8Leases

In connection with the Combination, the Company acquired a right-of-use asset which was revalued at the date of the Combination. Pharmagesic has obtained the right to control the use of office premises for a period of time through a lease arrangement. The lease arrangement was negotiated on an individual basis and contains a wide range of different terms and conditions including lease payments and remaining lease terms to August 31, 2028. The lease arrangement does not impose any covenants other than the security interests in the leased asset that is held by the lessor. The Company maintains a security deposit totaling $18,719 and $19,037 as of March 31, 2026 and December 31, 2025, respectively.

There were no additions or extensions to the right-of-use asset during the three months ended March 31, 2026 and 2025. Total cash outflows for the lease were $31,684 and $31,007 for the three months ended March 31, 2026 and 2025, respectively, and these costs were included in net cash used in operating activities.

The following table presents the components of the lease costs included in general and administrative expenses in the statements of operations for the three months ended March 31, 2026 and 2025:

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Future minimum annual commitments under the operating leases are as follows:

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Other information related to this operating lease and the calculation of related right-of-use assets and operating lease liabilities consists of the following:

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In February 2026, Wex entered into a sublease agreement (the “Sublease”) with a Canadian company (the “Subtenant”) with respect to the Company’s office premises in Vancouver, British Columbia, consisting of 3,558 rentable square feet. The Sublease has a term commencing March 1, 2026 and expiring August 30, 2028, with basic rent of CAD 22.00 per square foot per annum plus the Subtenant’s proportionate share of operating costs and taxes estimated at CAD 20.86 per square foot for 2026. The Company remains the primary obligor under the head lease and has accounted for the arrangement as an operating sublease under ASC 842. The Company evaluated the two components of the lease and determined that the basic rent is fixed sublease income and will be recognized on a straight-line basis over the 30-month lease term. The reimbursement of operating costs and real estate taxes are considered to variable sublease income as it does not depend on an index or rate and is subject to change each calendar year. The variable sublease income will be recognized in the period received which coincides with when the related costs are incurred. The variable sublease component is not included in the straight-line calculation and is not included in the maturity analysis of the future discounted lease payments.

Upon execution of the Sublease, the Subtenant delivered a deposit of approximately $48,800 (inclusive of goods and services tax and operating costs) representing the first month, thirteenth month and last three months of gross rent, operating costs and taxes, net of agent fees of three month’s total rent receivable of approximately $27,900. For the three months ended March 31, 2026, the Company recognized sublease income of $19,455, which is included in other income in the condensed consolidated statements of operations. The portion of the deposit attributable to future non-consecutive rental periods has been recorded as deferred sublease income, of which $9,573 is classified as current (relating to the thirteenth month of the Sublease term) and $28,718 is classified as long-term (relating to the final three months of the Sublease term).

Future minimum Sublease income including base rent and operating expenses is as follows:

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