RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

9 Months Ended

Sep. 30, 2021

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

NOTE 12 – RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

The Company has the following operating leases:

Office lease located in Unit 605, 6th Floor, Building 5, No. 1 Hang Feng Road, Beijing in the PRC (annual payment of approximately $160,000) that will expire on March 30, 2022.

Office lease located in Unit 1206, 12th Floor, Building 5, No.1 Hang Feng Rd, Beijing in the PRC (annual payment of approximately $93,000) that will expire on July 20, 2022.

These lease agreements do not contain any material residual value guarantees or material restrictive covenants, and they do not contain options to extend at the time of expiration.

Upon the adoption of ASU 2016-02 on July 1, 2020, the Company recognized lease liabilities of approximately $477,600, with corresponding right-of-use (“ROU”) assets of the same amount based on the present value of the future minimum rental payments of the lease, using an incremental a borrowing rate of 4.35% to 4.57% based on the duration of the lease terms.

The maturity schedule of the Company’s lease liabilities is as follows:

Schedule of lease maturity
Twelve months ending September 30,	Amount
2022	$	39,470
Total lease payments		39,470
Less: imputed interest		418
Less: amount prepaid		–
Present value of lease liabilities	$	39,052

Total lease expenses for the three and nine months ended September 30, 2021, were approximately $61,000 and $184,000, respectively.

Hanjiao Group, Inc. 10-Q