| LEASES |
9. LEASES
The Company entered into commercial
operating leases with various third parties for the use of leasehold land in Hong Kong. These leases have original terms ranging
from 6 to 12 years. These operating leases are included in “Right-of-use Assets” on the consolidated balance sheets and
represent the Company’s right to use the underlying assets during the lease term. The Company’s obligation to make lease
payments are included in “Lease liabilities” on the consolidated balance sheets.
Supplemental balance sheet information related
to operating leases was as follows:
| Schedule of supplemental balance sheet information | |
|
|
|
|
|
| |
| | |
As of | |
| | |
December 31, 2025 | | |
December 31, 2024 | |
| Operating lease: | |
| | | |
| | |
| Right-of-use assets, net | |
$ | 1,609,832 | | |
$ | 1,244,794 | |
| | |
| | | |
| | |
| Lease liabilities: | |
| | | |
| | |
| Current lease liabilities | |
$ | 125,624 | | |
$ | 97,857 | |
| Non-current lease liabilities | |
| 1,616,932 | | |
| 1,254,618 | |
| | |
| | | |
| | |
| Total lease liabilities | |
$ | 1,742,556 | | |
$ | 1,352,475 | |
Operating lease expense for the years ended December
31, 2025 and 2024 was $126,319 and $119,356, respectively.
Supplemental consolidated and combined cash flow
statement information related to leases:
| Schedule of supplemental consolidated and combined cash flow | |
| | |
| |
| | |
As of | |
| | |
December 31, 2025 | | |
December 31, 2024 | |
| Cash paid for amounts included in the measurement of lease liabilities: | |
| | |
| |
| Operating cash flows from operating lease | |
$ | 180,106 | | |
$ | 169,231 | |
| | |
| | | |
| | |
| Right-of-use assets obtained in exchange for lease obligations (non-cash): | |
| | | |
| | |
| Operating lease | |
$ | 729,256 | | |
$ | – | |
Other supplemental information about the Company’s
operating lease as of:
| Schedule of other supplemental information | |
| | |
| |
| | |
December 31, 2025 | | |
December 31, 2024 | |
| Weighted average discount rate | |
| 5.54% | | |
| 5.75% | |
| Weighted average remaining lease term (years) | |
| 7.13 | | |
| 10.88 | |
Operating lease commitments:
The following table summarizes the future minimum
lease payments due under the Company’s operating leases in the next five years, as of December 31, 2025:
| Schedule of future minimum lease payments | |
| | |
| |
| Year ending December 31, | |
| | |
| |
| 2026 | |
$ | 218,234 | | |
$ | 173,073 | |
| 2027 | |
| 218,234 | | |
| 173,073 | |
| 2028 | |
| 219,515 | | |
| 173,073 | |
| 2029 | |
| 218,234 | | |
| 173,073 | |
| 2030 | |
| 207,476 | | |
| 165,346 | |
| Thereafter | |
| 1,226,131 | | |
| 965,807 | |
| Total minimum finance lease liabilities payment | |
| 2,307,824 | | |
| 1,823,445 | |
| Less: imputed interest | |
| (565,268 | ) | |
| (470,970 | ) |
| | |
| | | |
| | |
| Future minimum lease liabilities | |
$ | 1,742,556 | | |
$ | 1,352,475 | |
|