The Company accounts for facility leases in accordance with ASC 842 (Note 2). The Company is party to five facility leases in South Africa for office, manufacturing and laboratory space.

A lease for office and laboratory space in Pretoria, South Africa commenced in October 2021 with the initial term set to expire in December 2030. The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease. The Company’s incremental borrowing rate for this lease is 7.5% based on the remaining lease term of the applicable lease. Consequently, a ROU lease asset of $952,521 with a corresponding lease liability of $952,521 based on the present value of the minimum rental payments of such lease was recorded at the inception of the lease.

A lease for additional production space in Pretoria, South Africa commenced in April 2023 with the initial term set to expire in March 2024. Effective February 1, 2024, this lease was amended such that the new term begins on February 1, 2024 and expires in February 2026. Prior to the amendment, the Company had applied the guidance in ASC 842 and determined that this lease was a short term lease and expensed the monthly payments as incurred. The Company has applied the guidance in ASC 842 to the amended lease and has determined that it should be classified as an operating lease. The Company’s incremental borrowing rate for this lease is 10.6% based on the lease term of the applicable lease. A ROU lease asset of $364,458 with a corresponding lease liability of $364,458 based on the present value of the minimum rental payments of such lease was recorded at the commencement of the amended lease.

A lease for laboratory space in Pretoria, South Africa commenced in November 2023 with the initial term set to expire in October 2026. The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease. The Company’s incremental borrowing rate for this lease is 13.16% based on the remaining lease term of the applicable lease. Consequently, a ROU lease asset of $70,607 with a corresponding lease liability of $70,607 based on the present value of the minimum rental payments of such lease was recorded at the inception of the lease.

A lease for office and production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term set to expire in March 2026. The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease effective on the date of ASP Isotopes acquisition of 51% of PET Labs. The Company’s incremental borrowing rate is approximately 12.875% based on the expected remaining lease term of the applicable lease. Consequently, a ROU lease asset of $592,304 which reflects an $84,858 unfavorable adjustment based on the fair value of the lease terms and a corresponding lease liability of $677,163 based on the present value of the minimum rental payments of such lease was recorded at the date of ASP Isotopes acquisition of 51% of PET Labs. Dr. Gerdus Kemp, an officer of PET Labs and an employee of ASP UK, is the sole owner of the facility under this lease agreement.


	ROU Asset		Operating Lease Liability - Current		Operating Lease Liability – Non-Current		Total Operating Lease Liability
Lease:
Office and laboratory, Pretoria, South Africa	$	538,942	$	63,703	$	554,332	$	618,035
Additional production, Pretoria, South Africa		211,829		179,948		31,881		211,829
Laboratory, Pretoria, South Africa		45,433		23,653		23,674		47,327
Office and production, Pretoria, South Africa		325,930		290,372		78,592		368,964
Total	$	1,122,134	$	557,676	$	688,479	$	1,246,155

A summary of long-term leases in the consolidated balance sheet as of December 31, 2023 is as follows:


	ROU Asset		Operating Lease Liability - Current		Operating Lease Liability – Non-Current		Total Operating Lease Liability
Lease:
Office and laboratory, Pretoria, South Africa	$	626,548	$	53,504	$	637,348	$	690,852
Laboratory, Pretoria, South Africa		68,089		19,608		48,805		68,413
Office and production, Pretoria, South Africa		564,064		263,452		380,494		643,946
Total	$	1,258,701	$	336,564	$	1,066,647	$	1,403,211

A lease for additional production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term expiring in March 2024 and the Company is maintaining the lease under the agreed upon monthly extensions. The Company has applied the guidance in ASC 842 and has determined that this lease is a short term lease effective on the date of ASP Isotopes acquisition of 51% of PET Labs and expensed the monthly payments for the years ended December 31, 2024 and 2023.

Quantitative information regarding the Company’s operating lease liabilities is as follows:


	Year Ended December 31,
	2024			2023
Operating Lease Cost
Operating lease cost	$	663,662		$	178,610
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	644,793		$	153,988
Operating lease liabilities arising from obtaining right-of -use assets	$	364,458		$	70,607
Weighted average remaining lease term (years)		3.61			4.62
Weighted average discount rate		9.83	%		10.24	%

Future lease payments under noncancelable operating lease liabilities are as follows as of December 31, 2024:


	Operating Leases
Future Lease Payments
2025	$	651,437
2026		253,779
2027		124,770
2028		134,128
2029		144,188
Thereafter		155,002
Total lease payments	$	1,463,304
Less: imputed interest		(217,149	)
Total operating lease liabilities	$	1,246,155
Less current portion		(557,676	)
Operating lease liability - noncurrent	$	688,479

The Company records the expense from short term leases as incurred. The Company recorded lease expense from its short term leases of $31,746 and $121,312 for the year ended December 31, 2024 and 2023, respectively.

The Company accounts for finance leases in accordance with ASC 842 (Note 2). Subsequent to the acquisition of 51% of PET Labs on October 31, 2023, the Company is party to several ongoing finance leases in South Africa for certain fixed assets. In addition, In May and October 2024, the Company entered into new finance leases for additional equipment.

Quantitative information regarding the Company’s finance lease liabilities is as follows:


	Year Ended December 31,
	2024			2023
Finance Lease Cost
Interest on lease liabilities	$	68,609		$	5,059
Other Information
Operating cash flows paid for amounts included in the measurement of finance lease liabilities	$	100,611		$	9,601
Amortization of right-of-use assets	$	43,039		$	6,445
Weighted average remaining lease term (years)		4.4			3.9
Weighted average discount rate		13.1	%		11.3	%

Future lease payments under noncancelable finance lease liabilities are as follows as of December 31, 2024:


	Finance Leases
Future Lease Payments
2025	$	208,222
2026		211,913
2027		207,117
2028		170,443
2029		66,218
Thereafter		64,914
Total lease payments	$	928,827
Less: imputed interest		(242,637	)
Total lease liabilities	$	686,190
Less current portion		(125,862	)
Finance lease liability - noncurrent	$	560,328