Datasea (DTSS) 10-Q 14 Feb 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 14, 2019
Document And Entity Information
Entity Registrant Name	DATASEA INC.
Entity Central Index Key	1,631,282
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Trading Symbol	DTSS
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		20,943,846
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,019

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Current Assets
Cash	$ 5,273,508	$ 1,031,486
Inventory	73,193	75,910
Prepaid expenses and other current assets	122,363	127,880
Total Current Assets	5,469,064	1,235,276
Property and equipment, net	51,620	55,270
Intangible assets, net	26,302	13,887
Deferred registration costs		72,532
Escrow	1,000,000
Total Assets	6,546,986	1,376,965
Current Liabilities
Accounts payable	13,070	13,503
Accrued expenses and other payables	73,747	150,283
Loan payable-shareholder	8,726	27,058
Total Current Liabilities	95,543	190,844
Stockholders' Equity
Common stock, $0.001 par value, 375,000,000 shares authorized, 20,943,846 and 19,170,846 shares issued and outstanding at December 31 and June 30, 2018, respectively	20,945	19,171
Additional paid-in capital	11,104,464	5,121,102
Accumulated comprehensive income	194,918	170,795
Deficit	(4,868,884)	(4,124,947)
Total Stockholders' Equity	6,451,443	1,186,121
Total Liabilities and Stockholders' Equity	$ 6,546,986	$ 1,376,965

CONSOLIDATED BALANCE SHEETS (_2

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Dec. 31, 2018	Jun. 30, 2018	May 01, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	375,000,000	375,000,000
Common stock, issued	20,943,846	19,170,846
Common stock, outstanding	20,943,846	19,170,846	19,170,827

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenues				$ 9,034
Cost of goods sold				21
Gross (deficit)profit				9,013
Operating expenses:
Selling expenses	71,973	31,282	148,852	65,661
General and administrative expenses	275,582	290,676	502,153	603,228
R&D expenses	41,114	77,002	103,885	171,562
Total operating expenses:	388,669	398,960	754,890	840,451
Loss from operations	(388,669)	(398,960)	(754,890)	(831,438)
Other income :
Other (expense) income, net	460	7,459	(3,465)	31,440
Interest income	8,497		14,418
Total other income(expense)	8,957	7,459	10,953	31,440
Net loss	(379,712)	(391,501)	(743,937)	(799,998)
Other comprehensive loss
Foreign currency translation adjustment	(7,450)	90,595	24,123	255,158
Total comprehensive loss	$ (387,162)	$ (300,906)	$ (719,814)	$ (544,840)
Net loss per share
Basic and diluted (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.04)	$ (0.04)
Weighted average shares outstanding
Basic and dulited (in shares)	19,445,150	19,170,590	19,308,455	19,089,796

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (743,937)	$ (799,998)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	19,319	14,472
Changes in current assets and current liabilities:
Accounts receivable		226
Inventory	278
Prepaid expenses and other current assets	1,409	(79,086)
Accrued expenses and other payables	(71,915)	8,262
Net cash used in operating activities	(794,846)	(856,123)
Cash flows from investing activities:
Acquisition of office equipment and intangible assets	(30,337)	(13,301)
Net cash used in investing activities	(30,337)	(13,301)
Cash flows from financing activities:
Payment of loan payable - shareholder, net	(17,508)	(25,606)
Net proceeds from sale of common stock	4,748,422
Deferred financing costs		(72,682)
Net proceeds from issuance of common stock	307,724	1,429,534
Net cash provided by financing activities	5,038,638	1,331,246
Effect of exchange rate changes on cash	28,567	262,951
Net increase in cash	4,242,022	724,773
Cash - beginning of period	1,031,486	1,174,950
Cash - end of period	5,273,508	1,899,723
Supplemental disclosures of cash flow information:
Cash paid for interest
Cash paid for income tax
Supplement non-cash financing activities:
Net proceeds from offering placed in Escrow	$ 1,000,000

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Deficit [Member]	Accumulated Other Comprehensive (Loss)Income [Member]	Total
Beginning Balance at Jun. 30, 2017	$ 18,870	$ 3,002,878	$ (2,520,806)	$ 57,692	$ 558,634
Beginning Balance (in shares) at Jun. 30, 2017	18,870,346
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Sale of common stock	$ 301	2,118,224			2,118,525
Sale of common stock (in shares)	300,500
Net loss			(1,604,141)		(1,604,141)
Foreign currency translation gain				113,103	113,103
Ending Balance at Jun. 30, 2018	$ 19,171	5,121,102	(4,124,947)	170,795	$ 1,186,121
Ending Balance (in shares) at Jun. 30, 2018	19,170,846				19,170,846
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Sale of common stock	$ 106	307,340			$ 307,446
Sale of common stock (in shares)	105,500
Sale of common stock-offering	$ 1,668	5,676,022			5,677,690
Sale of common stock-offering (in shares)	1,667,500
Net loss			(743,937)		(743,937)
Foreign currency translation gain				24,123	24,123
Ending Balance at Dec. 31, 2018	$ 20,945	$ 11,104,464	$ (4,868,884)	$ 194,918	$ 6,451,443
Ending Balance (in shares) at Dec. 31, 2018	20,943,846				20,943,846

