Commitments and Contingencies

12 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

32. Commitments and Contingencies

On February 23, 2018 the Company entered into lease agreement for a new office space as part of the plan to expand operation, the lease is set to commence Commencing March 1, 2018. The term of the lease is for a (5) Five Years with 1 month free on the 1st year of the term. The monthly rent on the 1st year will be $11,770 with a 3% increase for each subsequent year. Total commitment for the full term of the lease will be $737,367. As of the date of this filing, this property became the headquarter of the company.

Our warehouse along with some office space is located at 20529 East Walnut Drive North, Diamond Bar, California, where we lease approximately 11,627 square feet of combined space. The lease term is for five years and two months ending on April 30, 2025. The current monthly rental payment for the facility is $13,022.

On February 1, 2021, the Company entered into lease agreement with Magnolia Extracts, LLC dba Nug Ave-Lynwood, a California limited liability company for a certain regulatory permit issued by the City of Lynwood authorizing commercial retailer non-storefront operations at 11118 Wright Road, Lynwood, CA 90262. The lease is set to commence Commencing February 1, 2021. The lease payment shall equal $10,000 per month and the lease term is on month by month basis. Parties have agreed that the first month’s rent payment shall equal $7,000 and the Company shall pay to owner a refundable security deposit of $20,000 within 10 days of the effective day.

For The Year Ended
June 30, 2021
Lease Cost
Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations)	$	308,925
Other Information
Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2021	$	220,328
Remaining lease term – operating leases (in years)		2.75
Average discount rate – operating leases		10	%
The supplemental balance sheet information related to leases for the periods are as follows:
Operating leases
Short-term Right-of-use assets	$	243,406
Long-term Right-of-use assets	$	486,253
Total operating lease assets	$	729,659
Short-term operating lease liabilities	$	239,521
Long-term operating lease liabilities	$	524,149
Total operating lease liabilities	$	763,670

Maturities of the Company’s lease liabilities are as follows:
Period ending June 30,		Operating
		Lease
2022		305,040
2023		273,425
2024		172,465
2025		147,446
Total lease payments		898,376
Less: Imputed interest/present value discount		(134,706	)
Present value of lease liabilities	$	763,669