LEASES

9 Months Ended

Sep. 30, 2025

LEASES

LEASES

8. LEASES

We determine if an arrangement is a lease at inception. We have operating leases for office and temporary living space. Operating leases are included in operating lease ROU assets, current operating lease liability and non-current operating lease liability in our consolidated balance sheets as of September 30, 2025 and December 31, 2024. The Company does not have any finance leases.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rates, which are derived from information available at the lease commencement date, in determining the present value of lease payments. We give consideration to our bank financing arrangements, geographical location and collateralization of assets when calculating our incremental borrowing rates. Our lease terms include options to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of less than 12 months are not recorded in the consolidated balance sheets. Our lease agreements do not contain any residual value guarantees. For real estate leases, we account for the lease and non-lease components as a single lease component. Some leases include escalation clauses and termination options that are factored in the determination of the lease payments when appropriate.

If a lease is modified after the effective date, the operating lease ROU asset and liability is re-measured using the current incremental borrowing rate. We review our incremental borrowing rate for our portfolio of leases on a quarterly basis. Lease expense is included in direct operating costs and general and administrative expenses in the consolidated statements of operations based on the nature of the expense.

Break down of operating lease expense:

	Three Month Ended September 30					Nine Months Ended September 30,
	2025		2024			2025		2024
Operating lease cost	$	41,534		(165,661	)	$	101,185	$	114,995
Short term lease cost		4,742		29,133			15,922		37,396
	$	46,276		(136,528	)	$	117,107	$	152,391

Supplemental balance sheet information related to leases was as follows:

	September 30,			December 31,
	2025			2024
	(Unaudited)
Operating leases
Operating lease ROU assets, net	$	417,688		$	451,111
Current operating lease liabilities		269,814			209,177
Non-Current operating lease liabilities		535,400			635,030
	$	805,214		$	844,207
Operating leases
ROU Assets		451,111			503,701
Lease termination					(17,396	)
Asset lease expense		(28,784	)		(41,612	)
Foreign exchange loss		(4,639	)		6,418
ROU Assets – net	$	417,688		$	451,111
Weighted average remaining lease term (in years):
Operating leases		6.41			6.93
Weighted average discount rate:
Operating leases		13.35	%		13.35	%

Supplemental cash flow and other information related to leases were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		34,803		35,190		102,705		105,384

Maturities of lease liabilities are as follows:

Operating leases - Years Ending December 31,
2025 (Three months)	$	38,593
2026		163,741
2027		177,324
2028		173,655
2029		252,897
Thereafter		287,168
Total lease payments	$	1,093,378
Less: imputed interest	$	(288,164	)
Total lease obligations	$	805,214
Less: current obligations	$	269,814
Long-term lease obligations	$	535,400,