Financial Analysis

"6. Acquisition: On February 24, 2026, the Company entered into a Share Purchase Agreement (the Purchase Agreement) by and among the Company, Infiterra Holding Limited, a company incorporated in Cyprus (the ""Seller""), and purchased the entire share capital of Interworks Single Member SA (Interworks), a Greek societe anonyme, for an aggregate purchase price of approximately 8.0 million (equivalent to $9.4 million USD), adjusted upwards for $3.6 million in net working capital adjustment resulting in a final purchase consideration of $13.0 million. Interworks is a Greece-based cloud distributor serving reseller markets across Southeastern Europe, including Greece, Malta, Cyprus, Bulgaria, and other regional markets, furthering the Companys reach into these geographies. The Purchase Agreement contains customary representations, warranties, covenants and indemnities. The acquisition was funded utilizing cash from the Companys balance sheet. The financial position and operating results of Interworks are included in the Company's consolidated financial statements from the date of the acquisition. The Company recorded net sales for Interworks of approximately $1.5 million and net income of approximately $0.1 million during the three months ended June 30, 2026. The Company recorded net sales for Interworks of approximately $2.1 million and net income of approximately $0.2 million during the six months ended June 30, 2026. The impact of the acquisitions preliminary purchase price all …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

16. Commitments and Contingencies Severance Plan The Board of Directors of the Company previously approved the Climb Global Solutions, Inc. Executive Severance and Change in Control Plan (the Severance Plan), which supersedes and replaces all other severance arrangements between the Company and its executive officers, which previously had been governed by separate legacy employment agreements and offer letters. The Severance Plan provides severance benefits upon a qualifying termination of employment (Covered Termination) of an executive officer. The Severance Plan provides for three tiers of severance benefits in the event of a Covered Termination based on the executives seniority and position, including payment of 6 - 18 months of base salary, a pro rata payment of such executives bonus for the year in which the Covered Termination occurred, and a COBRA subsidy during the severance period. In the event the Covered Termination in connection with a change of control, the Severance Plan provides for increased severance benefits, including payment of 18 - 24 months of base salary, payment of such executives target bonus for the year in which the Covered Termination occurred, double trigger vesting acceleration of equity awards, and a COBRA subsidy during the severance period. Other As of June 30, 2026 , the Company has no standby letters of credit, has no standby repurchase obligations or other commercial commitments. The Company has a line of credit see Note 11 (Credit Facilit …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

11. Credit Facility: On May 18, 2023, the Company entered into a revolving credit agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A. (JPM), providing for a revolving credit facility of up to $50.0 million, including the issuance of letters of credit and swingline loans not to exceed $2.5 million and $5.0 million, respectively, at any time outstanding. In addition, subject to certain conditions enumerated in the Credit Agreement, the Company has the right to increase the revolving credit facility by a total amount not to exceed $20.0 million. The proceeds of the revolving loans, letters of credit and swingline loans under the Credit Agreement may be used for working capital needs, general corporate purposes and for acquisitions permitted by the terms of the Credit Agreement. All outstanding loans issued pursuant to the Credit Agreement become due and payable, on May 18, 2028. During the six months ended June 30, 2026, borrowing under the Credit Agreement bore interest at a rate of 7.25% per annum. There were no amounts outstanding under the Credit Agreement as of June 30, 2026 and December 31, 2025 . Outstanding Loans comprising (i) ABR Borrowings bear interest at the ABR plus the Applicable Rate, (ii) Term Benchmark Borrowings bear interest at the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate, as applicable, plus the Applicable Rate and (iii) RFR Loans bear interest at a rate per annum equal to the applicable Adjusted Daily Simple RFR plus the Applicable R …

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15. Stockholders Equity and Stock Based Compensation: The Companys stockholders approved the Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan (the 2021 Plan) in June 2021. On June 2, 2026, the Companys stockholders approved the Amended and Restated Climb Global Solutions, Inc. 2021 Omnibus Incentive Plan (the Amended 2021 Plan), which, among other changes, increased the number of shares of the Companys common stock, par value $0.01 per share (Common Stock), reserved and available for issuance under the 2021 Plan by 1,810,000 shares, from 2,000,000 shares to 3,810,000 shares, in each case after giving effect to the Stock Split. The Amended 2021 Plan authorizes the grant of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards and Dividend Equivalent Rights. As of June 30, 2026 , the number of shares of Common Stock available for future award grants to employees, officers and directors under the Amended 2021 Plan is 1,788,849. During the six months ended June 30, 2026 , the Company granted a total of 290,200 Restricted Stock Units to directors, officers, and employees. During the six months ended June 30, 2026 , a total of 5,036 Restricted Stock Units were forfeited. During the six months ended June 30, 2025 , the Company granted a total of 174,944 Restricted Stock Units to directors, officers, and employees. During the six months ended June 30, 2025 …

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7. Goodwill and Other Intangible Assets: The following table summarizes the changes in the carrying amount of goodwill for the six months ended June 30, 2026 : Distribution Solutions Consolidated Balance December 31, 2025 $ 27,829 $ 9,009 $ 36,838 Goodwill acquired $ 5,818 $ 5,818 Translation adjustments (568 ) (142 ) (710 ) Balance June 30, 2026 $ 33,079 $ 8,867 $ 41,946 Information related to the Companys other intangibles, net is as follows: As of June 30, 2026 Gross Net Carrying Accumulated Carrying Amount Amortization Amount Customer and vendor relationships $ 51,192 $ 16,989 $ 34,203 Trade name 509 192 317 Total $ 51,701 $ 17,181 $ 34,520 As of December 31, 2025 Gross Net Carrying Accumulated Carrying Amount Amortization Amount Customer and vendor relationships $ 46,084 $ 14,195 $ 31,889 Trade name 517 178 339 Total $ 46,601 $ 14,373 $ 32,228 Customer relationships are amortized o ver thirteen years. Vendor relationships are amortized between eight and fifteen years. Trade name is amortized over fifteen ye ars. During the three months ended June 30, 2026 and 2025 , the Company recognized total amortization expense for other intangibles, net of $1.6 million, respectively. During the six months ended June 30, 2026 and 2025 , the Company recognized total amortization expense for other intangibles, net of $3.1 million and $2.9 million, respectively. Estimated future amortization expense of the Companys other intangibles, net as of June 30, 2026 is as follows: 2026 (excludin …

