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Leases

9 Months Ended

Sep. 30, 2024

NOTE 10 - LEASES

The Company has leases for certain office and production facilities in the PRC which are classified as operating leases. The leases contain payment terms for fixed amounts. Options to extend are recognized as part of the lease liabilities and recognized as right of use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases. The discount rate used in measuring the lease liabilities and right of use assets was determined by reviewing the Company’s incremental borrowing rate at the initial measurement date. For the three months ended September 30, 2024 and 2023, operating lease cost was $20,302 and $19,413, respectively and cash paid for amounts included in the measurement of lease liabilities for operating cash flows from operating leases was $21,061 and $20,142, respectively. For the nine months ended September 30, 2024 and 2023, operating lease cost was $58,931 and $57,048, respectively and cash paid for amounts included in the measurement of lease liabilities for operating cash flows from operating leases was $61,135 and $57,048, respectively. As of September 30, 2024 and December 31, 2023, the Company reported right of use assets of $58,931 and $116,610, respectively and lease liabilities of $60,241 and $117,637, respectively. As of September 30, 2024, its operating leases had a weighted average remaining lease term of 0.75 years and a weighted average discount rate of 3.55%.

Minimum lease payments for the Company’s operating lease liabilities were as follows for the twelve month period ended September 30:

2025	$	61,135
Total undiscounted cash flows		61,135
Less: Imputed interest		(894	)
		60,241
Less: Lease liabilities, current portion		(60,241	)
Lease liabilities, non current portion	$	-

The Company has leases with terms less than one year for certain provincial sales offices that are not material.