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RIGHT-OF-USE ASSETS
 12 Months Ended
Dec. 31, 2023
Right-of-use Assets  
RIGHT-OF-USE ASSETS

11. RIGHT-OF-USE ASSETS

 

The Company leases office and restaurant premises under non-cancelable operating lease agreements, with an option to renew the leases. Per the new lease standard ASC 842-10-55, these leases are treated as operating leases. Management determined the loan interest rate of 4.75% is the weighted average discount rate for the lease that began in 2018. The rental expense for the years ended December 31, 2023, 2022 and 2021 was $110,130, $96,356 and $315,516, respectively. All leases are on a fixed payment basis. None of the leases include contingent rentals.

 

Rights-of-use assets, net consisted of the following:

 

   December 31,   December 31, 
   2023   2022 
Leased properties under operating lease  $293,991    337,084 
Less: accumulated amortization   (174,935)   (109,481)
Right-of-use assets  $119,056    227,603 

 

The Company does not have any variable lease costs. Cash payment made under the lease agreements is $113,981, $80,045 and $329,952 for the years ended December 31, 2023, 2022 and 2020, respectively. The weighted-average remaining lease term is 1.16 and 2.17 years as of December 31, 2023 and 2022. Interest expense was $9,303, $9,631 and $22,320 for the years ended December 31,2023,2022 and 2021 respectively.

 

Future lease commitments

 

      
2024  $123,438 
2025   20,733 
Total Lease Payments  $144,171 
 Less: imputed interest 　  $(4,124)
Present value of lease liabilities 　  $140,047 
Lease liabilities - Current  $119,434 
Lease liabilities – Non current   20,613 

 

Amortization expense was recognized as lease expense in general and administrative expense. Non-cash portion of amortization expense was $102,322, $278,957 and $14,436 for the years ended December 31, 2023, 2022 and 2021, respectively.

 

The estimated amortization expenses for each of the five succeeding years is as follows:

 

Year ending December 31,  Amortization expense 
2024   102,048 
2025   17,008 
Total  $119,056 

 

On February 23, 2022, Shenzhen Bao’an Industrial Investment Group Co., Ltd(“Bao’an Industrial Investment”) entered a lease with Meiwu Shenzhen to lease our executive offices to us for a lease term from March 1, 2022 to February 28, 2025, at a monthly net rent of RMB49,743.65 (approximately, $7,802) from March 1, 2022 to February 28, 2023, a monthly net rent of RMB52,230.83 (approximately, $8,192) from March 1, 2023 to February 29, 2024 and a monthly net rent of RMB54,844.64 (approximately, $8,602) from March 1, 2024 to February 28, 2025.

 

 

MEIWU TECHNOLOGY COMPANY LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS