● ~~August 9,~~Foster ~~2024~~Innovative Product Development and Production: To maintain competitiveness and achieve sustainable development, the Company ~~entered~~should ~~into~~increase aninvestment ~~intellectual~~in ~~property~~R&D ~~purchase~~and ~~agreement~~deepen ~~with~~its ~~Mr.~~understanding Fuof ~~Liu,~~market ~~the~~needs. ~~Company’s~~Building ~~director~~a culture of ~~board~~innovation, ~~pursuant~~ toencouraging ~~which~~employee Mrcreativity, and collaborating with universities and research institutions will drive progress. FuParticipation ~~Liu~~in ~~transferred~~industry toexhibitions and seminars will facilitate knowledge exchange, helping the Company ~~two intangible~~ ~~assets~~stay ~~(software~~updated ~~copyrights)~~on ~~owned~~the bylatest ~~himself~~technologies. ~~The~~Optimizing ~~Committee has~~the ~~decided~~product todevelopment ~~grant~~process Fuand ~~Liu 398,925 restricted~~protecting ~~shares~~intellectual ~~for~~property ~~the~~through ~~purchase~~patents ofand ~~this~~trademarks ~~software~~will safeguard the Company’s innovations.

51 ● By focusing on these areas, the Company can strengthen its position in the market, enhance its growth potential, and continue to deliver value to shareholders and customers alike.

~~Shares to Independent Directors as Compensation~~51

~~During the three months ended September 30~~Selling, ~~2024, the Company recorded $4,500 stock compensation expense to independent directors through the issuance of shares~~ ofGeneral ~~the~~and ~~Company’s common stock at the market price of the stock issuance date~~Administrative, ~~pursuant~~and toResearch ~~the~~and ~~2018~~Development ~~Equity Incentive Plan.~~Expenses

~~ITEM~~Selling 3expenses for the six months ended December 31, 2024 were $1,403,718, compared to $1,234,391 for the same period in 2023, reflecting an increase of $169,327, or 13.72%. ~~DEFAULTS~~The ~~UPON~~increase ~~SENIOR~~was ~~SECURITIES~~mainly due to the increase advertising and marketing expenses, which rose by $96,760, increased in service fee by $16,008, increased in payroll expense by $15,862, and increased in other selling expenses by $36,966.

~~None~~Currently, we are focusing on expanding the Company’s leading acoustics high-tech technologies and products, while continuing to develop 5G-related applications. We incurred R&D expenses of $177,481 and $272,375 during the six months ended December 31, 2024, and 2023, respectively, representing a decrease of $94,894 or 34.84% as compared to the same period of 2023.

~~ITEM~~Research and 4development expenses for the six months ended December 31, 2024, totaled $177,481. ~~MINE~~The ~~SAFETY~~Company’s ~~DISCLOSURES~~research and development efforts have yielded several significant outcomes, including:

~~Not~~As ~~applicable~~one of the leading service providers in China’s 5G AI multimodal digital field, Datasea has developed a range of primary products and services targeting different customer needs. These include:

~~ITEM~~o 5.5G ~~OTHER~~AI ~~INFORMATION~~multimodal new media marketing service platform

~~During~~o ~~the~~5G ~~three~~AI ~~months~~multimodal ~~ended~~Smart ~~September~~Agriculture 30, 2024, there were no modifications, adoptions or terminations by any directors or officers to any contract, instruction or written plan for the purchase or sale of securities of the Company that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(cDigital Rural) ~~or non-Rule~~ ~~10b5-1 trading~~Service ~~agreements.~~Platform

~~ITEM~~o 6.5G ~~EXHIBITS.~~AI multimodal platform for small and micro-enterprise services

Exhibit		Description
31.1		Certification by Principal Executive Officer pursuant to Sarbanes Oxley Section 302
31.2		Certification by Principal Financial Officer pursuant to Sarbanes Oxley Section 302
32.1*		Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350
32.2*		Certification by Principal Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document XBRL
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

5G AI multimodal traffic top-up platform These 5G AI multimodal digital business applications are designed for various industries in China, incorporating AI-driven payment system applications, big data analytics, and predictive models.

