Note 11. COMMITMENTS AND CONTINGENCIES Lease Obligations The Company leases certain office premises and apartments for employees under various operating lease agreements with terms through May 17, 2021. Rental expenses for the three months ended March 31, 2019 and 2018 were $57,745 and $59,183, respectively. Rental expense for the nine months ended March 31, 2019 and 2018 were $170,778 and $178,490, respectively. Contractual Obligations: The Company entered into a contract to upgrade its ERP system. The total contract costs amounted to RMB 4,000,000, or approximately $596,000, and of which the Company made a deposit of $437,357 during the year ended June 30, 2018. The remaining balance will be settled upon the completion of services during fiscal year 2021. On June 22, 2018, the Company entered into a contract to improve its IT infrastructure. The total contract price for the services is $1.2 million and the Company paid a deposit of $1.0 million during the year ended June 30, 2018. The remaining $0.2 million will be paid upon completion of services during fiscal year 2020. Leases Contractual Total Twelve months ending March 31, 2020 $ 148,329 $ 200,000 $ 348,329 2021 41,474 158,643 200,117 2022 5,089 - 5,089 $ 194,892 $ 358,643 $ 553,535 Contingencies The Labor Contract Law of the PRC requires employers to insure the liability of severance payments for terminated employees that have worked for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month for severance pay for each year of the service provided by the employees. As of March 31, 2019 and June 30, 2018, the Company has estimated its severance payments of $78,000 and $59,000, respectively, which have not been reflected in its unaudited condensed consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future. Sino-Global has employment agreements with each of Mr. Lei Cao, Ms. Tuo Pan and Mr. Zhikang Huang. These employment agreements provide for five-year terms that extend automatically in the absence of termination provided at least 60 days prior to the anniversary date of the agreement. If the Company fails to provide this notice or if the Company wishes to terminate an employment agreement in the absence of cause, then the Company is obligated to provide at least 30 days prior notice. In such case during the initial term of the agreement, the Company would need to pay such executive (i) the remaining salary through the date of December 31, 2023, (ii) two times of the then applicable annual salary if there has been no Change in Control, as defined in the employment agreements or three-and-half times of the then applicable annual salary if there is a Change in Control. From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. The Company was named as a defendant in a breach of service contract lawsuit in the amount of $225,000 filed with the California Superior Court on January 19, 2018. The Company filed a motion with the court to force the plaintiff into arbitration rather than to litigate the dispute in court based on the arbitration provision in the contract. The California Superior Court approved its motion to stay the case pending the resolution of the arbitration and has scheduled a further status conference for June 4, 2019 to get another update about the status of the arbitration. In Indianapolis, this matter has been agreed to settle in exchange for 40,000 restrictive shares of common stock of the Company to the plaintiff, pending the execution of a settlement agreement. As a result of the anticipated settlement, the arbitration in Indianapolis is dismissed and the litigation in California is expected to be dismissed. The Company estimates the accrued liability to be approximately $35,000 and believes it will not likely have a material effect on the Companys unaudited condensed consolidated operations or financial position.