7. LEASES

9 Months Ended

May 31, 2014

NOTE 7. LEASES

The Company leases the office under an eight-year operating lease from an unrelated third party, expiring on June 30, 2017. This lease provides for renewal option. This lease requires the Company to pay the total rent in advance for one year of $43,006 (RMB 264,000).

The minimum future rentals under this lease as of May 31, 2014 are as follows:

Period Ending
August 31,		Amount

	2014	$	7,168
	2015		43,006
	2016		43,006
	2017		35,838
		$	129,018

The Company had an operating lease for another office at a monthly rent of approximately $1,439 that expired on April 22, 2014 and was not renewed.

Rent expense for the three months ended May 31, 2014 and 2013 was $12,127 and $11,799, respectively, and for the nine months ended May 31, 2014 and 2013 was $42,271 and $40,352, respectively.

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

China Tianfeihong Wine Inc 10-Q