Lease commitment

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Lease commitment

20. Lease commitment

Effective December 31, 2018, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component.

The Company had a land, facilities and factory lease agreement with a 5-year lease term starting in April 2018 until April 2023. Upon adoption of ASU 2016-02, the Company recognized lease liabilities of approximately $0.82 million, with corresponding Right-of-Use (ROU) assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 4.75%, which is determined using an incremental borrowing rate.

The weighted average remaining lease term of its existing leases is 0.83 years.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For the six months ended June 30, 2022 and 2021, rent expenses amounted to 220,056 and $220,854 respectively.

The five-year maturity of the Company’s lease obligations is presented below:

Twelve months ended December 31,	Operating lease amount
2022		220,056
2023		146,704
Total lease payment		366,761
Less: interest		(157,171	)
Present value of lease liabilities	$	209,590