*● ~~The~~Datasea ~~certifications~~has ~~attached~~completed asa ~~Exhibits~~revolutionary ~~32.1~~upgrade ~~and~~of ~~32.2~~its ~~accompany~~core ~~this~~5G ~~quarterly~~multimodal ~~report~~communication onbusiness ~~Form~~with ~~10-Q~~AI ~~pursuant~~processing totechnology. 18This ~~U.S.C.~~upgrade ~~Section~~enables ~~1350,~~the asAI ~~adopted~~creation ~~pursuant~~and togeneration ~~Section~~of ~~906~~diverse forms of ~~the~~information, ~~Sarbanes-Oxley~~including ~~Act~~sound, oftext, ~~2002~~images, and ~~shall~~videos. ~~not~~Additionally, beit ~~deemed~~supports ~~“filed”~~efficient bytransmission ~~the~~and ~~Registrant~~AI-powered ~~for~~digital ~~purposes~~human ofmarketing ~~Section~~functions. 18This ofcapability ~~the~~empowers ~~Securities~~numerous ~~Exchange~~industries ~~Act~~and ofclients ~~1934~~by enhancing brand recognition, asacquiring ~~amended~~customers, promoting markets, and boosting revenue.

52 ● In the field of acoustic high-tech business, Datasea is one of the pioneers in introducing the concept of “acoustic effect” globally. The Company exports cutting-edge acoustic high-tech products and solutions worldwide. Combining basic acoustic theory with artificial intelligence, Datasea applies acoustic technology and the acoustic effect technical system to collect and process acoustic data. The Company utilizes non-audible mechanical wave effects to address various challenges. With world-leading acoustic equipment and algorithm models, Datasea’s acoustic technologies and products are widely used in sectors such as agriculture, industry, healthcare, and IoT technology. Notably, in the field of ultrasonic technology, the Company applies the effects of ultrasonic cavitation, thermal, and mechanical forces to meet diverse needs, including disinfection and sterilization, crop drying, safety monitoring, beauty and skincare, as well as medical health applications.

~~SIGNATURES~~● Datasea’s Acoustics and 5G intelligent products and solutions serve over 52 million businesses and households across China (with more than 99% being SMEs) by providing digital and intelligent services.

~~In accordance with Section 13 or 15(d) of the~~Market ~~Exchange~~Promotion ~~Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~Team

	DATASEA INC.
Date: November 13, 2024	By:	/s/ Zhixin Liu
	Name:	Zhixin Liu
	Title:	President
		Chief Executive Officer
		(principal executive officer)

The Company has collaborated with three influential Chinese market promotion enterprises, which leverage extensive market resources to recommend new clients for the Company and facilitate the signing of contracts with these new clients.

Date: November 13, 2024	By:	/s/ Mingzhou Sun
	Name:	Mingzhou Sun
	Title:	Chief Financial Officer
		(principal financial officer and principal accounting officer)

General and administration expenses increased $985,620, or 74.87% from $1,316,516 during the six months ended December 31, 2023, to $2,302,136 during the six months ended December 31, 2024. The increase was mainly due to increased stock compensation expense by $514,297, increased in professional service fee by $369,845, increased in amortization expense of intangible assets by $113,862, increased in auto expense by $31,540, increased employee welfare expense by $11,116, and increased in meeting related expense by $10,327, which was partly offset by decreased payroll expense by $79,472.

53We are treating human capital as a key indicator to drive business growth and technical innovation, also pursuing better integrated channels with related industries.

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Non-Operating Income (Expenses), net

Non-operating income was $170,517 for the six months ended December 31, 2024, consisting mainly of interest income of $4,930 and other income of $165,587. Non-operating expenses were $52,322 for the six months ended December 31, 2023, consisting mainly of interest income of $1,729 and other expenses of $54,051.

Net (Income) Loss from Discontinued Operation

We generated net income from discontinued operation of $833,546 (which was the gain on disposal of Zhangxun) for the six months ended December 31, 2023.

Net Loss from continuing operation

We generated net loss from continuing operation of $3,098,267 and $2,688,641 for the six months ended December 31, 2024, and 2023, respectively, an $409,626 or 15.24% increase by comparing with the same period of 2023. The increase in net loss was mainly due to the increase in operating expenses which was partly offset by increased gross profit as explained above.

