8. Leases

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 $18,133 as of December 31, 2024.

There were no additions or extensions to the right-of-use asset during the period from the Combination date to December 31, 2024. Total cash outflows for the lease were $31,940 for the period from the Combination date to December 31, 2024 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 period ended December 31, 2024:

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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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