MicroAlgo Inc.

Lease commitments

The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.

The Company has entered into 5 non-cancellable operating lease agreements for 5 office spaces expiring through September 2029. As of June 30, 2026, the Company recognized approximately RMB 1.0 million (USD 0.2 million) right of use (“ROU”) assets and RMB 1.0 million (USD 0.2 million) of lease liabilities based on the present value of the future minimum rental payments of leases, using a weighted average discount rate of 7%, which is determined using an incremental borrowing rate with similar term in the PRC. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration and the weighted average remaining lease terms are 1 year. The Company takes the short-term lease exemption for the lease agreements with a term of less than 1 year and expensed nil and nil for the year ended December 31, 2025 and the six months ended June 30, 2026, respectively.

The maturity of the Company’s operating lease obligations is presented below:

Note 13 —Shareholders’ equity

The Company was established under the laws of Cayman Islands on May 14, 2018 with authorized share of 50,000,000 ordinary shares of par value USD 0.001 each.

On October 21, 2022, the Company held an Extraordinary General Meeting of its stockholders of record. The Meeting approved amendments to increase the number of authorized Ordinary shares of the Company from USD 50,000 divided into 50,000,000 Ordinary shares of par value USD 0.001 each to USD 200,000 divided into 200,000,000 Ordinary shares of par value USD 0.001 each.