Accounts receivable

The operating revenue of the six months ended December 31, 2024, was $41,537,498, the balance of accounts receivable was $210,980 at December 31, 2024. In the same period last year, the operating revenue was $18,229,212, and the accounts receivable balance was $54,123 at December 31, 2023. This quarter, the Company further segmented the market, planned eight regional headquarters, strengthened the collection control, and promoted the fund collection of contracted delivery projects, which led to the benign return of funds and had a far-reaching impact on the future.

Liquidity and Capital Resources

Historically, we have funded our operations primarily through the sale of our common stock and shareholder loans. To strengthe our ability to continue operating as a going concern, we are focusing on generating recurring revenues and sustainable operating cash flows.

We expect to generate revenue through expanding our current 5G AI multimodal digital business and acoustic intelligence business, alongwith continuous product innovation and development as well as various types of value-added services. To maintain sufficient working capital to support our operations and finance the future growth, we anticipate addressing any cash flow shortfall through financial support from our majority stockholders (who are also our board members or officers) and issuing securities public or private issuance of securities. However, such additional financial resources may not be available to us on favorable terms, or at all, if and when needed.

As of December 31, 2024, we had a working capital deficit of $965,209 or a current ratio of 0.62:1, and current assets in the amount of $1,595,096. As of June 30, 2024, our working capital deficit was $952,090, with a current ratio of 0.74:1, and current assets were $2,647,892.

We expect the Company to continue supporting its ongoing operations and financing through revenue growth and increased financing activities. However, there is no assurance that the Company will be able to secure such additional working capital on commercially viable terms, or at all.

The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended December 31, 2024, and 2023, respectively.

	2024			2023
Net cash used in operating activities	$	(1,587,572	)	$	(5,633,283	)
Net cash used in investing activities	$	(3,957,527	)	$	(71,816	)
Net cash provided by financing activities	$	5,659,128		$	6,241,781

Cash Flow from Operating Activities

Net cash used in operating activities was $1,587,572 during the six months ended December 31, 2024, compared to net cash used in operating activities of $5,633,283 during the six months ended December 31, 2023, a decrease in cash outflow of $4,045,711.

The decrease in cash outflow was mainly due to (1) increased collection of accounts receivable by $557,800, (2) decreased cash outflow on prepaid expenses and other current assets by $3.39 million, (3) increased payment received from customers for unearned revenue by $549,360, and (4) decreased payment on lease liabilities by $40,758, despite we had increased cash outflow on accounts payable by $0.62 million.

Cash Flow from Investing Activities

Net cash used in investing activities totaled $3.96 million for the six months ended December 31, 2024, which consisted of cash paid for the acquisition of office furniture and equipment of $7,255 and cash paid for acquisition of intangible assets by $3.95 million. Net cash used in investing activities totaled $71,816 for the six months ended December 31, 2023, which consisted of cash paid for the acquisition of office furniture and equipment of $3,683, cash paid for acquisition of intangible assets by $68,098, and cash loss due to disposal of subsidiary of $35.

Cash Flow from Financing Activities

Net cash provided by financing activities was $5,659,128 during the six months ended December 31, 2024, which was net proceeds from sale of our common stock through an equity financing of 5,939,133, which was partly offset by repayment of loan payables of $40,698 and repayment to related parties of $239,307. Net cash provided by financing activities was $6,241,781 during the six months ended December 31, 2023, which was the net proceeds from loans payable of $153,659, from related parties of $116,841 and net proceeds from sale of our common stock through an equity financing of $8,061,286, which was partly offset by repayment of loan payables of $2,090,005.

Loan from banks

On April 10, 2024, Guozhong Times entered into a loan agreement with the Bank of Beijing in the amount of RMB 500,000 ($70,158) for a term of 12 months, and a preferential annual interest rate of 3.45% payable on the 21^st of each month. For the three and six months ended December 31, 2024, the Company recorded and paid $610 and $1,229, respectively, in interest expense for this loan. As of December 31, 2024, $69,557 was recorded as current liabilities.

On April 23, 2024, Guozhong Times entered into a loan agreement with the Beijing Rural Commercial Bank Economic and Technological Development Zone Branch in the amount of RMB 550,000 ($77,173) for a term of 12 months and an annual interest rate of 4.95% payable on the 21^st of each month. For the three and six months ended December 31, 2024, the Company recorded and paid $961 and $1,939, respectively, in interest expense for this loan. As of December 31, 2024, $76,512 was recorded as current liabilities.