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14. Income Taxes: The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Companys policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. During the three months ended June 30, 2026 and 2025 , the Company recorded a provision for income taxes of $2.0 million and $1.8 million, respectively. The effective tax rate for the three months ended June 30, 2026 and 2025 was 26.8% and 22.9%, respectively. During the six months ended June 30, 2026 and 2025 , the Company recorded a provision for income taxes of $2.9 million and $2.3 million, respectively. The effective tax rate for the six months ended June 30, 2026 and 2025 was 24.4% and 19.5%, respectively. The change in effective tax rate for the three and six months ended June 30, 2026 , compared to the same period in the prior year was primarily impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as a discrete item for the recognition of excess tax benefit …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

8. Right-of-use Asset and Lease Liability: The Company has entered into operating leases for office and warehouse facilities, which have terms at lease commencement that range from 1 year to 11 years. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and lease expense for these leases is recognized on a straight-line basis over the lease term. Right-of-use (ROU) assets represent the Companys right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of the lease payments over the lease term. As our leases do not provide a readily determinable implicit rate, we use an incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term and included in selling, general and administrative expenses. Information related to the Companys ROU assets and related lease liabilities are as follows: Six months ended June 30, 2026 2025 Cash paid for operating lease liabilities $ 494 $ 398 Right-of-use assets o …

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"In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2025 - 11, ""Interim Reporting (Topic 270 ): Narrow-Scope Improvements."" This ASU clarifies the guidance in Accounting Standards Codification (ASC) Topic 270 - Interim Reporting , adding a comprehensive list of required interim disclosures and a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating these new disclosure requirements. In September 2025, the FASB issued ASU No. 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ): Targeted Improvements to the Accounting for Internal-Use Software . This ASU amends the guidance under ASC 350 - 40 for internal-use software. The amendments remove referenced to development-stages, clarify when capitalization may begin, and require entities to apply to property, plant and equipment disclosure requirements under ASC 350 - 10 to capitalize internal-use software costs. The ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption of ASU No. 2025 - 06 is permitted. The Company has performed an initial assessment and currently does not expect the adoption of …

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5. Revenue Recognition: The Companys revenues primarily result from the sale of various technology products and services, including third -party products, third -party software and third -party maintenance, software support and services. The Company recognizes revenue when control of the third -party products and third -party software is transferred to customers, which generally happens at the point of shipment or fulfilment and at the point that our customers and vendors accept the terms and conditions of the arrangement for third -party maintenance, software support and services. The Company has contracts with certain customers where the Companys performance obligation is to arrange for the products or services to be provided by another party. In these arrangements, as the Company assumes an agency relationship in the transaction, revenue is recognized in the amount of the net fee associated with serving as an agent. These arrangements primarily relate to third party maintenance, cloud services and certain security software whose intended functionality is dependent on third party maintenance. The Company allows its customers to return product for exchange or credit subject to certain limitations. A liability is recorded at the time of sale for estimated product returns based upon historical experience, which is included in accounts payable and accrued expenses on the Consolidated Balance Sheets, and an asset is recognized for the amount expected to be recorded upon product …

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17. Segment Information: The Company distributes software developed by others through resellers indirectly to customers worldwide. We also resell computer software and hardware developed by others and provide technical services directly to customers worldwide. FASB ASC Topic 280, Segment Reporting, requires that public companies report profits and losses and certain other information on their reportable operating segments in their annual and interim financial statements. The internal organization used by the public companys Chief Operating Decision Maker (CODM) to assess performance and allocate resources determines the basis for reportable operating segments. The Companys Chief Executive Officer, who has been identified as the Companys CODM, evaluates the performance of both reportable segments based on segment income. Net sales, gross profit, and operating expenses are also monitored closely. This information is used to measure segment profitability, allocate resources, and make budgeting and forecasting decisions about the reportable segments. The CODM also uses these measures to monitor trends in year over year performance comparisons, sequential quarter performance comparisons, and to compare actual results to forecasts. More disaggregated information about operating expense is only reviewed by the CODM on a consolidated basis. Segment income represents net sales less costs of sales, excluding depreciation and amortization expense and operating expenses. Net sales and co …

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"2. Recently Issued Accounting Standards: In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2025 - 11, ""Interim Reporting (Topic 270 ): Narrow-Scope Improvements."" This ASU clarifies the guidance in Accounting Standards Codification (ASC) Topic 270 - Interim Reporting , adding a comprehensive list of required interim disclosures and a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating these new disclosure requirements. In September 2025, the FASB issued ASU No. 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ): Targeted Improvements to the Accounting for Internal-Use Software . This ASU amends the guidance under ASC 350 - 40 for internal-use software. The amendments remove referenced to development-stages, clarify when capitalization may begin, and require entities to apply to property, plant and equipment disclosure requirements under ASC 350 - 10 to capitalize internal-use software costs. The ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption of ASU No. 2025 - 06 is permitted. The Company has performed an initial assessment and …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing