Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | DATASEA INC. | |
Entity Central Index Key | 0001631282 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
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 | Q3 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Current Assets | ||
Cash | $ 5,341,969 | $ 1,031,486 |
Inventory | 74,983 | 75,910 |
Prepaid expenses and other current assets | 114,491 | 127,880 |
Total Current Assets | 5,531,443 | 1,235,276 |
Property and equipment, net | 46,952 | 55,270 |
Intangible assets, net | 58,486 | 13,887 |
Deferred registration costs | 72,532 | |
Escrow | 600,000 | |
Total Assets | 6,236,881 | 1,376,965 |
Current Liabilities | ||
Accounts payable | 13,389 | 13,503 |
Accrued expenses and other payables | 103,463 | 150,283 |
Loan payable-shareholder | 11,174 | 27,058 |
Total Current Liabilities | 128,026 | 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 March 31, 2019 and June 30, 2018, respectively | 20,945 | 19,171 |
Additional paid-in capital | 11,104,666 | 5,121,102 |
Accumulated comprehensive income | 393,127 | 170,795 |
Deficit | (5,409,883) | (4,124,947) |
Total Stockholders' Equity | 6,108,855 | 1,186,121 |
Total Liabilities and Stockholders' Equity | $ 6,236,881 | $ 1,376,965 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | 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 | $ 0.001 | |
Common stock, authorized | 375,000,000 | 375,000,000 | 375,000,000 | |
Common stock, issued | 20,943,846 | 19,170,846 | 19,170,846 | |
Common stock, outstanding | 20,943,846 | 20,943,846 | 19,170,846 | 19,170,827 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 6,468 | $ 15,502 | ||
Cost of goods sold | 70 | 91 | ||
Gross (deficit)profit | 6,398 | 15,411 | ||
Operating expenses: | ||||
Selling expenses | 34,388 | 82,946 | 183,240 | 148,607 |
General and administrative expenses | 510,983 | 290,560 | 1,013,136 | 891,335 |
R&D expenses | 29,218 | 77,867 | 133,103 | 251,882 |
Total operating expenses: | 574,589 | 451,373 | 1,329,479 | 1,291,824 |
Loss from operations | (574,589) | (444,975) | (1,329,479) | (1,276,413) |
Other income : | ||||
Other (expense) income, net | 894 | 6,038 | (2,571) | 37,478 |
Interest income | 32,696 | 47,114 | ||
Total other income(expense) | 33,590 | 6,038 | 44,543 | 37,478 |
Net loss | (540,999) | (438,937) | (1,284,936) | (1,238,935) |
Other comprehensive loss | ||||
Foreign currency translation adjustment | 198,209 | 55,862 | 222,332 | 311,020 |
Total comprehensive loss | $ (342,790) | $ (383,075) | $ (1,062,604) | $ (927,915) |
Net loss per share | ||||
Basic and diluted (in dollars per share) | $ (0.03) | $ (0.02) | $ (0.06) | $ (0.06) |
Weighted average shares outstanding | ||||
Basic and diluted (in shares) | 20,943,846 | 19,170,827 | 19,845,627 | 19,116,571 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED 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] | |||||
Issuance of common stock | $ 301 | 2,118,224 | 2,118,525 | ||
Issuance 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 | 5,676,224 | 5,677,892 | ||
Sale of common stock-offering (in shares) | 1,667,500 | ||||
Net loss | (1,284,936) | (1,284,936) | |||
Foreign currency translation gain | 222,332 | 222,332 | |||
Ending Balance at Mar. 31, 2019 | $ 20,945 | 11,104,666 | (5,409,883) | 393,127 | $ 6,108,855 |
Ending Balance (in shares) at Mar. 31, 2019 | 20,943,846 | 20,943,846 | |||
Beginning Balance (in shares) at Dec. 31, 2018 | 20,943,846 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ (540,999) | ||||
Ending Balance at Mar. 31, 2019 | $ 20,945 | $ 11,104,666 | $ (5,409,883) | $ 393,127 | $ 6,108,855 |
Ending Balance (in shares) at Mar. 31, 2019 | 20,943,846 | 20,943,846 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,284,936) | $ (1,238,935) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 28,285 | 22,655 |
Changes in current assets and current liabilities: | ||
Accounts receivable | 229 | |
Inventory | 279 | 22,910 |
Prepaid expenses and other current assets | 12,099 | (65,303) |
Accrued expenses and other payables | (44,790) | 2,233 |
Net cash used in operating activities | (1,289,063) | (1,256,211) |
Cash flows from investing activities: | ||
Acquisition of office equipment and intangible assets | (64,531) | (14,288) |
Net cash used in investing activities | (64,531) | (14,288) |
Cash flows from financing activities: | ||
Payment of loan payable - shareholder, net | (15,392) | (25,972) |
Net proceeds from sale of common stock-offering | 5,240,889 | |
Deferred financing costs | (73,721) | |
Net proceeds from sale of common stock | 308,858 | 1,419,686 |
Net cash provided by financing activities | 5,534,355 | 1,319,993 |
