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Lease

6 Months Ended

Jun. 30, 2024

15. LEASE

On November 20, 2017, Xi’an TCH entered into a lease for its office from December 1, 2017 through November 30, 2020. The monthly rent was RMB 36,536 ($5,600) with quarterly payment in advance. This lease expired in November 2020. The Company entered a new lease for the same location from January 1, 2021 through December 31, 2023 with monthly rent of RMB 36,536 ($5,600), to be paid every half year in advance. Upon expiration of the lease, the Company entered a new lease agreement for the same location from January 1, 2024 through December 31, 2026 with monthly rent of RMB 36,536 ($5,600), to be paid every half year in advance.

The Company’s operating ROU assets and lease liabilities were as follows:

	June 30, 2024		December 31, 2023

Right-of-use assets, net	$	152,357	$	-

Current operating lease liabilities		61,520		-
Non-current operating lease liabilities		90,837		-
Total lease liabilities	$	152,357	$	-

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:

	Six Months Ended
	June 30, 2024
Operating lease cost – amortization of operating lease right-of-use asset	$	30,167
Operating lease cost – interest expense on lease liability	$	687
Weighted Average Remaining Lease Term - Operating leases		2.50
Weighted Average Discount Rate - Operating leases		5	%

	Six Months Ended
	June 30, 2023
Operating lease cost – amortization of operating lease right-of-use asset	$	30,863
Operating lease cost – interest expense on lease liability	$	774
Weighted Average Remaining Lease Term - Operating leases		0.5
Weighted Average Discount Rate - Operating leases		5	%

	Three Months Ended
	June 30, 2024
Operating lease cost – amortization of operating lease right-of-use asset	$	15,095
Operating lease cost – interest expense on lease liability	$	327

	Three Months Ended
	June 30, 2023
Operating lease cost – amortization of operating lease right-of-use asset	$	15,245
Operating lease cost – interest expense on lease liability	$	385

The following is a schedule, by years, of maturities of the office lease liabilities as of June 30, 2024:

For the year ended June 30, 2025,	$	61,520
For the year ended June 30, 2026		61,520
For the year ended June 30, 2027		30,760
Total undiscounted cash flows		153,800
Less: imputed interest		(1,442	)
Present value of lease liabilities	$	152,358

Employment Agreement

On May 6, 2022, the Company entered another employment agreement with Mr. Shi for 24 months with monthly salary of RMB 18,000 ($2,500). The Company will grant the CFO no less than 5,000 shares of the Company’s common stock annually; however, as of this report date, the Board of Directors and Compensation Committee have not approved the number of shares to be given to the CFO, nor any stock reward agreement has been signed.

On May 6, 2024, the Company entered another employment agreement with Mr. Shi for 24 months with monthly salary of RMB 18,000 ($2,500). The Company will grant the CFO no less than 5,000 shares of the Company’s common stock annually; however, as of this report date, the Board of Directors and Compensation Committee have not approved the number of shares to be given to the CFO, nor any stock reward agreement has been signed.