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Datasea Inc. (the “Company”, or “we”, “us”, “our” or similar terminology) 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 by amending its articles of incorporation. On May 26, 2015, the Company’s founder, Xingzhong Sun, sold 6,666,667 shares of common stock of the Company (the “Common Stock”) to Zhixin Liu, one of the owners 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. 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 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 together own 100% of the ownership rights in Shuhai Skill (HK), transferred all of the issued and outstanding ordinary shares of Shuhai Skill (HK) to the Company in exchange for the issuance of an aggregate of 6,666,667 shares of Common Stock, thereby causing Shuhai Skill (HK) and its wholly owned subsidiaries, Tianjin Information Sea Information Technology Co., Ltd. (“Tianjin Information”), a limited liability company incorporated under the laws of the PRC, and Harbin Information Sea Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC, to become wholly-owned subsidiaries of the Company, and Shuhai Information Technology Co., Ltd., also a limited liability company incorporated under the laws of the PRC (“Shuhai Beijing”), to become a variable interest entity (“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, being Zhixin Liu and her father, Fu Liu, owned approximately 82% of the 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 is engaged in the business of providing Internet security products, new media advertising, micro-marketing, and data analysis services in the PRC.

GOING CONCERN

GOING CONCERN	6 Months Ended
	Dec. 31, 2018
Going Concern
GOING CONCERN	NOTE 2 – GOING CONCERN The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying unaudited condensed consolidated financial statements, the Company has generated revenues of $0 during three and six months ended December 31, 2018, has a deficit of approximately $4,984,000 at December 31, 2018, and continues to incur significant losses since inception. Management believes that these circumstances, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s management recognizes that the Company must generate sales and additional resources to enable it to continue to develop its operations. Based on increased demand for internet services in China, including internet security and big data integration, the Company’s management team expects healthy growth in its business. On December 21, 2018, the company completed a common stock offering with net proceeds $5.7 million after deducing placement agent’ commission and other offering costs, which helps the Company’s cash flow in year 2019. The Company expects to generate its revenue through expansion the business, product innovation and development. If the revenue does not reach the level anticipated in the Company’s plan, in order to maintain working capital sufficient to support the Company’s operation and finance the future growth of it business, the Company expects to fund any cash flow shortfall through financial support commitment from the Company’s major stockholder and public or private issuance of securities. Additional cash resources may not be available to the Company on desirable terms, or at all, if and when needed by the Company

