LEASES

6 Months Ended

Mar. 31, 2025

LEASES

LEASES

5. LEASES

Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases. Right of use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The incremental borrowing taking into consideration the Company’s credit quality and borrowing rate for similar assets is used in determining the present value of future payments. Lease expense is recorded as general and administrative expenses on the Company’s consolidated statements of operations. We elected the package of transitional practical expedients, under which we (1) did not reassess whether any expired or existing contracts are or contain leases, (2) we did not reassess the lease classification for any expired or existing leases and (3) we did not reassess initial direct costs for any existing leases. Additionally, we elected the short-term lease recognition exemption for all leases that qualify, meaning it does not recognize right-of use assets or lease liabilities for those leases. We also elected the practical expedient to not separate lease and non-lease components for all asset classes.  The Company adopted ASC 842 effective October 1, 2022 and the adoption did not have any impact on previously reported stockholders’ deficit

The Company has entered into operating leases for office and development facilities which range from two to three years and include options to renew. The Company determines whether an arrangement is or contains a lease based upon the unique facts and circumstances at the inception of the lease. Operating lease liabilities and their corresponding right-of-use asses are recorded based upon the present value of the lease payments over the expected lease term. As of March 31, 2025 and September 30, 2024 total operating lease liabilities were $287,214 and $358,288, respectively. Right of use assets totaled approximately $281,347 and $337,703 at March 31, 2025 and September 30, 2024, respectively. In the three months ended March 31, 2025 and 2024 the Company recognized $33,037 and $50,860, respectively in total lease costs for the leases. In the six months ended March 31, 2025 and 2024, the Company recognized $66,074 and $113,305, respectively in total lease costs for the leases. Cash paid for amounts included in the measurement of lease liabilities were $68,954 and $75,884, respectively, for the six months ended March 31, 2025 and 2024. Because the rate implicit in each lease is not readily determinable, the Company uses its estimated incremental borrowing rate to determine the present value of the lease payments.

The weighted average remaining lease term for the operating leases was 28 months at March 31, 2025 and the weighted average discount rate was 7% as of March 31, 2025 and September 30, 2024.

The minimum future lease payments as of March 31, 2025 are as follows:

March 31,
2026	$	129,863
2027		145,948
2028		50,236
Total remaining payments		326,047
Less imputed interest		(38,834	)
Total lease liability	$	287,214