Accounts Payable and Accrued Liabilities

6 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

17. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities amounted to $2,048,860 and $1,989,525 as of December 31, 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 #29).

	December 31, 2022		June 30, 2022
Accounts payable	$	1,514,423	$	1,460,260
Accrued liabilities		283,540		278,370
Legal liabilities (See below for detail explanation)		250,898		250,898
Total accounts payable and accrued liabilities:	$	2,048,860	$	1,989,525

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 December 31, 2022 and June 30, 2022, there remains a balance, plus accrued interest due under the notes of $227,000, respectively. No payment has been made.

● On April 1st, 2021, the Company entered a Payment (Installment) Agreement with a former employee to settle a dated labor case that was awarded by the Labor Commissioner in the State of California back on May 14, 2014 for an amount of $55,126.65. The company agreed to pay $58,756 at 10% annual interest rate accrue, the balance will be split into 18 equal payments of $3,528.71. As of December 31, 2022 and June 30, 2022, there remains a balance of $23,598, 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.