Company: KWIK
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002055
Chunk: 159

Company: KwikClick, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 159
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 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 would be sustained in a tax examination with a tax examination being presumed to occur. The
amount recognized is the largest amount of tax benefit that has a greater than 50% cumulative likelihood of being realized on examination.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Foreign Currency Translation

The Company’s functional and reporting currency
is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate
prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of
exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses
arising on translation or settlement of foreign currency den