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Leases

9 Months Ended

Mar. 31, 2025

Note 11. 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, 2025, all of the Company’s lease agreements of US subsidiaries have expired or terminated early. On January 1, 2025, Trans Pacific Shanghai signed a new office lease agreement and is effective through December 31, 2026. $95,835 was recognized as ROU.

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 1.75 years.

For the three months ended March 31, 2025 and 2024, rent expense amounted to approximately nil and $263,411, respectively. For the nine months ended March 31, 2025 and 2024, rent expense amounted to approximately $495,788 and $434,480, respectively.

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

Twelve Months Ending September 30,	Operating Lease Amount
2026	$	60,316
2027		45,237
Total lease payments		105,553
Less: Interest		9,718
Present value of lease liabilities	$	95,835

The Company’s Right-of-use assets, net, was as follows:

	March 31,			June 30,
	2025			2024
Beginning balance	$	452,435		$	753,588
Increasing		95,835			-
Amortization		(98,327	)		(736,090	)
Disposal		(354,108	)		17,498
Ending balance		95,835			452,435

Less: Impairment reserve		-			(354,108	)
Right-of-use assets, net	$	95,835		$	98,327

Movement of impairment for Right-of-use assets is as follows:

	March 31,			June 30,
	2025			2024
Beginning balance	$	354,108		$	371,606
Disposal		(354,108	)		(17,498	)
Ending balance	$	-		$	354,108