DATASEA INC. Commitments Disclosure
NOTE 13 – Commiments
Lease Agreement
In December 2016, the Company renewed the one-year operating lease agreement. The lease started March 1, 2017 and will expire on February 28, 2018 and has a monthly rent of RMB 35,192 (or approximately US $5,167). Future rental payment due under the lease is RMB 387,112 (or approximately US $56,834).
Rental expenses for the year ended June 30, 2017 and 2016 were $63,790 and $58,769, respectively.
In December 2016, the Company renewed the one-year property management contract. The Contract started March 1, 2017 and will expire on February 28, 2018 and has a monthly management fee of RMB 70,384 (or approximately US $10,333). Future management fees due under the contract is RMB774,224 (or approximately US $113,668).
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2017 | Oct 13, 2017 | Showing above |
| 2016 | Sep 28, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.