On April 25, 2024, Shuhai Beijing entered into a loan agreement with the Industrial Bank Co., Ltd in the amount of RMB 2,000,000 ($280,631) for a term of 12 months and a preferential annual interest rate of 3.88%, payable on the 21st of each month. For the three and six months ended December 31, 2024, the Company recorded and paid $2,741 and $5,527, respectively, in interest expense for this loan. As of December 31, 2024, $278,226 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.

On May 28, 2024, Guozhong Times entered into a loan agreement with China Everbright Bank in the amount of RMB 1,000,000 ($140,315) for a term of 12 months, and an annual interest rate of 3.4%, payable on the21^st of each month. For the three and six months ended December 31, 2024, the Company recorded and paid $1,201 and $2,422, respectively, in interest expense for this loan. As of December 31, 2024, $139,113 was recorded as current liabilities.

On June 20, 2024, Shuhai Beijing entered into a loan agreement with the Bank of China for the amount of RMB 4,000,000 ($561,262) for a term of 12 months and a preferential annual interest rate of 2.30% payable on the 21st of the third months of each quarter. For the three and six months ended December 31, 2024, the Company recorded and paid $3,518 and $6,552, respectively, in interest expense for this loan. As of December 31, 2024, $556,452 was recorded as current liabilities. Liu Fu is the guarantor of this loan agreement.

As of December 31, 2024, the total liabilities of Datasea are $2,677,125, which shows a 25.64% decrease from June 30, 2024. The decrease of liability is due to the decrease of accounts payable by $761,274, increase due to related parties by $242,941, decreased accrued expense and other payables by $97,077 and decreased bank loan payable by $50,438, which was partly offset by increased unearned revenue by $86,275, and increased operating lease liabilities by $142,598.

Financial index analysis

As of December 31, 2024, and June 30, 2024, the Company’s inventory was US$319,932 and US$153,583, respectively, reflecting an increase of US$166,349, or a growth rate of 108.31%, compared to the same period as of the end of the previous fiscal year. The Company has achieved a certain production scale through continuous investment in acoustic intelligent products and independent research and development and leveraging existing advantages and capabilities to open new markets and generate additional revenue to meet customer needs..

Increasing inventory ensures that the Company has enough products or raw materials to meet customer orders, preventing stock shortage, and improving customer satisfaction. Moreover, maintaining higher inventory levels helps the Company address sudden demand spikes or price increases, reduces the risk of supply chain disruptions, and minimizes waiting times in the production process, thereby enhancing production efficiency. By increasing inventory purchases, the Company can also secure discounts and concessions for bulk orders, lowering procurement costs. Additionally, a larger inventory enables the Company to meet market demand promptly and capitalize on sales opportunities during promotions or peak seasons..

As of December 31, 2024, and June 30, 2024, the Company’s cash balance stood at $268,101 and $181,262, respectively, reflecting an increase of $86,839 or 47.91% compared to the end of the prior fiscal year. This increase is primarily attributable to successful financing during the quarter, which involved investments from major shareholders and capital market funds. This funding has enabled the Company to expand its scale, increase research and development, strengthen its intellectual property portfolio, and broaden market expansion, thereby enhancing the competitiveness of the Company’s brand and laying a solid foundation for its sustainable development. The rise in sales revenue, driven by higher demand for products and services, coupled with capital inflows from expanded financing channels, has allowed the Company to optimize its asset structure and bolster its financial strength and liquidity.

As of December 31, 2024, and June 30, 2024, the Company’s accounts receivable balance was $210,980 and $718,546, respectively, marking a decrease of $507,566 or 70.64% from the end of the prior fiscal year. This reduction indicates that the Company has improved its ability to convert claims from credit sales into cash more quickly, thereby enhancing the speed and availability of funds. The Company can now deploy funds more flexibly for production, operations, investment expansion, or debt repayment, reducing the risk of capital shortages. A reduction in accounts receivable contributes to a healthier balance sheet, improving financial indicators such as the current ratio and quick ratio, and strengthening solvency and credit ratings. Additionally, it lowers the Company’s reliance on external financing, thus reducing interest expenses and financing costs. The Company’s focus on strengthening credit management has allowed for faster turnover of external funds, supporting better capital flow.

