v3.25.2
LEASES
 6 Months Ended
Jun. 30, 2025
Leases  
LEASES

NOTE 5 - LEASES

 

As of June 30, 2025, the Company has extended an operating lease agreement for one office space in Hong Kong, with a cancellable term of one year commencing from March 15, 2025, to March 14, 2026, after a non-cancellable term of two years expired on March 14, 2025, and has a finance lease for a motor vehicle in Malaysia, with a term of five years, respectively. Other than these leases, the Company does not have any other leases over the term of one year. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

 

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest (“discount rate”) in arrangements is not readily determinable, and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

 

The components of lease expense and supplemental cash flow information related to operating leases and finance leases for the periods are as follows:

 

   2025   2024 
   Six Months Ended June 30, 
   2025   2024 
   (Unaudited)   (Unaudited) 
Lease costs          
Operating lease costs:          
Rental expenses (1)  $48,853   $48,720 
Other rental expenses (2)   7,667    8,160 
 Total operating lease costs    56,520    56,880 
Finance lease costs:          
Interest expenses  $466   $544 
Total finance lease costs   466    544 
Total lease costs  $56,986   $57,424 
           
Other information          
Cash paid for amounts included in the measurement of lease liabilities:          
Rental payment - operating leases  $48,853   $48,720 
Interest repayment - finance leases   466    457 
Principal repayment - finance leases   1,899    1,357 
Total cash paid  $51,218   $50,534 
Non-cash activity:          
Balance payment of ROU asset by finance lease liabilities  $12,894   $14,964 
Weighted average remaining lease term (in years):          
Operating leases   0.70    0.70 
Finance leases   2.92    3.92 
Weighted average discount rate:          
Operating leases   4.0%   4.0%
Finance leases   6.9%   6.9%

 

(1) Rental expenses include amortization of $47,582 and $46,821 and interest expenses of $1,271 and $1,899 during the six months ended June 30, 2025, and 2024, respectively.
   
(2) Other rental expenses represent those rental expenses for leases with a lease term within one year, and government rent and rates related to the leases.

 

 

The supplemental balance-sheet information related to leases for the periods is as follows:

 

   As of
June 30, 2025		   As of
December 31, 2024		 
   (Unaudited)   (Audited) 
Assets          
Long-term operating lease ROU assets, net (1)  $67,304   $19,929 
Long-term finance lease ROU asset, net (2)   18,364    20,272 
Total ROU assets  $85,668   $40,201 
           
Liabilities          
Current portion of operating lease liabilities  $67,304   $19,929 
Current portion of finance lease liabilities   4,135    3,766 
Total current lease liabilities   71,439    23,695 
           
Long-term finance lease liabilities   8,759    10,235 
Total long-term lease liabilities   8,759    10,235 
Total lease liabilities  $80,198   $33,930 

 

(1) Operating lease ROU assets are measured at cost of $446,684 and $351,829, net of accumulated amortization of $379,380 and $331,900 as of June 30, 2025, and December 31, 2024 respectively.
   
(2) Finance lease ROU assets are measured at cost of $28,898, net of accumulated amortization of $10,534 and $8,626 as of June 30, 2025 and December 31, 2024, respectively.

 

Maturities of the Company’s lease liabilities as of June 30, 2025, are as follows:

 

   Operating leases   Finance leases 
   (Unaudited)   (Unaudited) 
Year ending December 31,          
2025 (remaining 6 months)   48,534    2,445 
2026   19,831    4,891 
2027   -    4,891 
2028   -    2,035 
Total future minimum lease payments   68,365    14,262 
Less: Imputed interest/present value discount   (1,061)   (1,368)
Present value of lease liabilities  $67,304   $12,894 
           
Lease obligations          
Current lease obligations  $67,304   $4,135 
Long-term lease obligations   -    8,759 
Total lease obligations  $67,304   $12,894 

 

For the three months ended June 30, 2025, total lease costs were $28,096, including operating lease costs of $27,866 and finance lease costs of $230. For the three months ended June 30, 2024, total lease costs were $28,033, including operating lease costs of $27,768 and finance lease costs of $265.

 

For the six months ended June 30, 2025, total lease costs were $56,986, including operating lease costs of $56,520 and finance lease costs of $466. For the six months ended June 30, 2024, total lease costs were $57,424, including operating lease costs of $56,880 and finance lease costs of $544.