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its 100% owned subsidiaries of Shuhai Skill (HK), Tianjin Information and its VIE, Shuhai Beijing. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments and elimination of intercompany transactions upon consolidation) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended June 30, 2018. The results for the three and six months ended December 31, 2018 are not necessarily indicative of the results to be expected for the full year ending June 30, 2019. VARIABLE INTEREST ENTITY Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 810, “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements, 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 normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the 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, the Company is deemed the primary beneficiary of Shuhai Beijing. Accordingly, the results of Shuhai Beijing have been included in the accompanying unaudited condensed consolidated financial statements. 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 Shareholders’ Voting Rights Entrustment Agreement Equity Option Agreement Equity Pledge Agreement USE OF ESTIMATES The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 our unaudited condensed consolidated financial statements. Contingencies Certain conditions may exist as of the date the unaudited condensed consolidated financial statements 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 unaudited condensed consolidated financial statements. 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, 2018, and June 30, 2018, the Company has no contingencies. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less. The Company has no cash equivalents as of December 31, 2018 and June 30, 2018. Inventory Inventory, comprised principally of products purchased that are comprised of routers used in installations, 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 no allowances for inventory as of December 31, 2018 and June 30, 2018 . Deferred REGISTRATION Costs The Company has capitalized certain legal, accounting and other third-party fees that are directly associated with a registered equity financing as deferred registration cost until such financing is consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the offering. The Company incurred and deferred registration costs of $72,532 as of June 30, 2018 that was reclassified at December 31, 2018 to additional paid-in capital after the Company successfully completed the registered common stock offering on December 21, 2018. ESCROW It represents cash held in an indemnification escrow account related to requirements of financing agreement signed with the underwriter for a period of 18 months or longer subsequent to the common stock offering. 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 5-10 years Office equipment 3-5 years Vehicle 5 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 our intangible assets are subject to amortization. No impairment of intangible assets has been identified as of the balance sheet dates. Intangible assets include licenses and certificates and are amortized over their useful life of five to ten years. FAIR VALUE MEASUREMENTS AND DISCLOSURES FASB ASC Topic 820, “Fair Value Measurements,” defines fair value, and establishes a three-level valuation hierarchy for disclosures that enhances disclosure requirements for fair value 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 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 fair value measurement. The carrying value of cash, inventory, prepaid expenses and other current assets, accounts payable, accrued expenses and other payables, and loan payable-shareholder, approximate their fair values due to their short maturities. As of December 31, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value 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, plant 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 industrial 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 to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. During the reporting periods there was no impairment loss recognized on long-lived assets. INCOME TAXES The Company uses the asset and liability method of accounting for income taxes in accordance with 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 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. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. RESEARCH AND DEVELOPMENT EXPENSES Research and development expenses are expensed in the period when they are incurred. For the three months ended December 31, 2018 and 2017, the Company incurred research and development expenses of $41,114 and $77,002, respectively. For the six months ended December 31, 2018 and 2017, the Company incurred research and development expenses of $103,885 and $171,562, 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 is covered by insurance. Should any of these institutions 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. 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 dollars (“USD”) The accounts of the Chinese entities were translated into USD in accordance with 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 in accordance with 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 USD to RMB for the purposes of preparing the consolidated financial statements were as follows December 31, 2018 2017 Period end USD:RMB exchange rate 6.8764 6.5064 Average USD:RMB exchange rate 6.8587 6.6416 RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02 Amendments to the ASC 842 Leases. This update requires a lessee to recognize the assets and liability (the lease liability) arising from operating leases on the balance sheet for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Within a twelve-month or less lease term, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. If a lessee makes this election, it should recognize lease expense on a straight-line basis over the lease term. In transition, this update will be effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not currently expect the adoption of ASU 2016-02 to have a material impact on the Company’s financial statements unless it enters into a new long-term lease. In September 2017, the FASB issued ASU 2017-13, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842). The main objective of this pronouncement is to clarify the effective date of the adoption of ASC Topic 606 and ASC Topic 842 and the definition of public business entity as stipulated in ASU 2014-09 and ASU 2016-02. ASU 2014-09 provides that a public business entity and certain other specified entities adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. ASU 2016-12 requires that “a public business entity and certain other specified entities adopt ASC Topic 842 for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. All other entities are required to adopt ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020”. ASU 2017-13 clarifies that the SEC would not object to certain public business entities electing to use the non-public business entities effective dates for applying ASC 606 and ASC 842. ASU 2017-13, however, limits such election to certain public business entities that “otherwise would not meet the definition of a public business entity except for a requirement to include or inclusion of its financial statements or financial information in another entity’s filings with the SEC”. In November 2016, the FASB issued ASU 2016-18, Restricted Cash. The amendments in this update address diversity in practice that exists in the classification and presentation of changes in restricted cash and require that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for the Company beginning July1, 2019and is required to be applied using a retrospective transition method to each period presented. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company for its fiscal year beginning July 1, 2019. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which defines the term “in-substance nonfinancial asset” and clarifies the scope and accounting of a financial asset that meets the definition. ASU 2017-05 also provides guidance for partial sales of nonfinancial assets. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	6 Months Ended
	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Note 4 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: December 31, 2018 June 30, 2018 Office furniture and fixtures $ 54,565 $ 71,027 Vehicle 2,909 3,005 Office equipment 80,254 52,036 Subtotal 137,728 126,068 Less: Accumulated depreciation 86,108 70,798 Total $ 51,620 $ 55,270 Depreciation expense for the three months ended December 31, 2018 and 2017 was $6,186 and $6,969 respectively. Depreciation expense for the six months ended December 31, 2018 and 2017 was $17,631 and $13,638 respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 5 –intangible assets Intangible assets are summarized as follows: December 31, 2018 June 30, 2018 Software registration right $ 5,215 $ 4,929 Patent 15,265 1,203 Value-added telecommunications business license 11,661 12,049 Subtotal 32,141 18,181 Less: Accumulated depreciation 5,839 4,294 Total $ 26,302 $ 13,887 Amortization expense for the three months ended December 31, 2018 and 2017 were $806 and $419, respectively. Amortization expense for the six months ended December 31, 2018 and 2017 were $1,618 and $834, respectively

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	6 Months Ended
	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
PREPAID EXPENSES AND OTHER CURRENT ASSETS	Note 6 – Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following: December 31, 2018 June 30, 2018 Security deposit $ 46,140 $ 55,156 Prepaid expenses and advances 62,848 65,769 Others 13,375 6,955 Total $ 122,363 $ 127,880

ACCRUED EXPENSES AND OTHER PAYA

ACCRUED EXPENSES AND OTHER PAYABLES	6 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
ACCRUED EXPENSES AND OTHER PAYABLES	Accrued expenses and other payable consisted of the following: December 31, 2018 June 30, 2018 Deposit $ 30,482 $ 31,493 Salary payable and other payable 14,168 115,785 Advances from customers 2,908 3,005 Total $ 47,558 $ 150,283