Effect of exchange rate changes on cash | 129,722 | 324,284 |
Net increase in cash | 4,310,483 | 373,778 |
Cash - beginning of period | 1,031,486 | 1,174,950 |
Cash - end of period | 5,341,969 | 1,548,728 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income tax |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Mar. 31, 2019 | |
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, par value $0.001 per share (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 a technology company in the PRC engaged in the development of information technology (“IT”) systems and network security solutions. The Company primarily focuses on IT systems security and leverages its proprietary technologies, intellectual property and market intelligence as it seeks to provide comprehensive and optimized security as well as new media advertising, micro-marketing, and data analysis solutions to its clients. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Mar. 31, 2019 | |
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 no revenues during three and nine months ended March 31, 2019, has a deficit of approximately $5,410,000 at March 31, 2019, 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 an underwritten initial public offering of Common Stock with net proceeds $5.2 million, after deducing placement agent’ commissions and other offering costs and $600,000 of offering net proceeds held in escrow, which provides the Company with working capital for its operations for calendar year 2019. The Company plans to transfer the offering net proceeds to China during the fourth quarter of fiscal year 2018. The Company expects to generate its revenue through continuing establishment and ultimate potential expansion its business and product innovation and development. If revenue is not generated or does not reach the level anticipated in the Company’s plans, 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, and if the Company is faced with a lack of financial resources, its prospects, business and results of operations will be adversely affected. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2019 | |
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 nine months ended March 31, 2019 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 Information or its designee(s) the irrevocable right and option to acquire all or a portion of Shuhai Beijing Shareholders’ equity interests in Shuhai Beijing for an option price of RMB 0.001 for each capital contribution of RMB1.00. Pursuant to the terms of the Option Agreement, Tianjin Information and the Shuhai Beijing shareholders 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 Shareholders 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 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 March 31, 2019 and June 30, 2018, the Company has no such 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. Inventory Inventory, comprised principally of smart student identification cards related to the Company’s “Safe Campus” security product, as well as products associated therewith comprised of routers to be 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 March 31, 2019 and June 30, 2018 . Deferred REGISTRATION Costs The Company had capitalized certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred registration cost until such financings are consummated. After consummation of the Company’s initial public offering on December 21, 2018, these costs were 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 were subsequently reclassified to additional paid-in capital after the Company successfully completed its initial public offering. ESCROW Escrow represents cash held in an indemnification escrow account related to requirements of financing agreement signed with the underwriter of the Company’s initial public offering for a period of 18 months or longer subsequent to the closing of the initial public offering on December 21, 2018. 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 Vehicles 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 the Company’s 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 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 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 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 March 31, 2019, 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 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 to be generated by the asset. 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 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. 