The Company has both operating and finance leases, primarily related to construction and transportation equipment, as well as office and workshop space.

For operating leases, right-of-use assets and lease liabilities are recognized at the commencement date. Operating lease liabilities are measured at the present value of the lease payments over the lease term. Operating right-of-use assets are calculated as the present value of the lease payments plus initial direct costs, plus any prepayments less any lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement.

Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term.

The assets and liabilities under the finance leases are recorded at the present value of the future minimum lease payments. The assets are amortized over the lower of their related lease terms or their estimated useful lives. Following is a summary of equipment held under the finance leases at March 31, 2026, and December 31, 2025, respectively:


	March 31, 2026			December 31, 2025
Equipment	$	16,360,122		$	15,919,545
Accumulated depreciation		(10,218,141	)		(9,975,175	)
	$	6,141,981		$	5,944,370

Future minimum lease payments as of March 31, 2026 were as follows:


	Finance Leases			Operating Leases
2026	$	3,153,775		$	5,029,501
2027		3,353,543			6,563,206
2028		1,562,652			4,517,490
2029		894,592			2,550,382
2030		60,093			2,168,115
Thereafter		-			8,669,700
Total future undiscounted lease payments		9,024,655			29,498,394
Less: Imputed interest		(543,618	)		(6,787,381	)
Lease liabilities		8,481,037			22,711,013
Less: Current portion of lease liabilities		(3,487,722	)		(5,455,264	)
Long-term portion of lease liabilities	$	4,993,315		$	17,255,749

The components of lease costs are as follows:


	For the three months ended March 31, 2026		For the three months ended March 31, 2025
Amortization of finance lease assets	$	481,724	$	749,683
Interest in finance lease liabilities		81,051		113,048
Operating lease cost		1,346,761		897,253
Short-term lease costs		—		—
Total lease costs	$	1,909,536	$	1,759,984

The net change in ROU asset and operating lease liability is included in the net change in other assets in the condensed consolidated statements of cash flows. Other required information related to the Company’s lease obligations were as follows:


	For the three months ended March 31, 2026			For the three months ended March 31, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	(538,528	)	$	(599,006	)
Operating cash flows from operating leases		(1,193,081	)		(917,626	)
Assets obtained in exchange for lease obligations (non-cash)
Property and equipment via finance leases		695,897			723,438
Right-of-use assets via operating leases		11,767,913			1,495,491

As of March 31, 2026 and March 31, 2025 the weighted-average discount rate for operating leases was 6.84% and 5.53%, respectively. The weighted-average remaining operating lease term as of March 31, 2026 and 2025, was 6.53 and 2.79 years, respectively. As of March 31, 2026 and March 31, 2025, the weighted-average discount rate for finance leases was 4.80% and 4.56%, respectively and the weighted-average remaining lease term was 2.44 years and 2.47 years, respectively.

In connection with the acquisition of ALGC (see Note 3 – Business Combinations), the Company assumed right-of-use assets and lease liabilities which have been included in the consolidated lease balances presented herein. A description of the leases and terms as well as the fair values of the right-of-use assets and lease liabilities recognized as of the acquisition date are disclosed in Note 3.

Certain of the Company's lease arrangements involve related parties. See Note 16 – Related Party Transactions for further details.