What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-04-30 · 224 added, 133 removed, 674 unchanged (35% of the section changed)

60 unchanged sentences

(Amounts in thousands, except per share data)

Six months ended

Three months ended

19 unchanged sentences

(Amounts in thousands)

Six months ended

Three months ended

11 unchanged sentences

Balance at January 1, 2026

Translation adjustment

Share-based compensation expense

Restricted stock unit grants (net of forfeitures)

Treasury shares repurchased

Balance at March 31, 2026

Translation adjustment

Share-based compensation expense

Restricted stock unit grants (net of forfeitures)

Treasury shares repurchased

Balance at June 30, 2026

Comprehensive

Income (Loss)

Balance at January 1, 2025

21,138,000 $ 53 $ 37,977 2,732,792 $ ( 13,337 ) $ 68,787 $ ( 2,892 ) $ 90,588

2 unchanged sentences

— — — — — — 1,553 1,553

Dividends paid (per common share $ 0.04 )

— — — — — ( 766 ) — ( 766 )

Share-based compensation expense

6 unchanged sentences

21,138,000 $ 53 $ 39,532 2,801,780 $ ( 14,397 ) $ 71,705 $ ( 1,339 ) $ 95,554

Comprehensive

Income (Loss)

Balance at January 1, 2025

— — — — — 5,968 — 5,968

— — — — — 3,684 — 3,684

Translation adjustment

8 unchanged sentences

— — — 21,004 ( 539 ) — — ( 539 )

Balance at March 31, 2025

Balance at June 30, 2025

21,138,000 $ 53 $ 40,043 2,669,176 $ ( 14,266 ) $ 76,904 $ 2,443 $ 105,177

4 unchanged sentences

(Amounts in thousands)

Three months ended

Six months ended

Cash flows from operating activities

$ 3,334 $ 3,684

Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:

2 unchanged sentences

Deferred income tax benefit

( 134 ) ( 130 )

Share-based compensation expense

1 unchanged sentence

Amortization of discount on accounts receivable

( 19 ) ( 12 )

Amortization of right-of-use assets

2 unchanged sentences

Accounts receivable

20,788 103,235

( 2,425 ) 171

Prepaid expenses and other current assets

Accounts payable and accrued expenses

( 12,768 ) ( 102,524 )

Lease liability, net

( 206 ) ( 195 )

Other assets and liabilities

2 unchanged sentences

Purchases of property and equipment

( 478 ) ( 729 )

Payment for acquisition, net of cash acquired

Net cash and cash equivalents used in investing activities

( 8,706 ) ( 729 )

Cash flows from financing activities

Purchase of treasury stock

( 1,493 ) ( 883 )

Borrowings under credit facilities

1 unchanged sentence

Repayments of borrowings under term loan

( 145 ) ( 138 )

Dividends paid

1 unchanged sentence

Net cash and cash equivalents used in financing activities

( 2,717 ) ( 5,346 )

Effect of foreign exchange rate on cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents at beginning of period

36,563 29,778

Cash and cash equivalents at end of period

$ 41,775 $ 32,461

Supplementary disclosure of cash flow information:

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

March 31, 2026

June 30, 2026

(Amounts in tables in thousands, except share and per share amounts)

21 unchanged sentences

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.

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05 is permitted.

The Company adopted this ASU for the

three months ended

March 31, 2026.

The Company has evaluated the impact of ASU

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The Company has determined that, given (i) the nature of its receivables (primarily receivables from customers on credit terms), (ii) its historical credit-loss experience and collection patterns, and (iii) its allowance methodology, adoption of ASU

not expected to have a material effect on the Company's consolidated financial position.

not have a material effect on the Company's consolidated financial position.

In November 2024, the FASB issued ASU No.

17 unchanged sentences

Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled.

The net sales from our foreign operations for the three months ended March 31, 2026 and 2025 were $ 33.0 million and $ 31.0 million, respectively.

The net sales from our foreign operations for the three months ended June 30, 2026 and 2025 were $ 39.0 million and $ 42.7 million, respectively.

The net sales from our foreign operations for the six months ended June 30, 2026 and 2025 were $ 72.0 million and $ 73.7 million, respectively.

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product.

3 unchanged sentences

The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions.

The Company recognized an unrealized gain of less than $ 0.1 million on contracts outstanding during the three months ended March 31, 2026 and 2025, respectively, which is included in foreign currency transaction gain (loss) in the Consolidated Statements of Earnings.

