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Leases

12 Months Ended

Jun. 30, 2025

NOTE 8 — LEASES

The Company has multiple lease agreements for warehouses, warehouse machinery and equipment and offices. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company entered into three new operating lease agreements for the year ended June 30, 2025. The ROU asset was recognized at the discount rate of 10.25% for one lease with a lease term of 1.6 years in the U.S., of 4.42% for another lease with a lease term of 2 years in China, and of 4.42% for another lease with a lease term of 5 years in China, resulting in a total of $1,451,938 on the commencement date.

For the year ended June 30, 2025, the Company entered into two new finance lease agreements for the year ended June 30, 2025. The ROU asset was recognized at the discount rate of 9.75% and 10.75% respectively for two leases with the lease term of 5 years and 5 years respectively in the U.S., resulting in a total of $89,003 on the commencement date.

Total operating lease expenses on offices, warehouses, and warehouse equipment for the years ended June 30, 2025 and 2024 were $2,042,946 and $1,005,686, respectively.

Total finance lease expenses on warehouse machinery and equipment for the years ended June 30, 2025 and 2024 were $38,540 and $32,525, respectively. Depreciation of finance lease right-of-use assets were $32,681 and $30,712 for the years ended June 30, 2025 and 2024, respectively.

The following table includes supplemental cash flow and non-cash information related to leases:

	For the years ended,
	2025		2024
Cash paid of amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,540,032	$	846,992
Operating cash flows from finance leases	$	5,859	$	1,813
Financing cash flows from finance leases	$	30,779	$	29,628
Right-of-use assets obtained in exchange for lease obligations:
Finance lease liabilities	$	89,003	$	19,982
Operating lease liabilities	$	1,451,938	$	2,094,498

The weighted average remaining lease terms and discount rates for all of operating lease and finance leases is as follows:

	June 30, 2025			June 30, 2024
Weighted-average remaining lease term (years):
Operating lease		2.44 years			3.05 years
Finance lease		3.19 years			1.31 years

Weighted average discount rate:
Operating lease		7.00	%		6.30	%
Finance lease		9.32	%		6.51	%

The following is a schedule of maturities of operating and finance lease liabilities as of June 30, 2025:

Operating leases

Twelve months ending June 30,	Repayment
2026	$	2,500,558
2027		574,730
2028		594,275
2029		567,260
2030		22,823
Total future minimum lease payments		4,259,646
Less: imputed interest		(376,574	)
Total operating lease liabilities	$	3,883,072

Financing leases

Twelve months ending June 30,	Repayment
2026	$	53,409
2027		24,810
2028		21,656
2029		21,656
2030		7,219
Total future minimum lease payments		128,750
Less: imputed interest		(15,448	)
Total finance lease liabilities	$	113,302