9.

LEASES

The Company has operating leases for real estate in the US and South Africa, and does not have any finance leases.

As of February 29, 2020, the Company had entered into a real estate lease for office space in Wilmington, Massachusetts. The Company is involved in the construction and design of the space and anticipates that it will incur construction costs, subject to an allowance for tenant improvements of up to $210,490. The lease expiration date is August 31, 2026. The base rent is $114,180 per year, subject to an annual upward adjustment. Variable lease payments include the Company's allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The lease commencement date, for accounting purposes, was not reached as of February 29, 2020 and therefore the lease is not included in the Company's operating lease right-of-use asset or operating lease liabilities as of February 29, 2020.

Certain of the Company's leases contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the Company's balance sheet are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain to not exercise.

The Company has existing leases that include variable lease and non-lease components that are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. Such payments primarily include common area maintenance charges.

In calculating the present value of future lease payments, the Company has elected to utilize its incremental borrowing rate based on the remaining lease term of each lease at the date of adoption. The Company has elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. The Company has existing net leases in which the non-lease components (e.g., common area maintenance) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and lease liability but rather reflected as an expense in the period incurred. As of February 29, 2020, right-of-use assets of $58,196, current lease liabilities of $29,043 (included in “Accounts payable and accrued liabilities” within the Condensed Consolidated Balance Sheets), and non-current lease liabilities of $29,403 are reflected on the balance sheet. The elements of lease expense included in SG&A were as follows: