8. LEASES

12 Months Ended

Sep. 30, 2022

8. LEASES

On October 1, 2019, the Company adopted the amendments to ASC 842, Leases, which requires lessees to recognize lease assets and liabilities arising from operating leases on the balance sheet. The Company adopted the new lease guidance using the modified retrospective approach and elected the transition option issued under ASU 2018-11, Leases (Topic 842) Targeted Improvements, allowing entities to continue to apply the legacy guidance in ASC 840, Leases, to prior periods, including disclosure requirements.

The Company’s operating leases are office spaces and finance leases which are primarily related to equipment used at its data center.

The Company's lease costs recognized in the Consolidated Statements of Operations and Comprehensive Loss consist of the following:


	For the year ended
	September 30, 2022		September 30, 2021
Operating lease cost (1)	$	112,869	$	10,674
Finance lease cost:
Depreciation expense financed assets	$	379,260	$	302,359
Interest on lease obligations	$	37,886	$	44,726

(1)

Included in general and administrative expenses

Other lease information is as follows:


	For the year ended
	September 30, 2022		September 30, 2021
Cash paid for amounts included in measurement of lease obligations:
Operating cash outflows from operating leases	$	131,425	$	12,687
Operating cash outflows from finance leases	$	38,125	$	42,992
Financing cash outflows from finance leases	$	519,273	$	181,475


	September 30, 2022			September 30, 2021
Weighted-average remaining lease term - operating leases	1.5 years			2.5 years
Weighted-average remaining lease term - finance leases	1.53 years			3.2 years
Weighted-average discount rate - operating leases		4.50	%		4.50	%
Weighted-average discount rate - finance leases		5.50	%		5.50	%

The following is a schedule of the Company's lease liabilities by contractual maturity as of September 30, 2022:


Fiscal Year	Operating Leases			Finance Leases
2023	$	135,368		$	274,651
2024		139,429			161,766
2025		143,612			21,607
2026		147,920			1,853
2027		50,660			—
Thereafter		-			—
Gross lease liabilities		616,989			459,877
Less: imputed interest		(56,443	)		(19,493	)
Present value of lease liabilities	$	560,546		$	440,384
Less: Current portion of lease liabilities		(112,955	)		(260,387	)
Total lease liabilities, net of current portion	$	447,591		$	179,997