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Dec. 31, 2018
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	Note 8 – related party transactions The Company’s President, Zhixin Liu, paid certain operating expenses on behalf of the Company. As of December 31, 2018 and June 30, 2018, the amounts due to the President were $8,726 and $27,058, respectively. These amounts are interest-free, unsecured and due on demand. The Company has not received any demand for payment. On January 1, 2016, the Company’s President entered into a car rental agreement with the Company. Pursuant to the agreement, the Company rents a car from the Company’s President for a monthly rent of approximately $750. The agreement expired on December 31, 2016. The agreement was renewed and the term was extended to December 31, 2018. The rent paid under this agreement was $2,187 and $2,258 for the three months ended December 31, 2018 and 2017, respectively. The rent paid under this agreement was $4,374 and $4,516 for the six months ended December 31, 2018 and 2017, respectively. On November 11, 2017, the Company bought a used car for $2,916 from Harbin Jinfenglvyuan Biotechnology Co., Ltd, a related entity owned by Mr. Fu Liu, a director of the Company. In April 2017, the Company’s President entered into an apartment rental agreement with the Company. Pursuant to the agreement, the Company rents an apartment from the Company’s president with an annual rent of approximately $2,916. The agreement was renewed and the term was extended to April 30, 2019. In March and April 2018, the Company entered into six membership service agreements with five entities and one individual, three of which are stockholders of the Company, and eleven agency agreements with eleven individuals, nine of which are stockholders of the Company. Pursuant to the membership service agreements, the Company offers member management services through the Company’s Xin Platform APP and charges the entering parties a service fee of RMB1,000 (approximately $150) per member. Pursuant to the agency agreements, the agents are authorized as agents to market Xin Platform APP in specific areas of China. Each agent is required to pay a Xin Platform APP usage fee of $750 and deposit $750 in financial products offered by China Minsheng Bank via Xin Platform APP. Each agent will receive $8 for each customer that applies for a credit card of China Minsheng Bank via Xin Platform APP.

COMMON STOCK

COMMON STOCK	6 Months Ended
	Dec. 31, 2018
Equity [Abstract]
COMMON STOCK	Note 9 – COMMON STOCK On May 1, 2018, the Company affected the 1 for 3 reverse stock split of the Company’s issued and outstanding common stock, decreasing the number of outstanding shares from 57,511,771 to 19,170,846 These financial statements have been retroactively adjusted to reflect this reverse split. On August 22, 2018, the Company’s Board of Directors and majority stockholders adopted the 2018 Equity Incentive Plan, or the “2018 Plan”, for the Company to award up to a maximum of 4,000,000 shares of its common stock, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of its business. No awards have been granted under the 2018 Plan as of the date of this report, but the Company’s Board of Directors or a designated committee thereof will have the ability in its discretion from time to time to make awards under the 2018 Plan, including to its officers and directors of the Company. During September, 2018, the Company sold 84,000 shares of common stock to third party investors at RMB 20 (approximately $2.94) per share and received proceeds of RMB 1,680,000 (approximately $244,000). During November, 2018, the Company sold 21,500 shares of common stock to third party investors at $2.92 per share and received proceeds of $62,780. On December 21, 2018, the Company successfully completed a registered offering and concurrent listing of the Company’s common stock on the NASDAQ Capital Market, which offering generated gross proceeds of $6.7 million before deducting underwriter’s commission and other offering costs, resulting in net proceeds of approximately $5.7 million, of which $1,000,000 was placed in an escrow account. $600,000 of the escrow fund shall be held and disbursed by the escrow agent pursuant to the terms and conditions of a certain Indemnification Escrow Agreement between the Company and the underwriter of the offering. $400,000 of the escrow fund shall be disbursed within five business days upon the underwriter has confirmed receipt of a written legal opinion from PRC legal counsel in connection with such offering (such funds were disbursed to the Company as described in Note 12). The Company sold 1,667,500 shares of common stock (including shares issued pursuant to the underwriter’s over-allotment option) at an offering price of $4 per share. In connection with the offering, the Company’s common stock began trading on the NASDAQ Capital Market beginning on December 19, 2018 under the symbol “DTSS”. In addition, the Company has agreed to issue warrants to the representative of the underwriters to purchase a number of shares of common stock equal to 7% of the total number of shares of common stock sold in this offering at an exercise price equal to 150% of the offering price of the common stock sold in this offering. These warrants may be purchased in cash or via cashless exercise, will be exercisable for five years from the effective date of the Registration Statement for the offering and will terminate on the fifth anniversary of such effective date.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	Note 10 – income taxes The Company was incorporated in the United States of America, is subject to U.S. tax and plans to file U.S. federal income tax returns. The Company conducts all of its businesses through its subsidiaries and affiliated entities, principally in the PRC. No provision for US federal income tax was made for the six months ended December 31, 2018 and 2017as the US entity incurred losses. The Company’s offshore subsidiary, Shuhai Skill (HK), did not earn any income that was derived in Hong Kong for the six months ended December 31, 2018 and 2017, and therefore did not incur any Hong Kong Profits tax. Under the Corporate Income Tax Law of the PRC, the corporate income tax rate is 25%. The Company has net operating losses(“NOL”) amounting to $460,371 and $391,501 during three months ended December 31, 2018 and 2017, respectively, $832,030 and $799,998 during six months ended December 31, 2018 and 2017 respectively. Management believes that it is more likely than not that the benefit from the NOL carryforwards will not be realized. In recognition of this risk, the Company has provided a 100% valuation as of December 31, 2018 and 2017 and no deferred tax asset benefit has been recorded. The provisions for income taxes is summarized as follows: Six months ended December 31, 2018 Six months ended December 31, 2017 Current $ — $ — Deferred 208,007 200,000 Increase in valuation allowance (208,007 ) (200,000 ) Total $ — $ — Three months ended Three months ended Current $ — $ — Deferred 115,093 97,875 Increase in valuation allowance (115,093 ) (97,875 ) Total $ — $ — The Company’s net deferred tax asset as of December 31, 2018 and June 30, 2018 is as follows: December 31, 2018 June 30, 2018 Deferred tax asset $ 1,194,102 $ 986,095 Valuation allowance (1,194,102 ) (986,095 ) Net deferred tax asset $ — $ —

