9. Leases

The Company complies with ASC 842, Leases, for lease accounting. Leases meeting the criteria are categorized as either operating or financing leases and appear on the condensed consolidated balance sheet as Right-of-use assets and lease liabilities. These are determined by discounting fixed lease payments using either the implicit lease rate or the Company's incremental borrowing rate. Lease liabilities increase with interest and decrease with payments over time, while the Right-of-use (ROU) asset is amortized over the lease term. Operating leases result in straight-line rent expense over the term, and finance leases lead to front-loaded expenses. Variable lease costs are recorded when incurred.

On February 1, 2023, the Company renewed its office operating lease for 24 months, incurring a total lease payment of $41,625. This resulted in a liability and Right-of-use asset of $38,701, recognized on the lease's inception date. The calculations employed a 7.0% incremental borrowing rate to discount future rent payments of approximately $1,734 per month over the two-year lease term.

For the three months ended September 30, 2023, $5,203 in operating lease expenses were recorded in Management and administrative expenses. Over the nine months ending September 30, 2023, a total of $13,875 in operating lease expenses were recognized in management and administrative expenses.

The table below displays the future operating lease payments and lease liability as of September 30, 2023, related to the Company's operating lease.

Right of Use (ROU) asset Year Ending December 31,		Total Amount
2023 (remaining three months)	$	5,203
2024		21,189
2025		1,734
Total		28,126
Less: Imputed Interest		(1,360	)
Total lease Liability		26,766
Less current portion		(18,013	)
Non-current lease liability	$	8,753

The Company's ROU asset decreased by the net amount of $12,311 for a total amount of $26,390, for the period ended September 30, 2023. The lease contains no renewal option.