Lease

3 Months Ended

Mar. 31, 2025

15. LEASE

On January 1, 2024, Xi’an TCH entered into a lease for its office from January 1, 2024 through December 31, 2026. The monthly rent was RMB36,536 ($5,600) with half-year payment in advance. This lease expired in December 31, 2026.

The Company’s operating ROU assets and lease liabilities were as follows:

	Year Ended		Year Ended
	March 31, 2025		December 31, 2024
Right-of-use assets, net	$	101,645	$	115,068
Current operating lease liabilities	$	59,384	$	58,529
Non-current operating lease liabilities		57,365		56,539
Total lease liabilities		116,749		115,068

The components of lease costs, lease term and discount rate with respect of the office lease with an initial term of more than 12 months are as follows:

	Year Ended			Year Ended
	March 31, 2025			December 31, 2024
Operating lease cost – amortization of ROU	$	60,418		$	60,066
Operating lease cost – interest expense on lease liability	$	4,088		$	5,063
Weighted Average Remaining Lease Term - Operating leases		2			2
Weighted Average Discount Rate - Operating leases		3.48	%		3.48	%

The following is a schedule, by years, of maturities of the office lease liabilities as of March 31, 2025:

For the year ended December 31, 2025,	$	60,418
For the year ended December 31, 2026	$	60,418
Total undiscounted cash flows		120,836
Less: imputed interest		(4,087	)
Present value of lease liabilities		116,749

Employment Agreement

On May 6, 2024, the Company entered another employment agreement with Mr. Shi for 24 months with monthly salary of RMB18,000 ($2,500). The Company will grant the CFO no less than 5,000 shares of the Company’s common stock annually; however, as of this report date, the Board of Directors and Compensation Committee have not approved the number of shares to be given to the CFO, nor any stock reward agreement has been signed.

Smart Powerr Corp. 10-Q