COMMIMENTS

COMMIMENTS	6 Months Ended
	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMIMENTS	NOTE 11 – Commiments Lease Agreement In December 2017, the Company renewed the one-year operating lease agreement. The lease will expire on February 28, 2019 and has a monthly rent of RMB 35,192 (or approximately $5,000. Future rental payment due under the lease is RMB 70,384(or approximately $10,000. Rent expense for the three months ended December 31, 2018 and 2017 was $15,519 and $15,897 respectively. Rent expense for the six months ended December 31, 2018 and 2017 was $30,786 and $31,794, respectively. In December 2017, the Company renewed the one-year property management contract. The contract will expire on February 28, 2019 and has a monthly management fee of RMB 70,384 (or approximately $10,000). Future management fee due under the contract is RMB140,768 (or approximately $21,000).

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Dec. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS The Company has reviewed its subsequent events through February 14, 2019, the date these financial statements were issued and has determined that, except as described below, no material subsequent events have occurred that require recognition in or disclosure to the financial statements. On February 11, 2019, $400,000 of the Company’s funds deposited in escrow as described in Note 9 above were released to the Company from escrow as a result of the issuance to the underwriter of the Company’s registered offering of a legal opinion covering certain aspects of PRC law with respect to the Company.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND CONSOLIDATION	Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its 100% owned subsidiaries of Shuhai Skill (HK), Tianjin Information and its VIE, Shuhai Beijing. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments and elimination of intercompany transactions upon consolidation) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended June 30, 2018. The results for the three and six months ended December 31, 2018 are not necessarily indicative of the results to be expected for the full year ending June 30, 2019.
VARIABLE INTEREST ENTITY	VARIABLE INTEREST ENTITY Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 810, “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements, 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 normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the 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, the Company is deemed the primary beneficiary of Shuhai Beijing. Accordingly, the results of Shuhai Beijing have been included in the accompanying unaudited condensed consolidated financial statements. 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 Shareholders’ Voting Rights Entrustment Agreement Equity Option Agreement Equity Pledge Agreement
USE OF ESTIMATES	USE OF ESTIMATES The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 our unaudited condensed consolidated financial statements.
CONTINGENCIES	Contingencies Certain conditions may exist as of the date the unaudited condensed consolidated financial statements 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 unaudited condensed consolidated financial statements. 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, 2018, and June 30, 2018, the Company has no contingencies.
CASH AND CASH EQUIVALENTS	Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less. The Company has no cash equivalents as of December 31, 2018 and June 30, 2018.
INVENTORY	Inventory Inventory, comprised principally of products purchased that are comprised of routers used in installations, 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 no allowances for inventory as of December 31, 2018 and June 30, 2018.
DEFERRED REGISTRATION COSTS	Deferred REGISTRATION Costs The Company has capitalized certain legal, accounting and other third-party fees that are directly associated with a registered equity financing as deferred registration cost until such financing is consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the offering. The Company incurred and deferred registration costs of $72,532 as of June 30, 2018 that was reclassified at December 31, 2018 to additional paid-in capital after the Company successfully completed the registered common stock offering on December 21, 2018.
ESCROW	ESCROW It represents cash held in an indemnification escrow account related to requirements of financing agreement signed with the underwriter for a period of 18 months or longer subsequent to the common stock offering.
PROPERTY AND EQUIPMENT	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 5-10 years Office equipment 3-5 years Vehicle 5 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 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 our intangible assets are subject to amortization. No impairment of intangible assets has been identified as of the balance sheet dates. Intangible assets include licenses and certificates and are amortized over their useful life of five to ten years.
FAIR VALUE MEASUREMENTS AND DISCLOSURES	FAIR VALUE MEASUREMENTS AND DISCLOSURES FASB ASC Topic 820, “Fair Value Measurements,” defines fair value, and establishes a three-level valuation hierarchy for disclosures that enhances disclosure requirements for fair value 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 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 fair value measurement. The carrying value of cash, inventory, prepaid expenses and other current assets, accounts payable, accrued expenses and other payables, and loan payable-shareholder, approximate their fair values due to their short maturities. As of December 31, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value on a recurring basis.
IMPAIRMENT OF LONG-LIVED ASSETS	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, plant 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 industrial 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 to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. During the reporting periods there was no impairment loss recognized on long-lived assets.
