Note 7 - Investment Properties

6 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Investment Property In China [Text Block]

7.   INVESTMENT PROPERTIES

The following table presents the Company’s investment in properties in China as of December 31, 2022. The exchange rate is based on the market rate as of December 31, 2022.

	Investment Date / Reclassification	Investment Amount			Investment Amount
	Date	(RMB)			(U.S. Dollars)
Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894
Currency translation			-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301
			2,024			301
Purchase of rental property – Property II - JiangHuai	Jan 06, 2010		3,600			580
Purchase of rental property – Property III - FuLi	Apr 08, 2010		4,025			648
Currency translation			-			(130	)
Gross investment in rental property			9,649			1,399
Accumulated depreciation on rental property	Dec 31, 2022		(7,764	)		(1,133	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)
			(5,971	)		(866	)
Net investment in property – China			3,678			533

The following table presents the Company’s investment in properties in China as of June 30, 2022. The exchange rate is based on the market rate as of June 30, 2022.

	Investment Date / Reclassification	Investment Amount			Investment Amount
	Date	(RMB)			(U.S. Dollars)
Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894
Currency translation			-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301
			2,024			301
Purchase of rental property – Property II - JiangHuai	Jan 06, 2010		3,600			580
Purchase of rental property – Property III - FuLi	Apr 08, 2010		4,025			648
Currency translation			-			(89	)
Gross investment in rental property			9,649			1,440
Accumulated depreciation on rental property	Jun 30, 2022		(7,523	)		(1,122	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)
			(5,730	)		(855	)
Net investment in property – China			3,919			585

Rental Property I - MaoYe Property

In the fiscal year ended June 30, 2008, TTCQ purchased an office in Chongqing, China from MaoYe Property Ltd. (“MaoYe”) for a total cash purchase price of RMB 5,554, or approximately $894. During the year ended June 30, 2019, the Company sold thirteen of the fifteen units constituting the MaoYe Property. Management has decided not to sell the remaining two units of MaoYe properties in the near future, due to current conditions of the property market in China. The lease agreement, which was entered into on February 10, 2022 has been terminated on October 2022. A new agreement has been secured and will be effective from February 1, 2023 for a period of 4 years at a monthly rate of RMB15, or approximately $2, after termination of the previous agreement. Pursuant to the agreement, monthly rental will increase by 5% each year from third year onwards.

Property purchased from MaoYe generated a rental income of $2 and $8 during the three and six months ended December 31, 2022, as compared to $2 and $4 for the same period in Fiscal 2022.

Depreciation expense for MaoYe was $4 and $8 during the three and six months ended December 31, 2022, as compared to $4 and $8 for the same period in Fiscal 2022.

Rental Property II - JiangHuai

During the year ended June 30, 2010 (“Fiscal 2010”), TTCQ purchased eight units of commercial property in Chongqing, China from Chongqing JiangHuai Real Estate Development Co. Ltd. (“JiangHuai”) for a total purchase price of RMB 3,600, or approximately $580. As of December 31, 2022, TTCQ had not received the title deed for properties purchased from JiangHuai. While the above is not expected to affect the property’s market value, the COVID-19 pandemic and current economic situation is likely to cause delays in court to consummate the execution of the sale.

Property purchased from JiangHuai did not generate any rental income for the three and six months ended December 31, 2022 and 2021.

Depreciation expense for JiangHuai was $7 and $14 for the three and six months ended December 31, 2022, as compared to $7 and $14 for the same period in Fiscal 2022.

Rental Property III – FuLi

In Fiscal 2010, TTCQ entered into a Memorandum Agreement with Chongqing FuLi Real Estate Development Co. Ltd. (“FuLi”) to purchase two commercial properties totaling 311.99 square meters (“Office Space”) located in Jiang Bei District Chongqing. The total purchase price committed and paid was RMB 4,025, or approximately $648. The development was completed, the property was transferred to TTCQ in April 2013 and the title deed was received during the third quarter of Fiscal 2014.

As of mid August 2022, TTCQ had found a new tenant for one of the two commercial properties for a period of 1 year at a monthly rate of RMB6, or approximately $1. TTCQ is actively searching for tenants to occupy the other commercial property, which is vacant as of the date of this Report.

Properties purchased from FuLi generated a rental income of $2 and $4 for the three and six months ended December 31, 2022, as compared to $5 and $14 for the same period in Fiscal 2022.

Depreciation expense for FuLi was $7 and $15 for the three and six months ended December 31, 2022, as compared to $8 and $16 for the same period in Fiscal 2022.

Summary

Total rental income for all investment properties in China was $4 and $12 for the three and six months ended December 31, 2022, as compared to $8 and $19 for the same period in Fiscal 2022.

Depreciation expenses for all investment properties in China were $18 and $36 for the three and six months ended December 31, 2022, as compared to $19 and $38 for the same period in Fiscal 2022.