Leases

9 Months Ended

Mar. 31, 2024

Leases [Abstract]

LEASES

Note 12. LEASES 

The Company determines if a contract contains a lease at inception which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s leases are classified as operating leases.

The Company has several lease agreements with lease terms ranging from two to five years. As of March 31, 2024, ROU assets and lease liabilities amounted to $198,888 and $430,663 (including $260,746 from the current portion of lease liabilities and $169,917 the noncurrent portion of lease liabilities), respectively and the weighted average discount rate was approximately 10.74%.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration and the weighted average remaining lease terms are 1.63 years.

For the three months ended March 31, 2024 and 2023, rent expense amounted to approximately $138,692 and $264,000, respectively. For the nine months ended March 31, 2024 and 2023, rent expense amounted to approximately $434,480 and $411,000, respectively.

The five-year maturity of the Company’s lease obligations is presented below:

Twelve Months Ending March 31,	Operating Lease Amount
2025	$	290,350
2026		143,588
2027		38,268
Total lease payments		472,206
Less: Interest		41,543
Present value of lease liabilities	$	430,663