Note 8 – Land Use Rights, Net

 

On December 23, 2024, the Company entered into a contract with the Natural Resources and Planning Bureau of Lingshui Li Autonomous County (“Assignor”) for the assignment of approximately 3.2 acres of land owned by The People’s Republic of China (“PRC”). Under the terms of the contract, the Company paid a deposit of 16,230,000 RMB, or approximately $2.2 million (USD) on that date, with the remaining balance of 11,270,000 RMB, or approximately $1.7 million (USD) paid on April 22, 2025, when the land was delivered with all necessary pipelines laid in place. The Company is in the early stages of the design and construction of an esports and other entertainment venue on this land, which is located in Hainan, an island province in southern China. Land use rights are recognized at cost less accumulated amortization. According to the Chinese laws and regulations regarding land use rights, land is owned by the state. However, in accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants the user a “land use right” to use the land. The Company has the right to use the land for 40 years and amortizes the rights on a straight-line basis over that period.

 

The land use rights, net consisted of the following at: