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Operating Leases

6 Months Ended

Jun. 30, 2020

NOTE 4 - OPERATING LEASES

The Company has two separate operating lease agreements for one office space in each of Malaysia and Hong Kong with remaining lease terms of 9 months and 10 months, respectively. The Company does not have any other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

	Six Months Ended June 30, 2020
Lease Cost
Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed statement of operations)	$	172,030

Other Information
Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2020	$	86,994
Weighted average remaining lease term – operating leases (in years)		0.8
Average discount rate – operating leases		4.0	%

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

	At June 30, 2020
Operating leases
Long-term right-of-use assets	$	210,765

Short-term operating lease liabilities	$	215,372
Long-term operating lease liabilities		-
Total operating lease liabilities	$	215,372

Maturities of the Company’s lease liabilities are as follows (in thousands):

Year Ending	Operating Leases
2020 (remaining 6 months)	$	131,604
2021		87,736
Total lease payments		219,340
Less: Imputed interest/present value discount		(3,968	)
Present value of lease liabilities	$	215,372

Lease expenses were $71,303 and $172,030 during the three and six months ended June 30, 2020, respectively, and $101,313 and $199,243 during the three and six months ended June 30, 2019, respectively.

During the six months ended June 30, 2020, the Company terminated one lease and a second lease was deconsolidated when the Company sold its controlling interest in a subsidiary (See Note 8). The total operating lease right-of-use assets and liabilities removed from the Company’s financial statements were approximately $159,000.