Company: KWIK
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002055
Chunk: 488

Company: KwikClick, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 488
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 such as brokerage commissions, less any lease incentives
received. All right-of-use assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets.
The lease liability is initially measured at the present value of the lease payments, discounted using the rate implicit in the contract
if available or an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The
discount rates used for the initial measurement of lease liabilities as of the date of entry were based on the original lease terms.

     F-9 

Lease payments included in the measurement of lease
liabilities consist of (i) fixed lease payments for the noncancelable lease term, (ii) fixed lease payments for optional renewal periods
where it is reasonably certain the renewal option will be exercised, and (iii) variable lease payments that depend on an underlying index
or rate, based on the index or rate in effect at lease commencement. Certain real estate lease agreements require payments for non-lease
costs such as utilities and common area maintenance. The Company has elected an accounting policy to not separate implicit components
of the contract that may be considered non-lease related.

Lease expense for operating leases consists of the
fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. The lease payments
are allocated between a reduction of the lease liability and interest expense. Depreciation of the right-of-use asset for operating leases
reflects the use of the asset on straight-line basis over the expected term of the lease.

Income Taxes

Income taxes are accounted for under the asset and
liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit
carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized as income in the period that includes the enactment date. Valuation allowances are established when necessary
in order to reduce deferred tax assets to the amounts expected to be recovered.

The Company applies accounting guidance for income
taxes with respect to uncertain tax positions. As a result of this guidance, a tax position is recognized as a benefit only if it is “more
likely than not” that the tax position