Leases

12 Months Ended

Jun. 30, 2026

Note 19 - Leases

On July 28, 2021, the Company entered into a Lease agreement (the “Lease Agreement”) with 9th & Vineyard, LLC, a Delaware limited liability company (the “Landlord”), to lease from the Landlord approximately 99,347 square feet of space located at 8798 9th Street, Rancho Cucamonga, California (the “Premises”). The term of the Lease Agreement is for 62 months, commencing on the date on which the Landlord completes certain prescribed improvements on the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew. Under the Lease Agreement, the Company is responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the Lease Agreement. In addition, following the Rent Commencement Date, the first two months of the Base Rent were abated.

The lease did not start under the original agreement as the construction was not completed. On February 23, 2022, the Company entered into an amended agreement to extend the lease term to 74 months. Under the amended agreement, the lease commenced on February 10, 2022, with rent payments commencing May 11, 2022 and the lease expiring on May 31, 2028. The base rental fee is $114,249, increasing gradually over time to $140,079 per month through the expiration date of May 31, 2028. On April 13, 2026, we entered into a sublease agreement (the “Sublease Agreement”) to sublease part of the warehouse for a term of 25 months, commencing May 1, 2026 and ending May 31, 2028. Pursuant to the Sublease Agreement, the sublessee will pay Base Rent of $62,500 to $112,710, calculated based on space used, to the Company monthly. For the year ended June 30, 2026, the Company recognized $168,750 of sublease income in other income.

On May 1, 2022, the Company leased another fulfillment center in Duarte, California. The base rental fee is $56,000 to $59,410 per month through April 30, 2025. The lease had been expired without renewal since May 1, 2025.


	For the Years Ended June 30,
	2026		2025
Lease cost
Operating lease cost (included in G&A in the Company’s statement of operations)	$	1,446,982	$	2,083,235
Short-term lease expenses		9,781		85,954

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	1,533,918	$	2,216,896
Remaining term in years		1.92		2.92
Average discount rate - operating leases		5%		5%

The supplemental balance sheet information related to leases for the years is as follows:


Operating leases	June 30, 2026		June 30, 2025
Right of use asset	$	2,641,366	$	3,915,539

Lease Liabilities – current		1,483,163		1,361,111
Lease Liabilities - non-current		1,430,806		2,913,967
Total operating lease liabilities	$	2,913,969	$	4,275,078

Maturities of the Company’s lease liabilities are as follows:


	Operating
	Lease
For Year ending June 30:
2027		1,586,572
2028		1,459,411
Less: Imputed interest/present value discount		(132,014	)
Present value of lease liabilities	$	2,913,969