Company: KWIK
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002055
Chunk: 341

Company: KwikClick, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1C
Chunk 341
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 period. Actual results could differ from those estimates.

Lease Accounting

The Company occupies office space under a lease arrangement.
The property is leased under a non-cancelable agreement that contains a lease term in excess of twelve months on the date of entry as
well as renewal options for additional periods. The agreement, which has been classified as an operating lease, provides for base minimum
rental payments, as well non-lease components including insurance, taxes, maintenance, and other common area costs.

At the lease commencement date, the Company recognizes
a right-of-use asset and a lease liability for all leases, except short-term leases with an original term of twelve months or less. The
right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of
the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount
of the lease liability, plus any prepayments to the lessor and initial direct costs 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