XML 22 R12.htm IDEA: XBRL DOCUMENT

Leases

6 Months Ended

Dec. 31, 2024

6 — LEASES

As of June 30, 2024 and December 31, 2024, Zhibao China Group leases office spaces in different cities in the PRC under non-cancelable operating leases, with terms ranging between 24 months and 60 months. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of the incremental borrowing rate.

For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. The Company records the straight-line lease expense and any contingent rent, if applicable, in general and administrative expenses on the unaudited condensed consolidated statements of operations and comprehensive loss. The corporate office lease also requires the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in the general and administrative expenses on the unaudited condensed consolidated statements of operations and comprehensive loss.

The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For short-term leases, the Company records operating lease expense in its consolidated statements of operations and comprehensive income on a straight-line basis over the lease term and record variable lease payments as incurred.

The table below presents the operating lease related assets and liabilities recorded on the consolidated balance sheets.

	June 30, 2024		December 31, 2024
	RMB		RMB
Right of use assets		3,313,215		5,885,455

Operating lease liabilities, current		2,425,135		2,537,123
Operating lease liabilities, noncurrent		1,044,068		3,427,331
Total operating lease liabilities		3,469,203		5,964,454

Other information about the Company’s leases is as follows:

	For the Six Months Ended
	2023			2024
	RMB			RMB
Operating cash flows used in operating leases		1,077,983			1,165,849
Weighted average remaining lease term (years)		1.69			2.59
Weighted average discount rate		4.55	%		3.74	%

Operating lease expenses were RMB 1,175,294 and RMB 1,303,514 (US$178,581), respectively, for the six months ended December 31, 2023 and 2024. RMB 62,545 and RMB 149,019 (US$20,416) were incurred for short-term lease arrangements for the six months ended December 31, 2023 and 2024, respectively.

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2024:

	December 31, 2024
	RMB
For the six months ending June 30, 2025		1,336,435
For the year ending June 30, 2026		2,365,790
For the year ending June 30, 2027		1,936,012
For the year ending June 30, 2028		427,745
Total lease payments		6,065,982
Less: Imputed interest		(101,528	)
Present value of lease liabilities		5,964,454