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 March 31, 2019 and 2018, the Company incurred research and development expenses of $29,218 and $77,867, respectively. For the nine months ended March 31, 2018 and 2017, the Company incurred research and development expenses of $133,103 and $251,882, 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 (or approximately $73,238) 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 (loss) 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 RMB to USD for the purposes of preparing the consolidated financial statements were as follows March 31, 2019 2018 Period end USD:RMB exchange rate 6.7121 6.2802 Average USD:RMB exchange rate 6.8271 6.5480 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 asset 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. With a twelve-month or less initial 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 the 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, 2019 and 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. Management does not believe that any other 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 | 9 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 4 – PROPERTY AND EQUIPMENT Property is equipment are summarized as follows: March 31, 2019 (Unaudited) June 30, 2018 Office furniture and fixtures $ 57,807 $ 71,027 Vehicle 2,980 3,005 Office equipment 81,576 52,036 Subtotal 142,363 126,068 Less: accumulated depreciation 95,411 70,798 Total $ 46,952 $ 55,270 Depreciation expense for the three months ended March 31, 2019 and 2018 was $7,156 and $7,748 respectively. Depreciation expense for the nine months ended March 31, 2019 and 2018 was $24,787 and $21,386 respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 –intangible assets Intangible assets are summarized as follows: March 31, 2019 (Unaudited) June 30, 2018 Software registration right $ 38,715 $ 4,929 Patent 15,639 1,203 Value-added telecommunications business license 11,947 12,049 Subtotal 66,301 18,181 Less: Accumulated amortization 7,815 4,294 Total $ 58,486 $ 13,887 Amortization expense for the three months ended March 31, 2019 and 2018 were $1,880 and $434, respectively. Amortization expense for the nine months ended March 31, 2019 and 2018 were $3,498 and $1,268 respectively |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 June 30, 2018 Security deposit $ 47,240 $ 55,156 Prepaid expenses and advances 53,911 65,769 Others 13,340 6,955 Total $ 114,491 $ 127,880 |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 9 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER PAYABLES | Note 7 – accrued expenses and other payables Accrued expenses and other payable consisted of the following: March 31, 2019 June 30, 2018 Deposit $ 31,227 $ 31,493 Salary and other payables 69,256 115,785 Advances from customers 2,980 3,005 Total $ 103,463 $ 150,283 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 8 – related party transactions The Company’s President, Zhixin Liu, has paid certain operating expenses on behalf of the Company. As of March 31, 2019 and June 30, 2018, the amounts due to the President were $11,174 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 was renewed and expires on December 31, 2020. The rent paid under this agreement was $2,197 and $2,291 for the three months ended March 31, 2019 and 2018, respectively. The rent paid under this agreement was $6,591 and $6,872 for the nine months ended March 31, 2019 and 2018, 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 and significant shareholder 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 $2,930. The agreement was renewed and the term was extended to April 30, 2020. Rent expense for the three and nine months ended March 31, 2019 was $733 and $2,197, respectively. Rent expense for the three and nine months ended March 31, 2018 was $764 and $2,290, respectively. 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 the Xin Platform APP. Each agent will receive $8 for each customer that applies for a credit card of China Minsheng Bank via the Xin Platform APP. This project was suspended due to the change of product policy with China Minsheng Bank. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Mar. 31, 2019 | |
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 (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 $244,666). 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, underwritten initial public 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 commissions 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 was 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 was disbursed to the Company in February 2019when the underwriter confirmed receipt of a written legal opinion from PRC legal counsel in connection with such offering. 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 101,500 shares of Common Stock at an exercise price of $6. 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 | 9 Months Ended |