INCOME TAXES	INCOME TAXES The Company uses the asset and liability method of accounting for income taxes in accordance with 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 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. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.
RESEARCH AND DEVELOPMENT EXPENSES	RESEARCH AND DEVELOPMENT EXPENSES Research and development expenses are expensed in the period when they are incurred. For the three months ended December 31, 2018 and 2017, the Company incurred research and development expenses of $41,114 and $77,002, respectively. For the six months ended December 31, 2018 and 2017, the Company incurred research and development expenses of $103,885 and $171,562, respectively.
CONCENTRATION OF CREDIT RISK	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 is covered by insurance. Should any of these institutions 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.
FOREIGN CURRENCY TRANSLATION AND COMPREHENSIVE INCOME (LOSS)	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 dollars(“USD”) The accounts of the Chinese entities were translated into USD in accordance with 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 in accordance with 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 USD to RMB for the purposes of preparing the consolidated financial statements were as follows December 31, 2018 2017 Period end USD:RMB exchange rate 6.8764 6.5064 Average USD:RMB exchange rate 6.8587 6.6416
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02 Amendments to the ASC 842 Leases. This update requires a lessee to recognize the assets and liability (the lease liability) arising from operating leases on the balance sheet for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Within a twelve-month or less lease term, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. If a lessee makes this election, it should recognize lease expense on a straight-line basis over the lease term. In transition, this update will be effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not currently expect the adoption of ASU 2016-02 to have a material impact on the Company’s financial statements unless it enters into a new long-term lease. In September 2017, the FASB issued ASU 2017-13, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842). The main objective of this pronouncement is to clarify the effective date of the adoption of ASC Topic 606 and ASC Topic 842 and the definition of public business entity as stipulated in ASU 2014-09 and ASU 2016-02. ASU 2014-09 provides that a public business entity and certain other specified entities adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. ASU 2016-12 requires that “a public business entity and certain other specified entities adopt ASC Topic 842 for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. All other entities are required to adopt ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020”. ASU 2017-13 clarifies that the SEC would not object to certain public business entities electing to use the non-public business entities effective dates for applying ASC 606 and ASC 842. ASU 2017-13, however, limits such election to certain public business entities that “otherwise would not meet the definition of a public business entity except for a requirement to include or inclusion of its financial statements or financial information in another entity’s filings with the SEC”. In November 2016, the FASB issued ASU 2016-18, Restricted Cash. The amendments in this update address diversity in practice that exists in the classification and presentation of changes in restricted cash and require that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for the Company beginning July1, 2019and is required to be applied using a retrospective transition method to each period presented. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company for its fiscal year beginning July 1, 2019. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which defines the term “in-substance nonfinancial asset” and clarifies the scope and accounting of a financial asset that meets the definition. ASU 2017-05 also provides guidance for partial sales of nonfinancial assets. The Company does not expect the adoption of the amendment in this ASU to have a significant impact on the Company’s condensed consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Schedule of depreciation of property and equipment	Depreciation of property and equipment is provided using the straight-line method over estimated useful lives as follows: Furniture and fixtures 5-10 years Office equipment 3-5 years Vehicle 5 years
Schedule of exchange rates used to translate amounts	The exchange rates used to translate amounts in USD to RMB for the purposes of preparing the consolidated financial statements were as follows December 31, 2018 2017 Period end USD:RMB exchange rate 6.8764 6.5064 Average USD:RMB exchange rate 6.8587 6.6416

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	Property and equipment are summarized as follows: December 31, 2018 June 30, 2018 Office furniture and fixtures $ 54,565 $ 71,027 Vehicle 2,909 3,005 Office equipment 80,254 52,036 Subtotal 137,728 126,068 Less: Accumulated depreciation 86,108 70,798 Total $ 51,620 $ 55,270

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	Intangible assets are summarized as follows: December 31, 2018 June 30, 2018 Software registration right $ 5,215 $ 4,929 Patent 15,265 1,203 Value-added telecommunications business license 11,661 12,049 Subtotal 32,141 18,181 Less: Accumulated depreciation 5,839 4,294 Total $ 26,302 $ 13,887

PREPAID EXPENSES AND OTHER CU_2

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)	6 Months Ended
	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of prepaid asset and other current asset	Prepaid expenses and other current assets consisted of the following: December 31, 2018 June 30, 2018 Security deposit $ 46,140 $ 55,156 Prepaid expenses and advances 62,848 65,769 Others 13,375 6,955 Total $ 122,363 $ 127,880

ACCRUED EXPENSES AND OTHER PA_2

ACCRUED EXPENSES AND OTHER PAYABLES (Tables)	6 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued liabilities	Accrued expenses and other payable consisted of the following: December 31, 2018 June 30, 2018 Deposit $ 30,482 $ 31,493 Salary payable and other payable 14,168 115,785 Advances from customers 2,908 3,005 Total $ 47,558 $ 150,283

INCOME TAXES (Tables)

