6. LEASES

Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has finance leases for its vehicle, equipment, and real estate space leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years, and in some instances include one or more options to renew. The Company includes options to extend the lease term in the initial measurement of leases if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases.

Finance and operating lease right-of-use (ROU) assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease.

The Company calculates the present value of its finance and operating lease payments using the rate implicit in the lease when that rate is readily determinable. Because the information necessary to determine the implicit rate is generally not available to the Company, the Company typically uses an estimated incremental borrowing rate (IBR), which requires judgment.

For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment, with similar payment terms and maturities commensurate with the applicable lease. For all other leases, the Company estimates the IBR using the interest rate stated in the underlying contract when management determines that rate reasonably approximates the Company's IBR.

Certain leases contain variable payments, these payments are expensed as incurred and not included in the Company’s operating lease ROU assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance and are excluded from the present value of the Company’s lease obligations.

The Company does not record operating lease ROU assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets.

When a lease is terminated before the expiration of the lease term, irrespective of whether the lease is classified as a finance lease or an operating lease, the lessee would derecognize the ROU asset and corresponding lease liability. Any difference would be recognized as a gain or

loss related to the termination of the lease. Similarly, if a lessee is required to make any payments or receives any consideration when terminating the lease, it would include such amounts in the determination of the gain or loss upon termination.

Equipment Line of Credit—The Company has an equipment line of credit, dedicated to funding eligible equipment purchases and related freight, installation costs and taxes paid. As of June 30, 2026, the outstanding balance was $15.3 million on this credit line. The interest rate applicable to each lease financed under the facility is fixed at inception based on the SOFR swap rate on, or nearest to, the closing date. Equipment financed through the facility that meets the finance lease classification criteria under ASC 842 is recognized as finance lease ROU assets and corresponding finance lease liabilities.