The Company recognized an unrealized gain of less than $ 0.1 million on contracts outstanding during the three months ended June 30, 2026 and 2025, respectively, which is included in foreign currency transaction gain (loss) in the Consolidated Statements of Earnings.

Comprehensive Income:

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If the standalone selling price is not observable through established standard prices, we use judgement and estimate the standalone selling price considering available information such as market pricing and pricing related to similar products.

Deferred revenue is attributable to contracts with customers where billings occurred prior to satisfaction of performance obligations and revenue recognition.

As of December 31, 2025, there was no balance of deferred revenue.

During the three months ended March 31, 2026, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2025.

As of March 31, 2026, the balance of deferred revenue was $ 12.3 million.

The deferred revenue balance of $ 12.3 million as of March 31, 2026, is comprised of $ 9.1 million in accrued expenses and other current liabilities and $ 3.2 million in other non-current liabilities.

During the three months ended March 31, 2025, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2024.

During the three and six months ended June 30, 2026, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2025.

As of June 30, 2026, the balance of deferred revenue was $ 12.0 million.

The deferred revenue balance of $ 12.0 million as of June 30, 2026, is comprised of $ 12.0 million in accrued expenses and other current liabilities.

During the three and six months ended June 30, 2025, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2024.

The Company pays commissions and related payroll taxes to sales personnel when customers are invoiced.

These costs are recorded as selling, general and administrative expenses in the period earned as all our performance obligations are complete within a short window of processing the order.

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 société anonyme, for an aggregate purchase price of approximately €8.0 million (equivalent to $ 9.4 million USD), adjusted upwards for $ 3.5 million in net working capital adjustment resulting in a final purchase consideration $ 13 million.

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 société 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 Company’s reach into these geographies.

1 unchanged sentence

The acquisition was funded utilizing cash from the Company’s balance sheet.

The financial position and operating results of Interworks is included in the Company's consolidated financial statements from the date of the acquisition.

The Company recorded net revenue for Interworks of approximately $ 0.6 million and net income of approximately $ 0.1 million during the three months ended March 31, 2026.

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 acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred is depicted in the table below.

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Inputs used to value these intangible assets include the discount rate, projection of all future cash flows, long-term growth rates, vendor attrition rates and applicable income tax rates.

Non-current liabilities are comprised of approximately $ 1.1 million of loans and credit facilities that were subsequently repaid in full following the acquisition closing and there were no outstanding balances as of March 31, 2026.

Pro Forma Results (unaudited)

The following unaudited pro forma financial information summarizes the results of operations for the three months ended March 31, 2026 and 2025 as if the acquisition of Interworks had been completed as of the beginning of the three months ended March 31, 2026 and 2025, respectively.

The following unaudited pro forma financial information summarizes the results of operations for the three and six months ended June 30, 2026 and 2025, as if the acquisition of Interworks had been completed as of the beginning of the three and six months ended June 30, 2026 and 2025, respectively.

The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect income taxes at a rate consistent with the tax rates of the local jurisdictions.

As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on the basis assumed above, nor are they indicative of the results of future combined periods.

Six months ended

Three months ended

$ 183,137 $ 138,826

$ 3,407 $ 3,642

Goodwill and Other Intangible Assets:

The following table summarizes the changes in the carrying amount of goodwill for the three months ended March 31, 2026 :

The following table summarizes the changes in the carrying amount of goodwill for the six months ended June 30, 2026 :

Balance December 31, 2025

$ 27,829 $ 9,009 $ 36,838

Goodwill acquired

$ 5,818 $ — 5,818

Translation adjustments

Balance March 31, 2026

( 568 ) ( 142 ) ( 710 )

Balance June 30, 2026

$ 33,079 $ 8,867 $ 41,946

Information related to the Company’s other intangibles, net is as follows:

As of March 31, 2026

As of June 30, 2026

Customer and vendor relationships

$ 51,192 $ 16,989 $ 34,203

$ 51,701 $ 17,181 $ 34,520

As of December 31, 2025

Customer and vendor relationships

$ 46,084 $ 14,195 $ 31,889

$ 46,601 $ 14,373 $ 32,228

Customer relationships are amortized o ver thirteen years.

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Trade name is amortized over fifteen ye ars.

