Other Long-Term Assets – Deposits, Net

6 Months Ended

Dec. 31, 2021

Other Longterm Assets Deposits [Abstract]

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:

	December 31,			June 30,
	2021			2021
Rental and utilities deposits	$	93,223		$	111,352
Freight logistics deposits (1)		50,000			3,181,746
Total other long-term assets - deposits	$	143,223		$	3,293,098
Less: allowances for deposits		(9,311	)		(3,177,127	)
Other long-term assets- deposits, net	$	133,912		$	115,971

(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 expects 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. For the three and six months ended December 31, 2021, the Company wrote off $ 3,173,408 of the other long term assets – deposit.

Movement of allowance for deposits are as follows:

	December 31,			June 30,
	2021			2021
Beginning balance	$	3,177,127		$	-
Allowance for deposits		-			3,098,852
Less: Write-off		(3,173,408	)		-
Exchange rate effect		5,592			78,275
Ending balance	$	9,311		$	3,177,127