For the six months ended December 31, 2024, and 2023, the Company’s revenue was $41,537,498 and $18,229,212, respectively, reflecting an increase of $23,308,286 or 127.86% from the same period last year. This growth in revenue was primarily driven by the rapid expansion of the 5G AI multimodal digital business. The Company has consistently sought out high-quality customers, maintained its market share, and continuously expanded its customer base.

Market Share Expansion: Through effective marketing strategies and high-quality products or services, the Company gains a competitive advantage and captures more market share, leading to an increase in operating income.

Sales Channel Expansion: By developing new sales channels, the Company can extend the reach of its products or services, thereby boosting sales revenue.

Customer Base Expansion: The Company has successfully attracted more new customers while maintaining the loyalty of existing ones, leading to a larger customer base and driving revenue growth.

Favorable Industry Trend: The industry is experiencing an upward trend, with a positive market environment providing favorable conditions for the Company’s operating income growth.

Improved Operational Efficiency: Operational improvements, such as optimizing production processes, reducing costs, and enhancing product quality and delivery speed, have bolstered the Company’s competitiveness and sales.

Improved Macroeconomic Environment: As the overall economic situation improves, consumer confidence rises, and business investment increases, demand for the Company’s products or services is likely to grow, further driving operating income growth.

For the three months ended December 31, 2024, and 2023, the Company’s gross profit was $614,433 and $176,970, respectively, an increase of $437,463, or 247.20% from the same period last year. This significant increase was primarily driven by the Company’s expanded market share and increased operating income. The growth in gross profit highlights the Company’s strong potential for further development and operational success.

Improved Shareholder Returns: A higher gross profit typically leads to an increase in net profit, which, in turn, boosts dividend distribution and stock value for shareholders. This enhances shareholder confidence in the Company and helps attract more investors.

Consolidation of Market Position: Higher gross profit strengthens the Company’s competitive position, allowing it to attract more customers through price advantages, product quality, or service differentiation, thereby expanding market share and solidifying its market position.

Innovation and R&D Investment: The increase in gross profit provides additional funds for innovation and R&D activities, enabling the Company to launch new products, improve existing offerings, and maintain its technological leadership and sustainable development.

As of December 31, 2024, and June 30, 2024, the Company’s accounts received in advance balance were $135,514 and $49,239, respectively, reflecting an increase of $86,275 or 175.22% from the prior fiscal year. The benefits of increased advances include:

Improved Cash Flow and Financial Stability: Advance payments enhance the Company’s cash flow, improving its financial stability.

Reduced Business Risks: With financial security from advance payments, the Company can mitigate potential losses and reduce business risks.

Demand Forecasting: Advance collections provide insights into market demand. By analyzing these payments, the Company can better understand customer needs and purchase intentions, allowing for more accurate production and sales planning and improving resource utilization efficiency.

Enhanced Market Competitiveness: The ability to collect advance payments indicates that the Company’s products or services are attractive and competitive in the market, improving its position and customer base.

Improved Customer Loyalty: Customers willing to pay in advance often demonstrate high trust and satisfaction, and offering advance payment options strengthens customer relationships, increasing loyalty and encouraging long-term cooperation.

Cost of Capital Advantage: Advance payments reduce the Company’s need for external financing, helping to lower financing costs.

As of December 31, 2024, and June 30, 2024, the capital reserve balance was $45,633,189 and $38,957,780, respectively, reflecting an increase of $6,675,409, or 17.13% from the beginning of the fiscal year. This growth was primarily due to increased stock offerings. The rise in capital reserves means the Company has obtained additional funds, enhanced its financial strength and provided more flexibility in operations.

Improved Financial Stability: The increase in capital reserves improves the Company’s capital adequacy ratio, bolstering its financial stability and ability to withstand risks.

Increased Shareholder Confidence: The capital increase, especially from major shareholders, signals their optimism about the Company’s future and growth potential. This investment supports the Company’s development and signals to the market that the Company is on a positive growth trajectory, boosting investor confidence.

Enhanced Company Strength: The additional capital enables the Company to expand production capacity, invest in R&D, improve market expansion, and enhance financial performance, thereby strengthening its competitiveness and profitability.

