8.RIGHT-OF-USE ASSET AND LEASE LIABILITY 

The Company currently leases office space, which are classified as operating leases under ASC 842.

The components of operating lease expense, associated with the Company’s leasing of office space, consisted of amortization of the right-of-use asset of $37,112 and $38,220 during the six months ended June 30, 2026 and 2025, respectively, and accretion of the lease liability of $780 and $4,781 for the six months ended June 30, 2026 and 2025, respectively.

The weighted average remaining lease term in years was 2.92 and 1.17 as of June 30, 2026 and 2025, respectively. The weighted average discount rate as of June 30, 2026 and 2025, was 11.90%.

Amortization expense on operating leases is included as part of general and administrative expenses on the income statement. The total lease expense recognized on the income statement is the sum of the accretion of the lease liability and amortization expense. This total expense reflects the cost of using the leased asset over the lease term.

The following table reconciles the undiscounted future cash flows for the next five years and thereafter to the operating lease liabilities recorded within the condensed consolidated balance sheet as of June 30, 2026:

The Company previously leased remote accommodation camps under finance lease agreements. During the third quarter of 2025, the Company terminated its finance lease arrangement, and all associated right-of-use assets and lease liabilities were fully derecognized during June 2025. No termination payments were made in connection with the early termination.

The components of finance lease expense, associated with the Company’s leasing of remote accommodation camps, consisted of amortization of the right-of-use asset of $0 and $10,623 during the six months ended June 30, 2026 and

2025, respectively, and accretion of the lease liability of $0 and $51,007 during the six months ended June 30, 2026 and 2025, respectively.

The weighted average remaining lease term in years was 0 and 1 as of June 30, 2026 and 2025, respectively. The weighted average discount rate was 10.25%.

Amortization expense on financing leases is included as part of general and administrative expenses on the statement of operations. The total lease expense recognized on the statement of operations is the sum of the accretion of the lease liability and amortization expense. This total expense reflects the cost of using the leased asset over the lease term.

Included in the total lease payments are approximately $36,837 in demobilization costs associated with the decommissioning and removal of the remote accommodation camps at the end of the lease term in 2025. These costs have been capitalized as part of the lease liability and right-of-use asset and were recognized over the term of the lease.