Mar. 31, 2019 | |
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 nine months ended March 31, 2019 and 2018 as 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 nine months ended March 31, 2019 and 2018 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 had net operating losses (“NOL”) of $540,999 and $438,937 during three months ended March 31, 2019 and 2018, respectively, $1,284,936 and $1,238,935 during nine months ended March 31, 2019 and 2018 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 March 31, 2019 and 2018 and no deferred tax asset has been recorded. The provisions for income taxes is summarized as follows: Nine months ended March 31, 2019 (Unaudited) Nine months ended March 31, 2018 (Unaudited) Current $ — $ — Deferred 321,234 309,734 Increase in valuation allowance (321,234 ) (309,734 ) Total $ — $ — Three months ended March 31, 2019 (Unaudited) Three months ended March 31, 2018 (Unaudited) Current $ — $ — Deferred 135,250 109,734 Increase in valuation allowance (135,250 ) (109,734 ) Total $ — $ — The Company’s net deferred tax asset as of March 31, 2019 and June 30, 2018 is as follows: March 31, 2019 (Unaudited) June 30, 2018 Deferred tax asset – Net Operating Loss $ 1,307,329 $ 986,095 Valuation allowance (1,307,329 ) (986,095 ) Net deferred tax asset $ — $ — |
COMMIMENTS
COMMIMENTS | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMIMENTS | NOTE 11 – Commiments Lease Agreement In December 2017, the Company renewed the one-year operating lease agreement for its office in Beijing. The lease has a monthly rent of RMB 35,192 (or approximately $5,000). The lease was renewed and extended to August 31, 2019. Future rental payment due under the lease is RMB 175,960(or approximately $26,000). Rent expense for the three months ended March 31, 2019 and 2018 was $19,635 and $19,963 respectively. Rent expense for the nine months ended March 31, 2019 and 2018 was $61,834 and $60,906, respectively. In December 2017, the Company renewed the one-year office 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). The lease was renewed and extended to August 31, 2019. Future management fee due under the contract is RMB351,920 (or approximately $52,000). On March 20, 2019, the Company entered into an one-year operating lease agreement for renting an apartment for a senior manager. Pursuant to the lease agreement, the lease will expire in March 2020 and has monthly rent of RMB 5,200 (or approximately $760). Future rental payment due under the lease is RMB60,861 (or approximately $8,900). The Company should pay the commission of RMB 4,550 (or approximately $670). On April 19, 2018, the Company renewed the one-year operating lease for the office rented in Beijing, China for Ms. Zhixin Liu, President of the Company. The lease has a monthly rent of RMB9,500 (or approximately $1,392). Rent expense for the three months ended March 31, 2019 and 2018 was $4,175 and $4,352, respectively. Rent expense for the nine months ended March 31, 2019 and 2018 was $12,524 and $13,057, respectively. The lease was renewed on April 20, 2019 and will expire in October 2019 with a monthly rent of RMB10,500 (or approximately $1,538). Future rental payment due under the lease is RMB73,500 (or approximately $10,766). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS The Company has reviewed its subsequent events through May 15, 2019, the date these financial statements were issued and has determined that no material subsequent events have occurred that require recognition in or disclosure to the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
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 nine months ended March 31, 2019 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 Information or its designee(s) the irrevocable right and option to acquire all or a portion of Shuhai Beijing Shareholders’ equity interests in Shuhai Beijing for an option price of RMB 0.001 for each capital contribution of RMB1.00. Pursuant to the terms of the Option Agreement, Tianjin Information and the Shuhai Beijing shareholders 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 Shareholders 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 |
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 March 31, 2019 and June 30, 2018, the Company has no such 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. |
INVENTORY | Inventory Inventory, comprised principally of smart student identification cards related to the Company’s “Safe Campus” security product, as well as products associated therewith comprised of routers to be 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 March 31, 2019 and June 30, 2018 . |