In the face of market volatility and uncertainty, enterprises can be more confident to cope with challenges. Additionally, an increase in capital reserves, the net asset value per share, providing a positive financial indicator for shareholders. This in turn bolsters investment confidence and positively impact the market value of enterprises.

As of December 31, 2024 and June 30, 2024, the Company’s net intangible assets were $4,081,544 and $546,001, respectively. This represents an increase of $3,535,543, or 647%. The growth in intangible assets bring several benefits to the Company:

1. Enhanced Competitiveness: Intangible assets provide the Company with unique competitive advantages in the market. These assets can support the development of distinctive products or services that set the Company apart from competitors, attracting more customers and increasing market share.

2. Creation of Economic Benefits: Intangible assets can generate direct economic benefits for the Company, contributing to its overall profitability.

3. Increased Enterprise Value: Intangible assets are a vital component of enterprise value. During mergers, acquisitions, and financing activities, the value of intangible assets plays a crucial role in determining the Company’s worth. A strong portfolio of intangible assets enhances the Company’s overall value and attracts potential investors and partners.

4. Promotion of Innovation and Development: Intangible assets resulting from research and development (R&D), such as new technologies and product designs, help foster innovation and technological progress within the Company. This not only enables the Company to meet evolving market demands but also sets the stage for long-term sustainable development.

5. Attraction and Retention of Talent: Companies with strong intangible assets, such as innovative capabilities and a solid reputation, are more likely to attract top talent. The development of intangible assets creates a dynamic environment for employees, improving job satisfaction, retaining skilled workers, and enhancing the overall quality of human resources within the Company.

In conclusion, increasing intangible assets is of paramount importance for the Company’s growth and success. It strengthens competitiveness, creates economic value, enhances overall enterprise value, and promotes sustainable development, all of which contributes to the long-term success of the business.

Going forward

Since its establishment, Datasea Inc. has rapidly grown into a leading player in the acoustic high-tech and 5G+AI multi-modal digital technology sectors, owing to its innovations. The Company has made significant strides in the acoustic technology field, while also driving the digital transformation of various industries through the integration of 5G+AI technologies. Looking ahead, the Company’s future outlook is promising, with a continued focus on technological advancements and market expansion. Below are key aspects of the Company’s strategic direction and growth potential:

I. Future Outlook of Acoustic High-tech Business

Technological Innovation and Global Application

Datasea will continue to focus on advancing acoustic + AI precision manufacturing, driving technological innovation in the acoustic high-tech sector, and expanding its global footprint. The Company is dedicated to strengthening its leadership in acoustic technology by integrating AI-driven solutions that are set to revolutionize industries worldwide. In pursuit of this goal, Datasea plans to build a global acoustic high-tech industry market chain through strategic collaborations with markets in the U.S. and other key regions around the world.

To further solidify its position as a global leader, Datasea intends to establish a comprehensive market chain in the acoustic high-tech industry by deepening partnerships and expanding its research and development capabilities. Tailoring solutions to meet the unique demands of global markets, the Company aims to broaden its reach and accelerate international growth.

The Company will also focus on strengthening the integration of international and domestic talent, fostering an efficient and collaborative global team. This approach will enhance both its R&D and production capabilities for acoustic precision manufacturing products.

This global expansion strategy will position Datasea to play a pivotal role in the continued evolution of acoustic and AI technologies, enabling the Company to deliver cutting-edge solutions across diverse industries while contributing to the advancement of global technological innovation.

Industry Application Expansion

Datasea will continue to broaden the application of acoustic technology across five key sectors: agriculture, industry, healthcare, IoT, and medical technology, driving the global popularization and upgrading of acoustic high-tech products.

The Company plans to pursue international merger and acquisition opportunities to integrate high-quality global resources, strengthen intellectual property portfolios, and further solidify its leadership position in the global acoustic industry.

New Product Development and manufacturing

Short-term Plan (Expected to launch in 2025): Applications of environmental acoustic technology and cardio-brain acoustic technology will include: Pet disinfection and deodorization purifier, mechanical wave-based cortisol regulation device for brain tissue.

Medium-term planning: The focus will be on the application of environmental acoustic technology and cardio-brain acoustic technology, including the development and production of products for food, water purification, as well as cardiovascular and cerebrovascular products

Long-term planning: Datasea will concentrate on the precision design and manufacturing of acoustic industrial products, acoustic agricultural products, acoustic medical products, and acoustic IoT products.

