Leases

9 Months Ended

Mar. 31, 2022

Leases

Leases

6. Leases

A lease provides the lessee the right to control the use of an identified asset for a period in exchange for consideration. Operating lease right-of-use assets (“ROU assets”) are presented within the asset section of the Company’s Consolidated Balance Sheets, while lease liabilities are included within the liability section of the Company’s Consolidated Balance Sheets as of March 31, 2022.

ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the ROU assets for certain properties include the renewal options that the Company is reasonably certain to exercise.

The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company estimates a rate of 8.0% for the period ending March 31, 2022 based on historical lending agreements. ROU assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both ROU assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions, or covenants.

The Company occupies office facilities under lease agreements that expire at various dates. The Company does not have any significant finance leases. Total operating lease costs for the nine months ended March 31, 2022 were $38,121.

As of March 31, 2022, short term lease liabilities of $86,105 are included in “Accounts payable and accrued expenses” on the consolidated balance sheets. The table below presents total operating lease ROU assets and lease liabilities at:

	March 31, 2022		June 30, 2021
Operating lease right-of-use asset	$	273,449	$	-
Operating lease liabilities	$	290,186	$	-

The table below presents the maturities of operating lease liabilities as of March 31, 2022:

March 31, 2023	$	106,591
March 31, 2024		130,148
March 31, 2025		88,631
Total lease payments		325,370
Less: discount		(35,184	)
Total operating lease liabilities	$	290,186

The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use asset as of March 31, 2022.

Weighted average lease term (years)	2.6
Weighted average discount rate	8.0	%

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2022

(unaudited)