LEASE OBLIGATIONS

9 Months Ended

Jun. 30, 2026

LEASE OBLIGATIONS

LEASE OBLIGATIONS

16.  LEASE OBLIGATIONS

The Company leases office space for SQP at a rate of $1,500 per month. The lease, originally executed on March 25, 2021, has a two-year base term with five one-year renewal options available following expiration of the base term. As of June 30, 2026, the Company has committed to a one-year renewal period and is evaluating the exercise of additional renewal options.

The Company has two right-of-use operating leases acquired on April 29, 2022, as part of the Tri-State Paving, LLC acquisition. The first lease, for the Hurricane, West Virginia facility, had a net present value of $236,000 at inception and a carrying value of $0 at June 30, 2026. The lease bears interest at 4.5%, based on the Company’s incremental borrowing rate at inception. The Company executed an amendment to extend the lease for one additional year following the expiration of the original term. As of June 30, 2026, the Company has committed to one renewal period and is evaluating additional renewals.

The second lease, for the Chattanooga, Tennessee facility, had a net present value of $144,000 at inception and expired on August 31, 2024. The lease was renewed for a two - year term with a net present value of $140,000 and had a carrying value of $11,000 at June 30, 2026. The lease bears interest at 8.5%, based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease with Enterprise Fleet Management. The master lease covered 102 vehicles and had a carrying value of $2.2 million at June 30, 2026. Each vehicle under the master lease arrangement carries its own implicit rate.

The Company has a five - year right-of-use operating lease renewed in April 2026 for the Winchester, Kentucky facility. The lease had a net present value of $481,000 at inception and a carrying value of $461,000 at June 30, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception. The lease was renewed for a three-year term and has two one – year renewal options that the Company expects to exercise.

The Company has a right-of-use operating lease acquired on December 1, 2025 for the Columbus, Ohio facility. The lease had a net present value of $255,000 at inception and a carrying value of $212,000 at June 30, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease acquired on January 1, 2026 for the Oklahoma City, Oklahoma facility. The lease had a net present value of $208,000 at inception and a carrying value of $177,000 at June 30, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease acquired on January 1, 2026 for the Louisville, Kentucky facility. The lease had a net present value of $128,000 at inception and a carrying value of $118,000 at June 30, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception. Lease payments did not commence until April 1, 2026.

The Company has a right-of-use operating lease acquired on May 1, 2026 for a facility in Buena Vista, Virginia. The lease had a net present value of $224,000 at inception and a carrying value of $206,000 at June 30, 2026. The lease bears interest at 6.75%, based on the Company’s incremental borrowing rate at inception.

Schedules related to the Company’s operating leases for the three and nine months ended June 30, 2026 and 2025 and at June 30, 2026 can be found below:

Operating Lease-Weighted Average Remaining Term

		Remaining
	Years left	liability			Lease end	Fiscal year end
Operating lease 1	0.0	$	—		3/31/2025	2025
Operating lease 2	0.2		11,406		8/31/2026	2026
Operating lease 3	4.0		2,193,589		6/30/2030	2030
Operating lease 4	4.8		461,163		3/31/2031	2031
Operating lease 5	2.4		211,992		11/30/2028	2029
Operating lease 6	2.5		177,103		12/31/2028	2029
Operating lease 7	2.5		117,783		12/31/2028	2029
Operating lease 8	1.8		206,387		4/30/2028	2028
		$	3,379,423
Weighted average remaining term			3.2	years

Operating Lease Maturity Schedule

July 2026 to June 2027	$	1,728,094
July 2027 to June 2028		1,087,802
July 2028 to June 2029		685,580
July 2029 to June 2030		402,647
July 2030 to June 2031		101,361
		4,005,484
Less amounts representing interest		(626,061)
Present value of operating lease liabilities	$	3,379,423

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
Operating Lease Expense	2026		2025		2026		2025
Amortization
Operating lease 1	$	—	$	6,885	$	—	$	45,833
Operating lease 2		5,583		6,605		38,731		41,399
Operating lease 3		273,091		234,661		750,293		645,397
Operating lease 4		19,779		39,362		64,246		88,831
Operating lease 5		21,093		—		42,564		—
Operating lease 6		12,171		—		30,698		—
Operating lease 7		10,472		—		10,472		—
Operating lease 8		17,530		—		17,530		—
Total amortization	$	359,719	$	287,513	$	954,534	$	821,460
Interest
Operating lease 1	$	—	$	—	$	—	$	545
Operating lease 2		358		1,842		2,127		6,648
Operating lease 3		37,285		56,336		117,254		174,845
Operating lease 4		7,851		950		8,865		5,391
Operating lease 5		5,861		—		9,190		—
Operating lease 6		1,089		—		6,502		—
Operating lease 7		2,105		—		2,105		—
Operating lease 8		2,470		—		2,470		—
Total interest	$	57,019	$	59,128	$	148,513	$	187,429
Total amortization and interest	$	416,738	$	346,641	$	1,103,047	$	1,008,889

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
Cash Paid for Operating Leases	2026		2025		2026		2025
Operating lease 1	$	—	$	6,885	$	—	$	46,378
Operating lease 2		5,941		8,447		40,858		48,047
Operating lease 3		310,376		290,997		867,547		820,242
Operating lease 4		27,630		40,312		73,111		94,222
Operating lease 5		26,954		—		51,754		—
Operating lease 6		13,260		—		37,200		—
Operating lease 7		12,577		—		12,577		—
Operating lease 8		20,000		—		20,000		—
	$	416,738	$	346,641	$	1,103,047	$	1,008,889

The Company rents equipment for use on construction projects with rental agreements week to week or month to month. Rental expense can vary by fiscal year due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expenses, which is included in cost of revenue on the consolidated statements of income, were $8.3 million and $4.8 million for the three months ended June 30, 2026, and 2025, respectively, and $20.1 million and $13.8 million for the nine months ended June 30, 2026 and 2025, respectively.