On May 14, 2025, the Company entered into a 99-year ground lease (“TTU Lease”) with the Texas Tech University System (“TTU”) for 5,769 acres of land in Carson County, Texas, intended for the development of Project Matador. Following a first amendment executed in August 2025, the Project Matador site was set at approximately 4,523 acres, with an additional 713-acre tract to be added upon transfer from a federal agency to TTU. Lease commencement for the 4,523-acre site occurred in September 2025. The lease term for the additional 713-acre tract had not yet commenced as of June 30, 2026. The lease contains no lessee-controlled options to extend or terminate and provides for annual escalations to lease payments.

At lease commencement, the Company recognized an operating lease right-of-use (“ROU”) asset and corresponding lease liability, measured at the present value of future lease payments, discounted using the Company’s incremental borrowing rate of 16.1%. As of June 30, 2026, the ROU asset and lease liability totaled $15,088 and $23,089, respectively. As of December 31, 2025, the ROU asset and lease liability totaled $21,737 and $21,320, respectively. Because lease cost is recognized on a straight-line basis over the 99-year lease term while contractual rent escalates over that term, cumulative lease cost recognized exceeds cumulative cash rent paid, and the resulting accrued rent reduces the carrying amount of the ROU asset relative to the lease liability.

The Company is obligated to pay annual base rent of $1,200 in the first year, escalating annually during the initial five years as specified in the lease agreement, with a fixed 3.0% annual escalator thereafter. During the years when the Company subleases private-grid powered AI data center infrastructure facilities to its subtenants, the Company will be required to pay variable lease payments based on (i) up to 1.0% of the appraised value of leased data center space in that year (up to $3.0 billion in total assessed value) and 0.5% on additional appraised value above $3.0 billion, to the extent greater than the base annual rent, and (ii) a percentage of gross revenues from the sale of power (1.0% of gross revenues) and water (25.0% of gross revenues) to its subtenants. As of June 30, 2026, no variable lease payments had been made. The lease provides that, before beginning vertical construction of data center facilities on the leased site, the Company must receive a notice to proceed from TTU by December 31, 2026, and TTU may terminate the lease if the notice is not received by that date. Issuance of the notice to proceed is conditioned on, among other things, the Company’s execution of a lease with a Phase 1 tenant for not less than 200 MW of capacity at Project Matador (see Note 9, Subsequent Events, regarding the TensorWave Lease), together with other customary conditions.

On March 30, 2026, TTU and the Company entered into a collaboration agreement (the “Collaboration Agreement”) regarding the future of Project Matador, which reflects each party’s intent to move forward collaboratively with the development of the leased site. As a result of the agreement, the Company agreed to prepay rent in the amount of $2,000 within 75 days of the date of the Collaboration Agreement, with an additional $9,000 to be paid into escrow prior to December 31, 2026, with such amounts to be released from escrow as they become due under the ground lease and applied to any amounts payable (including rent) to TTU.

During the six months ended June 30, 2026, Fermi Water, LLC, a wholly owned subsidiary of the Company, entered into six groundwater lease agreements with various lessors (collectively, the “Groundwater Leases”). The Groundwater Leases cover approximately 5,227 acres in the aggregate in Carson County, Texas, separate from the acreage leased under the TTU Lease.

Each of the Groundwater Leases has an initial term of 30 years, subject to extension so long as operations are conducted on the leased premises without a cessation of more than 12 consecutive months, and is terminable by the lessee upon 365 days’ prior written notice to the lessor, together with a payment equal to four months of the then-applicable Minimum Annual Royalty. The Company has concluded that exercise of the termination option is not reasonably certain; accordingly, the full 30-year contractual term has been used for measurement purposes under ASC 842.

The Groundwater Leases provide for aggregate minimum annual royalty of $3,855 in the first year of each lease. The minimum annual royalty and royalty rate shall increase by 2.00% per year on each January 1 following commencement of production. Variable royalty payments of three dollars per one thousand gallons of groundwater produced in excess of the volume covered by the minimum annual royalty in a given calendar year are payable by February 1 of the succeeding year. As of June 30, 2026, no variable royalty payments had been made.

Upon commencement, the Company recognized operating lease ROU assets and corresponding lease liabilities of $33,007 in the aggregate, measured at the present value of future minimum royalty payments discounted using the Company’s incremental borrowing rate of 14.1% for leases that commenced on January 1, 2026, and 13.8% for leases that commenced on May 1, 2026. As of June 30, 2026, the related ROU assets and lease liabilities totaled approximately $32,657 and $33,208, respectively.


	June 30, 2026		December 31, 2025
2026	$	2,359	$	432
2027	5,760		1,836
2028	6,271		2,268
2029	7,768		3,684
2030	8,196		4,031
Thereafter	1,786,047		1,649,323
Total undiscounted lease payments	$	1,816,401	$	1,661,574
Less: imputed interest	(1,760,104)		(1,640,254)
Present value of lease liabilities	$	56,297	$	21,320

On October 22, 2025, Fermi Mobile Gen LLC, a wholly owned subsidiary of the Company, entered into a master lease agreement (the “MPS Agreement”) with Mobile Power Solutions LLC (“MPS”) for seven GE TM2500 Gen 4 mobile power generation units, with monthly base rent payments extending through 2045. The MPS Agreement supports the natural gas component of Project Matador’s initial generation capacity. Fermi Inc. has guaranteed the obligations of the lessee, Fermi Mobile Gen LLC.

On April 13, 2026, Fermi Mobile Gen LLC and MPS entered into the First Amendment (the “Amendment”) to the MPS Agreement, deferring the delivery schedule. Pick-up dates for all seven units will commence July 1, 2027, and end September 30, 2027, with lease commencement now expected in the third quarter of 2027. During the extension period, MPS may lease, sublease, or otherwise make the units available to third parties; if a unit is not available for pick-up during the amended pick-up dates as a result of third-party use, the applicable pick-up deadline will automatically extend until the unit is made available. All other material terms, including the monthly base rent structure extending through 2045 and the absence of termination rights for convenience, remain unchanged. The Company accounted for the Amendment as a pre-commencement modification; the modified contract continues to contain a lease, and the ROU and lease liability will be measured and recognized at the commencement date based on the modified terms.

As of June 30, 2026, lease commencement had not occurred because the contractual preconditions for the Company’s pick-up obligation had not been satisfied, and the Company did not control the units. Accordingly, no ROU asset or lease liability had been recognized under ASC 842. As of June 30, 2026, the Company had paid $35,966 in advance of lease commencement, consisting of $12,287 in cash and $23,679 settled through the issuance of 1,190,476 shares of common stock at a fair value of $19.89 per share, the closing market price on the date of issuance. These payments are included in prepaid expenses and other assets and will be reclassified to lease ROU assets upon lease commencement.