Operating lease

9 Months Ended

Sep. 30, 2023

Operating Lease [Abstract]

Operating lease

8. Operating lease

On June 1, 2022, the Company entered into a noncancelable operating lease that includes two property location, one which is being used as the Company’s office and the other as its lab for research and development and the production of inventory. The lease had a commencement date of June 1, 2022 and expires on May 31, 2025, after which the term will continue on a month-to-month basis.

On July 3^rd, 2023, the Company amended the terms of the previously entered lease agreement to lease additional office space from the lessor. Rent increased from $10,773 to $13,477 per month commencing July 1, 2023, through May 31, 2025. The lease amendment required a remeasurement of the lease liability which resulted in an increase of $47,986 to the lease liability and an equal increase in the right of use asset as of July 1, 2023.

The Company recognized a total lease cost related to its noncancelable operating lease of $103,000 and $42,173, for the nine months ended September 30, 2023 and June 30, 2022, respectively. The lease cost has been allocated as follows based on the square footage of each property location.

	September 30, 2023		September 30, 2022
Office space, recorded in office and administration	$	74,641	$	29,569
Lab space, recorded in research and development		23,705		10,473
Lab space, capitalized to production of inventory		4,655		2,131
	$	103,000	$	42,173

As of September 30, 2023 and December 31, 2022, the Company recorded a security deposit of $10,773. (Note 5)

Future minimum lease payments under the Company’s operating lease that has an initial noncancelable lease term in excess of one year at September 30, 2023 are as follows:

As of September 30, 2023	Total
2023	$	40,430
2024		161,721
2025		67,374
Thereafter		-
		269,535
Less: Imputed interest		(25,316	)
Operating lease liability		244,219
Operating lease lability – current		140,910
Operating lease lability – non-current	$	103,309

The Company used a discount rate of 11.50% upon the remeasurement of the lease liability on July 1, 2023, compared to an original discount rate of 8% on lease commencement, as its incremental cost of borrowing and the remaining lease term as of September 30, 2023, is 1.67 years (December 31, 2022 – 2.42 years).