INCOME TAXES (Tables)	6 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Schedule of provisions for income taxes	The provisions for income taxes is summarized as follows: Six months ended December 31, 2018 Six months ended December 31, 2017 Current $ — $ — Deferred 208,007 200,000 Increase in valuation allowance (208,007 ) (200,000 ) Total $ — $ — Three months ended Three months ended Current $ — $ — Deferred 115,093 97,875 Increase in valuation allowance (115,093 ) (97,875 ) Total $ — $ —
Schedule of net deferred tax asset	The Company’s net deferred tax asset as of December 31, 2018 and June 30, 2018 is as follows: December 31, 2018 June 30, 2018 Deferred tax asset $ 1,194,102 $ 986,095 Valuation allowance (1,194,102 ) (986,095 ) Net deferred tax asset $ — $ —

ORGANIZATION AND DESCRIPTION _2

ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares	Oct. 27, 2016	Oct. 29, 2015	May 26, 2015	Dec. 31, 2018	Jun. 30, 2018	May 01, 2018
Date of incorporation				Sep. 26, 2014
Common stock, issued				20,943,846	19,170,846
Common stock outstanding				20,943,846	19,170,846	19,170,827
Shuhai Information Skill (HK) Limited [Member]
Ownership rights acquired		82.00%
Business combination, consideration transferred		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 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 together own 100% of the ownership rights in Shuhai Skill (HK), transferred all of the issued and outstanding ordinary shares of Shuhai Skill (HK) to the Company in exchange for the issuance of an aggregate of 6,666,667 shares of Common Stock, thereby causing Shuhai Skill (HK) and its wholly owned subsidiaries, Tianjin Information Sea Information Technology Co., Ltd. (“Tianjin Information”), a limited liability company incorporated under the laws of the PRC, and Harbin Information Sea Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC, to become wholly-owned subsidiaries of the Company, and Shuhai Information Technology Co., Ltd., also a limited liability company incorporated under the laws of the PRC (“Shuhai Beijing”), to become a variable interest entity (“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.
Common stock, issued		18,333,333
Common stock outstanding		15,000,000
Mr. Zhixin Liu [Member]
Number of new share issued			6,666,667
Ms. Zhixin Liu [Member]
Number of new share issued	1,666,667

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	Dec. 21, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Going Concern
Accumulated deficit		$ 4,868,884		$ 4,868,884		$ 4,124,947
Revenue					$ 9,034
Net proceeds from issuance of stock	$ 5,700,000

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	6 Months Ended
	Dec. 31, 2018
Office, Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful life (in years)	5 years
Office, Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful life (in years)	10 years
Office Equipment [Member] | Minimum [Member]
Estimated useful life (in years)	3 years
Office Equipment [Member] | Maximum [Member]
Estimated useful life (in years)	5 years
Vehicle [Member]
Estimated useful life (in years)	5 years

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - CNY	Dec. 31, 2018	Dec. 31, 2017
Foreign currency exchange rate	6.8764	6.5064
Foreign currency average exchange rate	6.8587	6.6416

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	Dec. 21, 2018	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2018CNY (¥)	Jun. 30, 2018USD ($)
Cash equivalents		$ 0		$ 0			$ 0
Deferred registration costs							$ 72,532
Research and development expenses		$ 41,114	$ 77,002	$ 103,885	$ 171,562
Escrow account maturity terms	A period of 18 months or longer subsequent to the common stock offering.
CNY
Cash in state-owned banks | ¥						¥ 500,000
Minimum [Member]
Intangible assets useful life				5 years
Maximum [Member]
Intangible assets useful life				10 years

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Subtotal	$ 137,728	$ 126,068
Less: Accumulated depreciation	86,108	70,798
Total	51,620	55,270
Office, Furniture and Fixtures [Member]
Subtotal	54,565	71,027
Vehicle [Member]
Subtotal	2,909	3,005
Office Equipment [Member]
Subtotal	$ 80,254	$ 52,036

PROPERTY AND EQUIPMENT (Detai_2

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 6,186	$ 6,969	$ 17,631	$ 13,638

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Subtotal	$ 32,141	$ 18,181
Less: Accumulated depreciation	5,839	4,294
Total	26,302	13,887
Software Registration Right [Member]
Subtotal	5,215	4,929
Patent [Member]
Subtotal	15,265	1,203
Value-added Telecommunications Business License [Member]
Subtotal	$ 11,661	$ 12,049

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 806	$ 419	$ 1,618	$ 834

PREPAID EXPENSES AND OTHER CU_3

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Security deposit	$ 46,140	$ 55,156
Prepaid expenses and advances	62,848	65,769
Others	13,375	6,955
Total	$ 122,363	$ 127,880

ACCRUED EXPENSES AND OTHER PA_3

ACCRUED EXPENSES AND OTHER PAYABLES (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Payables and Accruals [Abstract]
Deposit	$ 30,482	$ 31,493
Salary payable and other payable	14,168	115,785
Advances from customers	2,908	3,005
Total	$ 73,747	$ 150,283

