Operating Leases

6 Months Ended

Jan. 31, 2024

Operating Leases [Abstract]

OPERATING LEASES

NOTE 8 – OPERATING LEASES

The Company leases offices spaces and a car under non-cancelable operating leases, with lease terms ranging between 14 months to 60 months. Among the lease agreements, one office space agreement was entered into with a related party (Note 11). The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Rent expense for the three months ended January 31, 2024 and 2023 was $120,692 and $130,169, respectively. Rent expense for the six months ended January 31, 2024 and 2023 was $246,371 and $250,861, respectively. During the three and six months ended January 31, 2024, the Company early terminated a car lease arrangement, and recognized losses of $62,282 arising from early termination in the condensed consolidated statements of operations comprehensive (loss) income. The losses of $62,282 was comprised of $7,600 arising from the derecognition of operating right-of-use assets and operating lease liabilities, and $$54,682 arising from penalties.

Effective August 1, 2019, the Company adopted the new lease accounting standard using a modified retrospective transition method, which allows the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the package of practical expedients, which allows the Company to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities as disclosed below. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.

The following table presents the operating lease related assets and liabilities recorded on the balance sheets as of January 31, 204 and July 31, 2023. 

	January 31, 2024		July 31, 2023
	(unaudited)
Right-of- use assets, net	$	756,012	$	1,058,822
Operating lease liabilities, current		289,952		415,411
Operating lease liabilities, noncurrent		528,155		689,498
Total operating lease liabilities	$	818,107	$	1,104,909

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of January 31, 2024 and July 31, 2023:

	January 31, 2024			July 31, 2023
	(unaudited)
Remaining lease term and discount rate
Weighted average remaining lease term (years)		3.25			3.35
Weighted average discount rate		4.90	%		4.90	%

The following is a schedule of maturities of lease liabilities as of January 31, 2024 and July 31, 2023:

	January 31, 2024			July 31, 2023
	(unaudited)
For the six months/twelve months ended July 31, 2024	$	201,495		$	457,708
For the twelve months ended July 31, 2025		240,000			267,239
For the twelve months ended July 31, 2026		240,000			267,239
For the twelve months ended July 31, 2027		200,000			204,540
Total lease payments		881,495			1,196,726
Less: imputed interest		(63,388	)		(91,817	)
Present value of lease liabilities	$	818,107		$	1,104,909