Note 8 - Right-of-use Asset and Lease Liability

6 Months Ended

Jun. 30, 2026

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 Company’s 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 Company’s 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 obtained in exchange for new operating lease obligations	$	473		$	—
Weighted-average remaining lease term (years)		4.9			3.1
Weighted-average discount rate		6.2	%		5.5	%

Maturities of lease liabilities as of June 30, 2026 were as follows:

2026 (excluding the six months ended June 30, 2026)	$	372
2027		697
2028		610
2029		405
2030		87
Thereafter		316
		2,487
Less: imputed interest		(436	)
Total lease liabilities	$	2,051

Lease liabilities, current portion		683
Lease liabilities, net of current portion		1,368
Total lease liabilities	$	2,051

Climb Global Solutions, Inc. 10-Q