During the three months ended March 31, 2026 and 2025 , the Company recognized total amortization expense for other intangibles, net of $ 1.5 million and $ 1.3 million, respectively.

Estimated future amortization expense of the Company’s other intangibles, net as of March 31, 2026 is as follows:

2026 (excluding the three months ended March 31, 2026)

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 Company’s other intangibles, net as of June 30, 2026 is as follows:

2026 (excluding the six months ended June 30, 2026)

Right-of-use Asset and Lease Liability:

8 unchanged sentences

Information related to the Company’s ROU assets and related lease liabilities are as follows:

Three months ended

Six months ended

Cash paid for operating lease liabilities

2 unchanged sentences

Weighted-average discount rate

Maturities of lease liabilities as of March 31, 2026 were as follows:

2026 (excluding the three months ended March 31, 2026)

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

2026 (excluding the six months ended June 30, 2026)

imputed interest

3 unchanged sentences

Total lease liabilities

The carrying amounts of financial instruments, including cash and cash equivalents, short-term accounts receivable, accounts payable and term loan approximated fair value at March 31, 2026 and December 31, 2025 because of the relative short maturity of these instruments.

The carrying amounts of financial instruments, including cash and cash equivalents, short-term accounts receivable, accounts payable and term loan approximated fair value at June 30, 2026 and December 31, 2025 because of the relative short maturity of these instruments.

The Company’s accounts receivable long-term are discounted to their present value at prevailing market rates at the time of sale.

4 unchanged sentences

Less accumulated depreciation and amortization

During the three months ended March 31, 2026 and 2025 , the Company recorded depreciation and amortization expense of $ 0.5 million and $ 0.4 million, respectively.

During the three months ended June 30, 2026 and 2025 , the Company recorded depreciation and amortization expense of $ 0.5 million and $ 0.4 million, respectively.

During the six months ended June 30, 2026 and 2025 , the Company recorded depreciation and amortization expense of $ 1.0 million and $ 0.8 million, respectively.

In limited circumstances, the Company offers extended payment terms to customers for periods of 12 to 36 months.

6 unchanged sentences

current portion included in accounts receivable

The undiscounted cash flows to be received by the Company relating to these accounts receivable long-term is expected to be $ 1.3 million, $ 0.9 million and $ 0.4 million, respectively, during each of the 12 -month periods ending March 31, 2026, 2027 and 2028.

The undiscounted cash flows to be received by the Company relating to these accounts receivable long-term is expected to be $ 0.9 million, $ 0.9 million and $ 0.4 million, respectively, during each of the 12 -month periods ending June 30, 2027, 2028 and 2029.

Credit Facility:

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All outstanding loans issued pursuant to the Credit Agreement become due and payable, on May 18, 2028.

During the three months ended March 31, 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 March 31, 2026 and December 31, 2025 .

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 Rate.

2 unchanged sentences

The Credit Agreement contains customary affirmative covenants, such as financial statement and collateral reporting requirements.

The Credit Agreement also contains customary negative covenants that limit the ability of the Company to, among other things, incur indebtedness, create liens or permit encumbrances, make certain restricted payments (including stock repurchases or the payment of cash dividends), or undergo certain fundamental changes.

Additionally, under certain circumstances, the Company is required to maintain a minimum fixed charge coverage ratio.

2 unchanged sentences

The proceeds from the Term Loan were used to fund certain capital expenditures.

The borrowing under the Term Loan bears interest at a rate of 3.73 % per annum and is being repaid over forty-eight monthly installments of principal and interest through March 2026.

At March 31, 2026 , there were no amounts outstanding under the Term Loan and there are no future principal payments.

The borrowing under the Term Loan bears interest at a rate of 3.73 % per annum and was repaid over forty-eight monthly installments of principal and interest through March 2026.

At June 30, 2026 , there were no amounts outstanding under the Term Loan and there are no future principal payments.

At December 31, 2025 , the Company had $ 0.2 million outstanding under the Term Loan.

6 unchanged sentences

A reconciliation of the numerators and denominators of the basic and diluted per share, as adjusted for the Stock Split, computations follows:

Six months ended

Three months ended

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Major Customers and Vendors:

The Company had no major vendors during the three months ended March 31, 2026 , compared to one major vendor that accounted for 13 % of total purchases during the three months ended March 31, 2025 .