DEFERRED REGISTRATION COSTS | Deferred REGISTRATION Costs The Company had capitalized certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred registration cost until such financings are consummated. After consummation of the Company’s initial public offering on December 21, 2018, these costs were 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 were subsequently reclassified to additional paid-in capital after the Company successfully completed its initial public offering. |
ESCROW | ESCROW Escrow represents cash held in an indemnification escrow account related to requirements of financing agreement signed with the underwriter of the Company’s initial public offering for a period of 18 months or longer subsequent to the closing of the initial public offering on December 21, 2018. |
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 Vehicles 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 the Company’s 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 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 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 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 March 31, 2019, 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 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 to be generated by the asset. 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 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. 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 March 31, 2019 and 2018, the Company incurred research and development expenses of $29,218 and $77,867, respectively. For the nine months ended March 31, 2018 and 2017, the Company incurred research and development expenses of $133,103 and $251,882, 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 (or approximately $73,238) 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 (loss) 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 RMB to USD for the purposes of preparing the consolidated financial statements were as follows March 31, 2019 2018 Period end USD:RMB exchange rate 6.7121 6.2802 Average USD:RMB exchange rate 6.8271 6.5480 |
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 asset 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. With a twelve-month or less initial 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 the 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, 2019 and 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. Management does not believe that any other 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) | 9 Months Ended |
Mar. 31, 2019 | |
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 Vehicles 5 years |
Schedule of exchange rates used to translate amounts | The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows March 31, 2019 2018 Period end USD:RMB exchange rate 6.7121 6.2802 Average USD:RMB exchange rate 6.8271 6.5480 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment is summarized as follows: March 31, 2019 (Unaudited) June 30, 2018 Office furniture and fixtures $ 57,807 $ 71,027 Vehicle 2,980 3,005 Office equipment 81,576 52,036 Subtotal 142,363 126,068 Less: accumulated depreciation 95,411 70,798 Total $ 46,952 $ 55,270 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets are summarized as follows: March 31, 2019 (Unaudited) June 30, 2018 Software registration right $ 38,715 $ 4,929 Patent 15,639 1,203 Value-added telecommunications business license 11,947 12,049 Subtotal 66,301 18,181 Less: Accumulated amortization 7,815 4,294 Total $ 58,486 $ 13,887 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid asset and other current assets | Prepaid expenses and other current assets consisted of the following: March 31, 2019 June 30, 2018 Security deposit $ 47,240 $ 55,156 Prepaid expenses and advances 53,911 65,769 Others 13,340 6,955 Total $ 114,491 $ 127,880 |
ACCRUED EXPENSES AND OTHER PA_2
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other payable | Accrued expenses and other payable consisted of the following: March 31, 2019 June 30, 2018 Deposit $ 31,227 $ 31,493 Salary and other payables 69,256 115,785 Advances from customers 2,980 3,005 Total $ 103,463 $ 150,283 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provisions for income taxes | The provisions for income taxes is summarized as follows: Nine months ended March 31, 2019 (Unaudited) Nine months ended March 31, 2018 (Unaudited) Current $ — $ — Deferred 321,234 309,734 Increase in valuation allowance (321,234 ) (309,734 ) Total $ — $ — Three months ended March 31, 2019 (Unaudited) Three months ended March 31, 2018 (Unaudited) Current $ — $ — Deferred 135,250 109,734 Increase in valuation allowance (135,250 ) (109,734 ) Total $ — $ — |
