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Leases

3 Months Ended

Sep. 30, 2024

7. Leases

As of September 30, 2024, the Company had operating and finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates from February 2025 through July 2034 with options to renew for varying terms at the Company’s sole discretion. The Company has not included these options to extend or terminate in the calculation of ROU assets or lease liabilities, as there is no reasonable certainty, as of the date of this Quarterly Report, that these options will be exercised. The Company had certain sublease contracts and recognized US$727,498 and US$239,478 lease income, recorded in other income, during the three months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company does not recognize any additional operating lease liabilities.

The components of lease expenses were as follows:

	September 30, 2024		September 30, 2023
	US$		US$
Operating:
Operating lease expenses		8,111,425		5,218,558

Financing:
Accretion		9,008		13,387
Amortization – included in costs of sales		38,733		44,437
Total		47,741		57,824

The Company recorded operating lease expenses of US$8,111,425 and US$5,218,558 during the three months ended September 30, 2024 and 2023, respectively. Specifically, US$7,621,771 and US$5,119,738 of operating lease expenses were recorded in costs of sales for the three months ended September 30, 2024 and 2023, respectively. US$93,000 and US$98,820 of operating lease expenses were recorded in general and administrative expenses for the three months ended September 30, 2024 and 2023, respectively. US$396,654 and nil of operating lease expenses were recorded in other expenses for the three months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, maturities of lease liabilities for each of the following fiscal years ending June 30 and thereafter were as follows:

	Operating			Finance
	US$			US$
2025		20,326,296			133,049
2026		29,216,224			129,332
2027		28,967,443			61,194
2028		29,694,748			5,866
2029 and beyond		48,526,954			-
Total minimum lease payment		156,731,665			329,441
Less: imputed interest		(41,763,350	)		(39,964	)
Total lease liabilities		114,968,315			289,477
Less: current potion		(26,272,945	)		(155,625	)
Non-current portion		88,695,370			133,852

Weighted average remaining lease term:

Operating leases			5.06 years
Finance leases			2.11 years

Weighted average discount rate:

Operating leases			10.28	%
Finance leases			11.25	%