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Operating Lease

9 Months Ended

Sep. 30, 2020

9. OPERATING LEASE

In August 2020, the Company signed an operating lease agreement for its office in Beijing. The Company recognized operating lease liabilities and operating lease right-of-use assets on its balance sheets. Right of use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Right of use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The company has leases with fixed payments for office rental in Beijing, which are classified as operating leases. Options to extend or renew are recognized as part of the lease liabilities and recognized as right of use assets. There are no residual value guarantees and no restrictions or covenants imposed by the leases.

The weighted average remaining lease term is 2 years and the weighted average discount rate is 6%.

In the nine months ended September 30, 2020, the costs of the leases recognized in general administrative expenses are $13,000. Cash paid for the operating leases including in the operating cash flows was $15,038.

Future minimum lease payments for leases with initial or remaining noncancelable lease terms in excess of one year are as follows:

Year ending December 31, (In thousands of U.S. Dollars)
2020	$	32
2021		164
2022		109
	$	305