| OTHER LONG-TERM ASSETS - DEPOSITS, NET |
Note 8. OTHER LONG-TERM ASSETS – DEPOSITS,
NET The
Company’s other long-term assets – deposits are as follows:
| | |
June 30, | | |
June 30, | |
| | |
2021 | | |
2020 | |
| Rental and utilities deposits | |
$ | 111,352 | | |
$ | 64,663 | |
| Freight logistics deposits (1) | |
| 3,181,746 | | |
| 2,910,327 | |
| Total other long-term assets - deposits | |
| 3,293,098 | | |
| 2,974,990 | |
| Less: allowances for deposits | |
| (3,177,127 | ) | |
| - | |
| Other long-term assets- deposits, net | |
$ | 115,971 | | |
$ | 2,974,990 | |
| (1) | Certain customers require the Company to pay certain deposits for the
security of shipments and merchandise. These deposits are refundable at the end of their respective contract term. Approximately $3.1
million (RMB 20 million) of the balance was paid to BaoSteel Resources Co., Ltd. according to the agreement entered in March 2018. This
refundable deposit is to cover any possible loss of merchandise, as well as any non-performance on the part of the Company and its vendors.
The restricted deposit is expected be repaid to the Company when either the contract terms are expired by March 2023 or the contract is
terminated by the Company. Due to impact of COVID-19 and recent rising freight costs, the Company has not been able to fulfill the contracts
and expect it may not be able to collect the full deposit, as such the Company provided full allowance for the $3.1 million deposit with
BaoSteel. |
Movement
of allowance for deposits are as follows:
| | |
June 30, | | |
June 30, | |
| | |
2021 | | |
2020 | |
| Beginning balance | |
$ | - | | |
$ | - | |
| Allowance for deposits | |
| 3,098,852 | | |
| - | |
| Exchange rate effect | |
| 78,275 | | |
| - | |
| Ending balance | |
$ | 3,177,127 | | |
$ | - | |
|