COMMITMENTS AND CONTINGENCIES

6 Months Ended

Feb. 28, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES

During the period ended February 28, 2023, the Company entered into month-to-month lease agreements with independent third parties to rent office and staff quarter premises in Taiwan, Shenzhen, Beijing and Hong Kong. The rental expense for the six months ended February 28, 2023 and 2022 were $130,646 and $148,477 respectively; and $64,964 and $59,758 for the three months ended February 28, 2023 and 2022 respectively.

The components of lease costs, lease term and discount rate with respect of leases with an initial term of at least 12 months are as follows:

	For the six months ended
	February 28, 2023			February 28, 2022
Operating lease cost – classified as general and administrative expenses	$	123,169		$	176,635
Weighted Average Remaining Lease Term – Operating leases		1.20 years			1.43 years
Weighted Average Discounting Rate – Operating leases		5.42	%		5.42	%

The following is a schedule, by years, of maturities of lease liabilities as of February 28, 2023:

	Operating leases
2023 (remaining period)	$	49,100
2024		42,472
2025		6,300
2026		-
2027		-
Thereafter		-
Total undiscounted cash flows		97,872
Less: imputed interest		(3,097	)
Present value of lease liabilities	$	94,775

Contingencies

The Labor Contract Law of the People’s Republic of China requires employers to assure the liability of the severance payments if employees are terminated due to restructuring, mutual agreement or expiration of a fixed-term labor contract. The Company has estimated its possible severance payments of approximately $72,000 and $146,000 as of February 28, 2023 and August 31, 2022, respectively. On February 28, 2023, the Company dismissed ten employees and severance payments of $129,572 (RMB907,000) were incurred. The compensation was payable in the form of cash of $36,930 (RMB258,500) and 926,429 restricted shares of the Company. The fair value of the shares of restricted common stock was $92,642, which was calculated based on a price per share of $0.10.The shares will be issued by August 31, 2023.

In Taiwan, an employer can terminate an employment contract with notice (or with pay in lieu of notice) and with severance pay only due to stoppage of business or a transfer of ownership, business losses or curtailment of business operations, suspension of operations due to a force majeure event, or alteration of the business nature, forcing a reduction in the number of employees, and those employees cannot be reassigned to other suitable positions, or the employee is incapable of performing the tasks assigned. The Company has estimated its possible severance payments of approximately $40,000 and $52,000 as of February 28, 2023 and August 31, 2022, respectively, which have not been reflected in its condensed consolidated financial statements, because it is more likely than not that this will not be paid or incurred.