II. Future Outlook of 5G+AI Multi-modal Digital Business

Technological Innovation and Applications

Datasea will continue to leverage advanced AI processing technology to revolutionize the 5G multi-modal digital business, establishing itself as an industry leaderin technological innovation.

The Company plans to optimize resource allocation and scheduling through intelligent algorithms, providing real-time monitoring and solutions for potential issues in marketing applications, while, offering personalized and refined marketing services to businesses.

Industry Coverage and Digital Transformation

Datasea will continue delivering traffic rights and technical services to customers in various sectors including banking, insurance, gaming, news apps, logistics, agriculture, healthcare, and other industries, driving digital transformation across a wide array of industries.

The Company aims to provide digital and intelligent services to over 124 million individual businesses and 52 million enterprises, supporting their digital transformation.

Cross-industry Applications and Innovative Solutions

Utilizing cloud computing and 5G+AI multi-modal digital products, Datasea will support cross-industry applications, offering innovative solutions in areas such as rural revitalization, logistics, express delivery, and healthcare.

The Company’s goal is to assist clients in realizing business intelligence, boosting operational efficiency, reducing costs, and enhancing market competitiveness.

AI Intelligent Analysis and Big Data Applications

Datasea will continue to utilize intelligent analysis capabilities real-time optimization, predicting and addressing potential issues to improve enterprise operations and service responsiveness.

The Company plans to provide personalized customer experiences through AI intelligent analysis, helping businesses gain precise insights into consumer needs and implementing refined, cost-effective marketing strategies that foster customer loyalty.

III. Comprehensive Outlook

Technological Innovation and Global Expansion

Datasea will maintain its focus on technological innovation, driving the development of acoustic high-tech and 5G+AI multi-modal digital technologies to advance the intelligence and digitization of the global acoustic industry. The Company plans to build a global acoustic high-tech industry chain through international expansion, talent integration, and strategic mergers and acquisitions, solidifying its leadership in the global acoustic sector. Furthermore, Datasea will deepen collaboration with international markets, expanding the global application of acoustic high-tech while enhancing R&D and production capabilities.

Intellectual Property Protection and Brand Enhancement

Datasea will continue to safeguard its technological innovations globally through patent protection, enhancing its brand influence to maintain its leadership in the global acoustic intelligence market. This approach will not only reinforce the Company’s technological edge but also significantly elevate brand value, expanding its reach in global markets.

Cross-border Risk Control and Compliance Management

As international expansion deepens, Datasea will establish a robust global risk control system, employing intelligent risk control technologies and cross-border data compliance management to ensure stable operations and compliance during its global expansion. This will be a critical element in maintaining steady growth and addressing the challenges posed by global markets.

Through sustained technological innovation and market expansion, Datasea is poised for significant business growth and an increase in market share in the coming years, gradually positioning itself as a global leader in the acoustic high-tech and 5G+AI multi-modal digital technology sectors. With a comprehensive strategy encompassing patent protection, brand enhancement, and risk management, Datasea will solidify its market position and open new opportunities for the future, providing smarter solutions for global clients and generating higher commercial and social value.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective. This conclusion was reached in light of the following material weaknesses in internal control over financial reporting:

(i)

inadequate segregation of duties and effective risk assessment;

(ii)

lack of personnel adequately trained in U.S. GAAP; and

(iii)

insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both U.S. GAAP and SEC guidelines.

Management’s Strategies for Enhancing Internal Control:

In the previous fiscal year, we recognized the weaknesses in our internal control over financial reporting and have taken proactive steps to enhance and refine our internal control framework. These initiatives primarily include:

1. Strengthen the expansion of market channels

Use multiple marketing channels to attract customers, enhance brand awareness and increase sales. By optimizing and integrating multiple marketing channels, it can cover a wider range of target customer groups, improve efficiency and effectiveness, meet customer needs, reduce risks, achieve multi-channel comprehensive coverage, and achieve success in market competition.

2. Improve gross profit margin

The Company’s focus on 5G AI multi-mode traffic business is to integrate new resources, expand 5G-related new business, combined with the Company’s deep cultivation and accumulation in 5G news over the years, take this opportunity to develop more 5G-related business, use the private domain traffic of end customers, and convert it into end customers of acoustic high-tech products, so as to increase the revenue of the Company’s two major business modules.