Schedule of net deferred tax asset | The Company’s net deferred tax asset as of March 31, 2019 and June 30, 2018 is as follows: March 31, 2019 (Unaudited) June 30, 2018 Deferred tax asset – Net Operating Loss $ 1,307,329 $ 986,095 Valuation allowance (1,307,329 ) (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 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | May 01, 2018 |
Date of incorporation | Sep. 26, 2014 | ||||||
Common stock, issued | 20,943,846 | 19,170,846 | 19,170,846 | ||||
Common stock outstanding | 20,943,846 | 20,943,846 | 19,170,846 | 19,170,827 | |||
Mr. Zhixin Liu [Member] | |||||||
Number of new share issued | 6,666,667 | ||||||
Ms. Zhixin Liu [Member] | |||||||
Number of new share issued | 1,666,667 | ||||||
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 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Dec. 21, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 |
Going Concern | ||||||
Accumulated deficit | $ 5,409,883 | $ 5,409,883 | $ 4,124,947 | |||
Revenue | $ 6,468 | $ 15,502 | ||||
Net proceeds from issuance of stock | $ 5,200,000 | |||||
Working capital | $ 600,000 | $ 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Mar. 31, 2019 | |
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 | Mar. 31, 2019 | Mar. 31, 2018 |
Foreign currency exchange rate | 6.7121 | 6.2802 |
Foreign currency average exchange rate | 6.8271 | 6.5480 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Dec. 21, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 |
Accounting Policies [Abstract] | ||||||
Cash equivalents | $ 0 | $ 0 | $ 0 | |||
Deferred registration costs | $ 72,532 | |||||
Research and development expenses | 29,218 | $ 77,867 | $ 133,103 | $ 251,882 | ||
Intangible assets useful life | 5 years | |||||
Escrow account maturity terms | A period of 18 months or longer subsequent to the common stock offering. | |||||
Cash in state-owned banks | $ 73,238 | $ 73,238 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Subtotal | $ 142,363 | $ 126,068 |
Less: accumulated depreciation | 95,411 | 70,798 |
Total | 46,952 | 55,270 |
Office, Furniture and Fixtures [Member] | ||
Subtotal | 57,807 | 71,027 |
Vehicle [Member] | ||
Subtotal | 2,980 | 3,005 |
Office Equipment [Member] | ||
Subtotal | $ 81,576 | $ 52,036 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expenses | $ 7,156 | $ 7,748 | $ 24,787 | $ 21,386 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Subtotal | $ 66,301 | $ 18,181 |
Less: Accumulated amortization | 7,815 | 4,294 |
Total | 58,486 | 13,887 |
Software Registration Right [Member] | ||
Subtotal | 38,715 | 4,929 |
Patent [Member] | ||
Subtotal | 15,639 | 1,203 |
Value-added Telecommunications Business License [Member] | ||
Subtotal | $ 11,947 | $ 12,049 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 1,880 | $ 434 | $ 3,498 | $ 1,268 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Security deposit | $ 47,240 | $ 55,156 |
Prepaid expenses and advances | 53,911 | 65,769 |
Others | 13,340 | 6,955 |
Total | $ 114,491 | $ 127,880 |
ACCRUED EXPENSES AND OTHER PA_3
ACCRUED EXPENSES AND OTHER PAYABLES (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Payables and Accruals [Abstract] | ||
Deposit | $ 31,227 | $ 31,493 |
Salary and other payables | 69,256 | 115,785 |
Advances from customers | 2,980 | 3,005 |
Total | $ 103,463 | $ 150,283 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 11, 2017 | Jan. 01, 2016 | Apr. 30, 2017 | Apr. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 |
Rent expenses | $ 733 | $ 764 | $ 2,197 | $ 2,290 | |||||
Harbin Jinfenglvyuan Biotechnology Co., Ltd [Member] | |||||||||
Purchased a used car | $ 2,916 | ||||||||
Mr. Zhixin Liu [Member] | |||||||||
Amount due to president | 11,174 | 11,174 | $ 27,058 | ||||||
Mr. Zhixin Liu [Member] | Car Rental Agreement [Member] | |||||||||
Lease expiration date | Dec. 31, 2020 | ||||||||
Rent expenses | $ 750 | ||||||||
Mr. Zhixin Liu [Member] | Apartment Rental Agreement [Member] | |||||||||
Lease expiration date | Apr. 30, 2020 | ||||||||
Rent expenses | $ 2,930 | ||||||||
Mr. Zhixin Liu [Member] | Car Rental Agreement [Member] | |||||||||
Rent expenses | $ 2,197 | $ 2,291 | $ 6,591 | $ 6,872 | |||||
Xin Platform APP [Member] | Membership Service Agreements [Member] | |||||||||
Service fee | $ 150 | ||||||||
Xin Platform APP [Member] | Seven Shareholders [Member] | Agency Agreements [Member] | |||||||||
Usage fee paid | 750 | ||||||||
Deposit paid | 750 | ||||||||
Reward received | 8 | ||||||||
CNY | Xin Platform APP [Member] | Membership Service Agreements [Member] | |||||||||
