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Lease | 12 Months Ended
--- | ---
Dec. 31, 2021
Lease Disclosure [Abstract] |
Lease | 10. Lease
(a) | Prepaid land use rights
|  | Prepaid land lease payments |
Balance as of January 1, 2020 |  | $ | 7,194,195 |
Amortization charge for the year |  |  | (162,763 | )
Foreign exchange adjustment |  |  | 469,348 |
Balance as of December 31, 2020 |  |  | 7,500,780 |
Addition for the year |  |  | 6,188,764 |
Amortization charge for the year |  |  | (189,044 | )
Foreign exchange adjustment |  |  | 296,730 |
Balance as of December 31, 2021 |  | $ | 13,797,230 |
In August 2014 and November 2021, the Group acquired land use rights to build a factory of the Company in Dalian and Zhejiang, PRC. Lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 36 to 50 years, and no ongoing payments will be made under the terms of these land leases. No impairment loss was made to the carrying amounts of the prepaid land use right for the year ended December 31, 2020 and 2021.
(b) | Company as Lessor
The Company derives a portion of its revenue from leasing arrangements of these vehicles to end users. Such arrangements provide for monthly payments covering the vehicles sales and interest. These arrangements meet the criteria to be accounted for as sales-type leases. Accordingly, vehicle sale net of cost is recorded as other income and recognized upon delivery of the vehicle and its acceptance by the end user. Upon the recognition of such revenue, an asset is established for the investment in sales-type leases. Interests are recognized monthly over the lease term. The components of the net investment in sales-type leases as of December 31, 2020 and 2021 are as follows:
|  | December 31, |  |  | December 31, |
|  | 2020 |  |  | 2021 |
Total future minimum lease payments receivable |  | $ | 1,210,305 |  |  |  | 1,737,817 |
Less: unearned income, representing interest |  |  | (124,653 | ) |  |  | (108,773 | )
Present value of minimum lease payments receivables |  |  | 1,085,652 |  |  |  | 1,629,044 |
Less: Current portion |  |  | (235,245 | ) |  |  | (790,516 | )
Non-current portion |  | $ | 850,407 |  |  |  | 838,528 |
Vehicle sale net of cost recognized in other income (expense) from vehicle leasing was $(410,774) and $(92,272) for the year ended December 31, 2020 and 2021, respectively. Interest income from vehicle leasing was $13,106 and $99,424 for the year ended December 31, 2020 and 2021, respectively. The future minimum lease payments receivable for sales type leases are as follows:
Fiscal years ending December |  | Total Minimum Lease Payments to be Received |  |  | Amortization of Unearned Income |  |  | Net Investment in Sales Type Leases |
2022 |  | $ | 862,929 |  |  | $ | 72,413 |  |  | $ | 790,516 |
2023 |  |  | 683,546 |  |  |  | 33,589 |  |  |  | 649,957 |
2024 |  |  | 191,342 |  |  |  | 2,771 |  |  |  | 188,571 |
2025 |  |  | - |  |  |  | - |  |  |  | - |
2026 |  |  | - |  |  |  | - |  |  |  | - |
Thereafter |  |  | - |  |  |  | - |  |  |  | - |
|  |  | 1,737,817 |  |  |  | 108,773 |  |  |  | 1,629,044 |
(c) | Operating lease
In April 2018, Hitrans entered into a lease agreement for staff quarters spaces in Zhejiang with a five year term, commencing on May 1, 2018 and expiring on April 30, 2023. The monthly rental payment is approximately RMB18,000 ($2,832) per month. In 2018, lump sum payments were made to landlord for the rental of staff quarter spaces and no ongoing payments will be made under the terms of these leases. On January 14, 2021, Nanjing Daxin entered into a lease agreement for manufacturing, warehouse and office space in Tianjing with a three year term, commencing on March 1, 2021 and expiring on February 29, 2024. The monthly rental payment is approximately RMB73,143 ($11,509) per month. On April 6, 2021, Nanjing CBAK entered into a lease agreement for warehouse space in Nanjing with a three year term, commencing on April 15, 2021 and expiring on April 14, 2024. The monthly rental payment is approximately RMB97,743 ($15,380) per month. On June 1, 2021, Nanjing Daxin entered into a lease agreement for manufacturing, warehouse and office space in Wuxi with a three year term, commencing on June 1, 2021 and expiring on May 31, 2024. The monthly rental payment is approximately RMB238,095 ($37,465) per month for the first year and approximately RMB277,778 ($43,709) per month from the second year. On June 1, 2021, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and oxygen, commencing on July 1, 2021. The monthly rental payment is app roximately RMB5,310 ($836) per month. On December 9, 2021, Hitrans entered into a lease agreement for another staff quarters spaces in Zhejiang with a three year term, commencing on December 10, 2021 and expiring on December 9, 2024. The monthly rental payment is approximately RMB9,905 ($1,559) per month for the first year, RMB10,103 ($1,590) and RMB10,305 ($1,622) per month from the second year and third year, respectively. Operating lease expenses for the years ended December 31, 2020 and 2021 for the capitation agreement was as follows:
|  | December 31, 2020 |  |  | December 31, 2021 |
Operating lease cost – straight line |  | $ | - |  |  | $ | 477,569 |
Total lease expense |  | $ | - |  |  | $ | 477,569 |
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021:
|  | Operating leases |
Fiscal years ending December |  |  |
2022 |  | $ | 876,291 |
2023 |  |  | 876,672 |
2024 |  |  | 10,027 |
2025 |  |  | 10,027 |
2026 |  |  | 5,012 |
Thereafter |  |  | - |
Total undiscounted cash flows |  |  | 1,778,029 |
Less: imputed interest |  |  | (99,909 | )
Present value of lease liabilities |  | $ | 1,678,120 |
Lease term and discount rate:
|  | December 31, 2020 |  |  | December 31, 2021 |
Weighted-average remaining lease term |  |  |  |  |  |
Land use rights |  |  | 43 |  |  |  | 38.4 |
Operating leases |  |  | - |  |  |  | 2.32 |
Weighted-average discount rate |  |  |  |  |  |  |  |
Land use rights |  |  | Nil |  |  |  | Nil |
Operating leases |  |  | - |  |  |  | 5.88 | %

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