XML 37 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments
 9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS

18. COMMITMENTS


Lease Commitment


On November 20, 2017, Xi’an TCH entered into a lease for its office with a term from December 1, 2017 through November 30, 2020. The monthly rent is RMB 36,536 ($5,600) with quarterly payment in advance.


For the nine months ended September 30, 2020 and 2019, the rental expense of the Company was $49,034 and $79,288 (including Beijing office rent of $28,888), respectively. 


For the three months ended September 30, 2020 and 2019, the rental expense of the Company was $16,532 and $26,221 (including Beijing office rent of $9,687), respectively. 


The Company adopted ASC 842 on CFS on January 1, 2019. The components of lease costs, lease term and discount rate with respect of the office lease with an initial term of more than 12 months are as follows:


   Nine Months Ended 
   September 30,
2020		 
Operating lease cost – amortization of ROU  $48,220 
Operating lease cost – interest expense on lease liability  $814 
Weighted Average Remaining Lease Term - Operating leases   0.17 years 
Weighted Average Discount Rate - Operating leases   3%

   Three Months
Ended		 
   September 30,
2020		 
Operating lease cost – amortization of ROU  $16,372 
Operating lease cost – interest expense on lease liability  $160 

Employment Agreement


On May 8, 2020, the Company entered an employment agreement with Yongjiang Shi, the Company’s CFO for a term of 24 months. The monthly salary is RMB 16,000 ($2,300). The Company will grant the CFO no less than 5,000 shares of the Company’s Common Stock annually. 


Investment Banking Engagement Agreement


On October 10, 2019, the Company entered an investment banking engagement agreement with an investment banker firm to engage them as the exclusive lead underwriter for a registered securities offering. The Company shall pay to the investment banker an equity retainer fee of 15,000 shares (post-reverse stock split) of the restricted Common Stock of the Company (10,000 shares was issued within 10 business days of signing the agreement, and remaining 5,000 shares will be paid upon completion of the offering). The proposed offering amount is $5 million, at closing of the offering, the Company will pay a 7% of the gross offering proceeds and warrants to purchase that number of shares of Common Stock or units of securities as shall equal 7% of the securities issued and sold by the Company at each closing of the offering. This agreement was renewed on July 22, 2020 for another six months, or the final closing of a transaction, whichever comes first.