Leases

6 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

Note 11 – Leases

In conjunction with the acquisition on July 31, 2020 (discussed in Note 3), the Company assumed a lease agreement for office space, which had under two years remaining on upon the acquisition. The assets and liabilities from operating leases are recognized at the acquisition date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. The lease term includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend or not terminate the lease that the Company is reasonably certain to exercise, or any option to extend or not to terminate a lease controlled by the lessor.

Short-term leases, which have an initial term of 12 months or less, are not recorded on the unaudited condensed consolidated balance sheets.

The Company’s operating lease does not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on incremental borrowing rate of the Company, which is determined using the interest rate of the acquired Company’s long-term debt at the time of the commencement of the lease, which was 5%.

The Company’s weighted-average remaining lease term relating to its operating leases is 1.42 years, with a weighted-average discount rate of 5%.

The Company incurred lease expense for its operating leases of $87,868 which was included in “General and administrative expenses,” for the six months ended December 31, 2020. The Company incurred lease expense for its operating leases of $53,363 which was included in “General and administrative expenses,” for the three months ended December 31, 2020. 

At December 31, 2020, the Company had a right-of-use-asset related to operating leases of $388,854 and accumulated amortization related to operating leases of $86,320, both of which are included as right of use asset, net on the unaudited condensed consolidated balance sheets.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2020.

Maturity of Lease Liability:
Remainder of 2021	$	75,227
Year ending 2022		150,455
Total undiscounted operating lease payments		225,682
Less: imputed interest		(7,789	)
Present value of operating lease liabilities	$	217,893