The Company determines whether an arrangement is a lease at inception. The Company has operating and financing leases for certain land, office facilities and certain equipment. The leases have remaining lease terms of approximately two years to twenty-two years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Briscoe Project as discussed in Note 5 operates under multiple land lease agreements with third-party landowners for the turbine installation sites (the “Site Leases”). The Site Leases were remeasured as of the Closing Date of April 1, 2026 in accordance with ASC 842. Right-of-use assets of $3.9 million and corresponding lease liabilities of $4.0 million were recognized, reflecting the present value of remaining minimum lease payments discounted at the applicable rate as of the Closing Date. The weighted-average remaining lease term as of the Closing Date is approximately 19.7 years.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2026 and June 30, 2025, total lease costs are comprised of the following:


(Dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025

Operating lease cost	$	176	$	18	$	197	$	37

Short-term lease cost	—		38		—		38

Finance lease costs
Amortization of right of use assets	21		—		43		—
Interest on lease liabilities	51		—		79		—
Total finance lease costs	72		—		122		—

Total net lease cost	$	248	$	56	$	319	$	75

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related asset or liability for such leases.


	Six Months Ended June 30, 2026

Weighted Average Remaining Lease Term (in years):
Operating leases	18.60
Financing leases	20.83

Weighted Average Discount Rate:
Operating leases	14.22	%
Financing leases	11.35	%


(Dollars in thousands)	Six Months Ended June 30, 2026		Six Months Ended June 30, 2025

Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	203	$	41
Financing cash flows from financing leases	$	113	$	—

Non-Cash Activity Right-of-use assets obtained or adjusted in exchange for lease obligations:
Operating leases	$	—	$	—
Financing leases	$	(430)	$	—


(Dollars in thousands)

	Operating leases		Financing leases		Total
2026 (remainder of year)	$	41	$	113	$	154
2027	730		225		955
2028	677		225		902
2029	677		225		902
2030	677		225		902
Thereafter	9,779		3,656		13,435
Total lease payments	12,581		4,669		17,250
Less: imputed interest	(8,197)		(2,877)		(11,074)
Total lease obligations	4,384		1,792		6,176
Less: current obligations	(108)		(23)		(131)
Long-term lease obligations	$	4,276	$	1,769	$	6,045

As of June 30, 2026, the Company was contractually committed for approximately $8.2 million of capital expenditures, primarily related to infrastructure builds, equipment procurement, and labor associated with the Company’s Project Kati datacenters, in addition to Briscoe Wind Farm. These capital expenditures are expected to occur over the current year.

The Company has a potential contingency associated with an agreement with SLC of up to $250 thousand which would be reduced by a proportion of funding received from SLC up to the $45.0 million aggregate contribution cap. The Company considers the probability of a payment for the contingency to be remote.

We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.