Accounts Payable and Accrued Liabilities

3 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

16. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities amounted to $2,696,083 and $2,664,538 as of September 30, 2022 and June 30, 2022, respectively. Accounts payables are mainly payables to vendors and accrued liabilities are mainly accrued interest of convertible notes payables and accrued contingent liabilities (see footnote #30).

	September 30, 2022		June 30, 2022
Accounts payable	$	2,118,075	$	2,079,607
Accrued liabilities		327,110		334,033
Legal liabilities (See below for detail explanation)		250,898		250,898
Total accounts payable and accrued liabilities:	$	2,696,083	$	2,664,538

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of June 30, 2022, there were no legal claims pending or threatened against the Company that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows. However, as of the date of this filing, we were involved in the following legal proceedings.

● On December 11, 2013, the Company was served with a complaint from two convertible note holders and investors in the Company. On February 21, 2017, the Company signed a settlement agreement with the plaintiffs in the matter of Hannan vs. Sugarmade. Under the terms of the settlement agreement, the Company agreed to pay the plaintiffs $227,000 to settle all claims against the Company, which included the payoff of two notes outstanding. The parties had estimated the value of the notes at approximately $80,000. Third parties had purchased the two notes during the year ended June 30, 2020. As of September 30, 2022 and June 30, 2022, there remains a balance, plus accrued interest due under the notes of $250,898 and $250,898, respectively.

There can be no assurances the ultimate liability relative to these lawsuits will not exceed what is outlined above.

The company fully recognize this legal liability.