424B5 1 ea185067-424b5_dataseainc.htm PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(5)Registration No. 333-272889 PROSPECTUS SUPPLEMENT(To the Prospectus Dated July 21, 2023) Datasea Inc. 5,000,000 SHARES OF COMMON STOCK Pursuant to this prospectus supplement and the accompanying prospectus, we are offering 5,000,000 shares of our common stock, par value $0.001 per share. Each share of common stock is being sold at a price of $0.40. Unless the context requires otherwise, references to the “Company,” “we,” “our,” and “us,” refer to Datasea Inc. and its subsidiaries, and references to “Datasea” refers to Datasea Inc., our Nevada holding company. Datasea’s common stock is listed on the Nasdaq Capital Market and traded under the symbol “DTSS.” On September 11, 2023, the closing price of Datasea’s common stock was $0.6426 per share. The total aggregate market value of all of Datasea’s outstanding common stock is approximately $31,673,912, and the aggregate market value of Datasea’s outstanding common stock held by non-affiliates is approximately $12,838,701, based on 27,784,133 total shares of outstanding common stock as of September 11, 2023, of which 11,262,018 shares are held by non-affiliates, 16,522,115 shares are held by affiliates, and a per share price of $1.14 which is the closing price on August 7, 2023. Pursuant to General Instruction I.B.6 of Form S-3, in no event will Datasea sell securities registered on the registration statement of which this prospectus is a part with a value of more than one-third of the aggregate market value of Datasea’s common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of Datasea’s common stock held by non-affiliates is less than $75,000,000. Datasea has not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus supplement. Datasea is not a Chinese operating company but a Nevada holding company with operations conducted by our subsidiaries based in China. We currently conduct our business substantially through our variable interest entity, or VIE, Shuhai Information Technology Co., Ltd. (“Shuhai Beijing”), and the VIE’s subsidiaries incorporated in China. This structure involves unique risks to investors. The contractual arrangements through which we control our VIE have also not been tested in the courts of the People’s Republic of China (“PRC” or China) and there is substantial uncertainty as to whether they are legally enforceable in the PRC. Such VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies, and investors may never hold direct equity interests in our Chinese operating subsidiaries. There is a possibility that Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, and this could cause the value of such securities to significantly decline or become worthless. See “Prospectus Supplement Summary—Cautionary Statement Regarding our Variable Interest Entity Structure” in this prospectus supplement and “Risk Factors—Risks Relating to Our Corporate Structure” in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022. Our business operations are primarily based in China, and our VIE and its subsidiaries are subject to certain legal and operational risks associated with being based in China. On December 28, 2021, the Cyberspace Administration of China (“CAC”), and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, which came into effect on February 15, 2022. The final Cybersecurity Review Measures provide that a “network platform operator” that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review. Further, the relevant PRC governmental authorities may initiate a cybersecurity review against any company if they determine certain network products, services, or data processing activities of such company affect or may affect national security. As of the date of this prospectus supplement, our Company, our VIE and its subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice or sanction.