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative)	Nov. 11, 2017USD ($)	Jan. 01, 2016USD ($)	Apr. 30, 2017USD ($)	Apr. 30, 2018USD ($)	Apr. 30, 2018CNY (¥)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Jun. 30, 2018USD ($)
Mr. Zhixin Liu [Member]
Amount due to president						$ 8,726		$ 8,726		$ 27,058
Harbin Jinfenglvyuan Biotechnology Co., Ltd [Member]
Purchased a used car	$ 2,916
Membership Service Agreements [Member] | Xin Platform APP [Member]
Service fee				$ 150
Membership Service Agreements [Member] | Xin Platform APP [Member] | CNY
Service fee | ¥					¥ 1,000
Agency Agreements [Member] | Xin Platform APP [Member] | Seven Shareholders [Member]
Usage fee paid				750
Deposit paid				750
Reward received				$ 8
Car Rental Agreement [Member] | Mr. Zhixin Liu [Member]
Rent expenses						$ 2,187	$ 2,258	$ 4,374	$ 4,516
Car Rental Agreement [Member] | Mr. Zhixin Liu [Member]
Lease expiration date		Dec. 31, 2018
Rent expenses		$ 750
Apartment Rental Agreement [Member] | Mr. Zhixin Liu [Member]
Lease expiration date			Apr. 30, 2019
Rent expenses			$ 2,916

COMMON STOCK (Details Narrative

COMMON STOCK (Details Narrative)	Dec. 21, 2018USD ($)$ / sharesshares	May 01, 2018shares	Sep. 30, 2018USD ($)$ / sharesshares	Sep. 30, 2018CNY (¥)shares	Nov. 30, 2018USD ($)$ / sharesshares	Dec. 31, 2018USD ($)$ / sharesshares	Dec. 31, 2017USD ($)	Sep. 30, 2018¥ / shares	Aug. 22, 2018shares	Jun. 30, 2018USD ($)$ / sharesshares
Reverse stock split		1 for 3
Maximum common stock awarded | shares						375,000,000				375,000,000
Common stock, outstanding | shares		19,170,827				20,943,846				19,170,846
Previous common stock, outstanding | shares		57,511,771
Common stock, per share | $ / shares						$ 0.001				$ 0.001
Proceeds from common stock | $	$ 5,700,000					$ 4,748,422
Gross proceeds from common stock | $	6,700,000
Deposit on escrow account | $	$ 1,000,000					$ 1,000,000
Escrow Agreement [Member]
Number of common stock sold | shares	1,667,500
Common stock, per share | $ / shares	$ 4
Held at escrow account | $	$ 600,000
Escrow deposit disbursed | $	$ 400,000
Escrow deposit disbursed term	Five business days upon the underwriter has confirmed receipt of a written legal opinion from PRC legal counsel.
Description of warrants issued	The underwriters to purchase a number of shares of common stock equal to 7% of the total number of shares of common stock sold in this offering at an exercise price equal to 150% of the offering price of the common stock sold in this offering. These warrants may be purchased in cash or via cashless exercise, will be exercisable for five years from the effective date of the Registration Statement on Form S-1
Investor [Member]
Number of common stock sold | shares			84,000	84,000
Common stock, per share | $ / shares			$ 2.94
Proceeds from common stock | $			$ 244,000
Investor [Member] | CNY
Common stock, per share | ¥ / shares								¥ 20
Proceeds from common stock | ¥				¥ 1,680,000
Third Party Investor [Member]
Number of common stock sold | shares					21,500
Common stock, per share | $ / shares					$ 2.92
Proceeds from common stock | $					$ 62,780
Equity Incentive Plan 2018 [Member]
Maximum common stock awarded | shares									4,000,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Provisions For Income Taxes
Current
Deferred	115,093	97,875	208,007	200,000
Increase in valuation allowance	(115,093)	(97,875)	(208,007)	(200,000)
Total

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Net deferred tax asset
Deferred tax asset	$ 1,194,102	$ 986,095
Valuation allowance	(1,194,102)	(986,095)
Net deferred tax asset

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Standard corporate income tax rate					25.00%
Net operating losses	$ 460,371		$ 391,501		$ 832,030	$ 799,998
Increase in valutation allowance		$ 92,915		$ 102,135

COMMITMENTS (Details Narrative)

COMMITMENTS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Operating Lease Agreement [Member]
Lease expiration date	Feb. 28, 2019
Monthly rent	$ 5,000
Future rental payment	10,000
Rent expense		$ 15,519	$ 15,897	$ 30,786	$ 31,794
Operating Lease Agreement [Member] | CNY
Monthly rent	35,192
Future rental payment	$ 70,384
Property Management Contract [Member]
Lease expiration date	Feb. 28, 2019
Monthly rent	$ 10,000
Rent expense	21,000
Property Management Contract [Member] | CNY
Monthly rent	70,384
Rent expense	$ 140,768

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	Feb. 11, 2019	Dec. 31, 2018	Dec. 21, 2018	Jun. 30, 2018
Escrow deposit		$ 1,000,000	$ 1,000,000
Subsequent Event [Member]
Escrow deposit	$ 400,000