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16. Commitments and contingencies
 9 Months Ended
Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies

Note 16 - Commitments and contingencies

 

Lease commitment

 

The Company has adopted ASC842 since its inception date, April 11, 2018. The Company has entered into a lease agreement for office and warehouse space with a lease period from December 1, 2018 until December 31, 2020. On August 24, 2020, the Company negotiated for new terms to extend the lease. The lease term is amended and extended through December 31, 2023.

 

On September 1, 2020, in addition to the primary fulfillment center, the Company leased a second fulfillment center in City of Industry, California. The base rental fee is $27,921 to $29,910 per month through October 31, 2023.

 

Total commitment for the full term of these leases is $2,346,200. $1,987,363 and $262,875 of operating lease right-of-use assets and $2,073,684 and $262,875 of operating lease liabilities were reflected on the March 31, 2021 and June 30, 2020 financial statements, respectively.

  

Nine Months Ended March 31, 2021 and 2020:

 

Lease cost  3/31/2021   3/31/2020 
Operating lease cost (included in G&A in the Company's statement of operations)  $559,606   $275,859 
           
Other information          
Cash paid for amounts included in the measurement of lease liabilities   473,285    275,859 
Remaining term in years   2.5    0.75 
Average discount rate - operating leases   8%    8% 

 

The supplemental balance sheet information related to leases for the period is as follows:

 

Operating leases  3/31/2021   6/30/2020 
Right of use asset - non current  $1,987,363   $262,875 
           
Lease Liability - current   715,083    262,875 
Lease Liability - non current   1,358,601    – 
Total operating lease liabilities  $2,073,684   $262,875 

  

Maturities of the Company’s lease liabilities are as follows:

 

   Operating 
   Lease 
For the period from April 1, 2021 to June 30, 2021  $209,762 
For Year ending June 30:     
2022   847,845 
2023   859,881 
2024   371,639 
Less: Imputed interest/present value discount   (215,443)
Present value of lease liabilities  $2,073,684 

 

Contingencies

 

Except as disclosed in Note 17 below, the Company is not currently a party to any material legal proceedings, investigation or claims. However, the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business. While the Company is not presently subject to any material legal proceedings, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company.

 

In an effort to contain or slow the COVID-19 outbreak, authorities across the world have implemented various measures, some of which have been subsequently rescinded or modified, including travel bans, stay-at-home orders and shutdowns of certain businesses. The Company anticipates that these actions and the global health crisis caused by the COVID-19 outbreak, including any resurgences, will continue to negatively impact global economic activity. While the COVID-19 outbreak has not had a material adverse impact on the Company’s operations to date, it is difficult to predict all of the positive or negative impacts the COVID-10 outbreak will have on the Company’s business.