3. Introduction of technical personnel

Define the talent needs and objectives, track and manage potential technical talents by creating a good working environment and establishing a talent pool, and strengthen cooperation with scientific research institutions and universities, simplify the process and procedures of talent introduction, and optimize the process of talent introduction. Make the best use of people’s talents.

4. The patent level has been rapidly improved

Encourage employees to study and research professional skills and professional knowledge, and reflect and summarize through practice and application, maintain a continuous learning mentality, and constantly improve themselves and surpass themselves.

5. Continuous Improvement of Internal Control Procedures: We remain committed to refining our internal control processes, encompassing various aspects such as the budget approval process, procurement and asset management, credit control, internal audits, and cost accounting. Additionally, we have compiled a comprehensive internal control policy, incorporating guidelines for procurement control, inventory management, and fraud prevention.

6. Collaborative Oversight Mechanism: To strengthen internal control implementation, we have established a collaborative mechanism between the internal control department and the legal department. This mechanism involves conducting interviews with department heads, promptly addressing identified risk areas, and ensuring corrective actions are taken.

7. Engagement with Financing Underwriters: We have engaged financing underwriters to work closely with our international department to facilitate the Company’s financing efforts. This partnership aims to improve our understanding of investor backgrounds and identify financing methods that align best with our objectives.

8. Enhanced Collaboration with Legal Professionals: We are reinforcing collaboration between our internal and external legal teams to proactively mitigate risks.

As part of our ongoing efforts to enhance corporate governance and financial oversight, we have implemented and strengthened the following internal controls and procedures to improve operational efficiency, risk management, and regulatory compliance:

Enhanced Cost Control and Economic Efficiency

The Company continues to implement cost control measures aimed at improving financial efficiency. Through proactive engagement and negotiations, the Company has secured investment incentives from the Daxing District Government in Beijing and is in the process of completing relocation procedures. This strategic move is expected to provide the Company with access to preferential tax policies and government subsidies, resulting in improved cash flow and long-term financial benefits.

Structured New Project Management and Risk Mitigation

A standardized process has been established for new project evaluation and management, incorporating feasibility studies, project discussions, legal and risk assessments, and sign-off procedures by responsible parties. This structured approach ensures comprehensive risk prevention and revenue oversight, improving financial discipline across newly launched initiatives (e.g., the beauty industry mini-program project).

Optimization of the Proprietary 5G AI Multi-Modal Recharge Platform

The Company continues to refine its internally developed 5G AI multi-modal traffic recharge platform to enhance operational efficiency. By optimizing business processing workflows and reconciliation procedures, the Company ensures the accuracy and timeliness of monthly settlements with both suppliers and customers, reinforcing financial controls and transaction integrity.

Regulatory Compliance with U.S. Banking Oversight on Fund Transfers

The Company is actively working in close coordination with its U.S. banking partners to comply with regulatory requirements governing fund transfers. This includes ensuring timely, transparent, and compliant utilization of overseas funds, strengthening financial governance in accordance with U.S. banking regulations and reporting standards.

Tax Compliance and Invoice Management

The Company is continuously refining its tax compliance framework and invoice management by closely collaborating with business personnel and external partners to analyze business models and client distribution. A key focus has been to enhance tax compliance, optimize invoice issuance practices, and mitigate tax-related risks, ensuring alignment with applicable tax laws and regulatory requirements.

Further Enhancements Include:

Personnel Training: We are committed to training our staff to ensure the proper execution of internal control policies and procedures.

Regular Reporting to the Audit Committee: We will continue to provide quarterly summaries of internal control and audit reports to the Audit Committee.

Quarterly Review with U.S. CPA: Each quarter, we will conduct a trial balance review in collaboration with a U.S. Certified Public Accountant (CPA) after their review or audit.

Changes in Internal Control over Financial Reporting

Other than as described above, there have been no material changes in the Company’s internal control over financial reporting during the most recent fiscal period that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls. The Company remains committed to continuously enhancing its internal control framework to ensure operational efficiency, regulatory compliance, and financial transparency.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings and no such proceedings are known to be contemplated.

ITEM 1A. RISK FACTORS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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