Service fee | $ 1,000 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | Dec. 21, 2018 | May 01, 2018 | Sep. 30, 2018 | Nov. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Aug. 22, 2018 | Jun. 30, 2018 |
Reverse stock split | 1 for 3 | ||||||||
Maximum common stock awarded | 375,000,000 | 375,000,000 | 375,000,000 | ||||||
Common stock, outstanding | 19,170,827 | 20,943,846 | 20,943,846 | 19,170,846 | |||||
Previous common stock, outstanding | 57,511,771 | ||||||||
Common stock, per share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Proceeds from common stock | $ 5,700,000 | $ 5,240,889 | |||||||
Gross proceeds from common stock | 6,700,000 | ||||||||
Deposit on escrow account | $ 1,000,000 | $ 600,000 | $ 1,000,000 | ||||||
Escrow Agreement [Member] | |||||||||
Number of common stock sold | 1,667,500 | ||||||||
Common stock, per share | $ 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 101,500 shares of common stock at an exercise price of $6. 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. | ||||||||
Investor [Member] | |||||||||
Number of common stock sold | 84,000 | ||||||||
Common stock, per share | $ 2.94 | ||||||||
Proceeds from common stock | $ 244,600 | ||||||||
Third Party Investor [Member] | |||||||||
Number of common stock sold | 21,500 | ||||||||
Common stock, per share | $ 2.92 | ||||||||
Proceeds from common stock | $ 62,780 | ||||||||
Equity Incentive Plan 2018 [Member] | |||||||||
Maximum common stock awarded | 4,000,000 | ||||||||
CNY | Investor [Member] | |||||||||
Common stock, per share | $ 20 | ||||||||
Proceeds from common stock | $ 1,680,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Provisions For Income Taxes | ||||
Current | ||||
Deferred | 135,250 | 109,734 | 309,734 | 321,234 |
Increase in valuation allowance | (135,250) | (109,734) | (309,734) | (321,234) |
Total |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Net deferred tax asset | ||
Deferred tax asset | $ 986,095 | $ 1,307,329 |
Valuation allowance | (986,095) | (1,307,329) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Standard corporate income tax rate | 25.00% | |||
Net operating losses | $ 540,999 | $ 438,937 | $ 1,284,936 | $ 1,238,935 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) | Apr. 20, 2019USD ($) | Apr. 20, 2019CNY (¥) | Mar. 20, 2019USD ($) | Mar. 20, 2019CNY (¥) | Apr. 19, 2018USD ($) | Apr. 19, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Rent expense | $ 19,635 | $ 19,963 | $ 61,834 | $ 60,906 | ||||||||
Office [Member] | ||||||||||||
Future rental payment | $ 52,000 | |||||||||||
Lease extended date | Aug. 31, 2019 | Aug. 31, 2019 | ||||||||||
Renewed property management contract term | 1 year | 1 year | ||||||||||
Expire date of contract | Feb. 28, 2019 | Feb. 28, 2019 | ||||||||||
Monthly management fee | $ 10,000 | |||||||||||
Office [Member] | CNY | ||||||||||||
Future rental payment | ¥ | ¥ 351,920 | |||||||||||
Monthly management fee | ¥ | 70,384 | |||||||||||
Operating Lease Agreement [Member] | Office [Member] | Beijing [Member] | ||||||||||||
Monthly rent | 5,000 | |||||||||||
Future rental payment | $ 26,000 | |||||||||||
Lease extended date | Aug. 31, 2019 | |||||||||||
Operating Lease Agreement [Member] | Office [Member] | Beijing [Member] | CNY | ||||||||||||
Monthly rent | ¥ | 35,192 | |||||||||||
Future rental payment | ¥ | ¥ 175,960 | |||||||||||
One Year Operating Lease Agreement [Member] | Senior Manager [Member] | ||||||||||||
Monthly rent | $ 760 | |||||||||||
Future rental payment | $ 8,900 | |||||||||||
Expire date | Mar. 31, 2020 | Mar. 31, 2020 | ||||||||||
Commission expense | $ 670 | |||||||||||
One Year Operating Lease Agreement [Member] | Ms. Zhixin Liu [Member] | ||||||||||||
Monthly rent | $ 1,392 | |||||||||||
Rent expense | $ 4,175 | $ 4,352 | $ 13,057 | |||||||||
One Year Operating Lease Agreement [Member] | Ms. Zhixin Liu [Member] | Subsequent Event [Member] | ||||||||||||
Monthly rent | $ 1,538 | |||||||||||
Future rental payment | $ 10,766 | |||||||||||
One Year Operating Lease Agreement [Member] | Ms. Zhixin Liu [Member] | ||||||||||||
Rent expense | $ 12,524 | |||||||||||
One Year Operating Lease Agreement [Member] | CNY | Senior Manager [Member] | ||||||||||||
Monthly rent | ¥ | ¥ 5,200 | |||||||||||
Future rental payment | ¥ | 60,861 | |||||||||||
Commission expense | ¥ | ¥ 4,550 | |||||||||||
One Year Operating Lease Agreement [Member] | CNY | Ms. Zhixin Liu [Member] | ||||||||||||
Monthly rent | ¥ | ¥ 9,500 | |||||||||||
One Year Operating Lease Agreement [Member] | CNY | Ms. Zhixin Liu [Member] | Subsequent Event [Member] | ||||||||||||
Monthly rent | ¥ | ¥ 10,500 | |||||||||||
Future rental payment | ¥ | ¥ 73,500 |