The Company had two major customers that accounted for 26 % and 17 %, respectively, of its net sales during the three months ended March 31, 2026 , and 26 % and 13 %, respectively, of its net sales during the three months ended March 31, 2025 .

These same customers, respectively, accounted for 13 % and 15 % of total net accounts receivable as of March 31, 2026, and 1 % and 15 % of total net accounts receivable as of December 31, 2025 .

The Company had no major vendors during the three months ended June 30, 2026 and 2025 , and no major vendors during the six months ended June 30, 2026 and 2025 .

The Company had three major customers that accounted for 21 %, 14 %, and 13 %, respectively, of its net sales during the three months ended June 30, 2026 , and 24 %, 13 %, and 20 %, respectively, of its net sales during the three months ended June 30, 2025 .

The Company had three major customers that accounted for 19 %, 13 %, and 20 %, respectively, of its net sales during the six months ended June 30, 2026 , and 25 %, 13 %, and 13 %, respectively, of its net sales during the six months ended June 30, 2025 .

These same customers, respectively, accounted for 19 %, 8 %, and 9 % of total net accounts receivable as of June 30, 2026, and 15 %, 8 %, and 1 % of total net accounts receivable as of December 31, 2025 .

Income Taxes:

2 unchanged sentences

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 March 31, 2026 and 2025 , the Company recorded a provision for income taxes of $ 0.8 million and $ 0.6 million, respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 was 20.1 % and 13.3 %, respectively.

The change in effective tax rate for the three months ended March 31, 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 benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

During the three months ended March 31, 2026 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.4 million, which reduced our effective tax rate by 10.5 %.

During the three months ended March 31, 2025 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.5 million, which reduced our effective tax rate by 10.7 %.

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 benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

During the three months ended June 30, 2026 , a net tax benefit was not recognized relating to share-based compensation.

During the three months ended June 30, 2025 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.2 million, which reduced our effective tax rate by 2.6 %.

During the six months ended June 30, 2026 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.5 million, which reduced our effective tax rate by 3.9 %.

During the six months ended June 30, 2025 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.7 million, which reduced our effective tax rate by 5.9 %.

Stockholders ’ Equity and Stock Based Compensation:

The 2021 Omnibus Incentive Plan (the “2021 Plan”) authorizes the grant of Stock Options, Restricted Stock Units, Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Bonuses and other equity-based awards.

The 2021 Plan was approved by the Company’s stockholders at the 2021 Annual Meeting in June 2021.

The tota l number of shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”) initially available for award under the 2021 Plan was 2,000,000 shares, as adjusted for the Stock Split.

As of March 31, 2026 , the number of shares of Common Stock available for future award grants to employees, officers and directors under the 2021 Plan is 356,540 , as adjusted for the Stock Split.

During the three months ended March 31, 2026 , the Company granted a total of 88,748 Restricted Stock Units to officers.

During the three months ended March 31, 2026 , a total of 3,776 Restricted Stock Units were forfeited.

During the three months ended March 31, 2025 , the Company granted a total of 7,624 Restricted Stock Units to an officer.

During the three months ended March 31, 2025 , a total of 48,172 Restricted Stock Units were forfeited.

A summary of nonvested Restricted Stock Unit awards, as adjusted for the Stock Split, outstanding under the 2021 Plan as of March 31, 2026 , and changes during the three months then ended is as follows:

The Company’s stockholders approved the Climb Global Solutions, Inc.

2021 Omnibus Incentive Plan (the “2021 Plan”) in June 2021.

On June 2, 2026, the Company’s 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 Company’s 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 , a total of 61,884 Restricted Stock Units were forfeited.

A summary of nonvested Restricted Stock Unit awards, as adjusted for the Stock Split, outstanding under the Amended 2021 Plan as of June 30, 2026 , and changes during the six months then ended is as follows:

Average Grant

3 unchanged sentences

Forfeited in 2026

Nonvested shares at March 31, 2026

As of March 31, 2026 , there is approximate ly $ 3.3 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements.

The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 y ears.

During the three months ended March 31, 2026 and 2025 , the Company recognized share-based compensation expense of $ 1.4 million and $ 1.3 million, respectively.

Nonvested shares at June 30, 2026

As of June 30, 2026 , there is approximately $ 6.6 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements.

The unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.5 years.

During the three months ended June 30, 2026 and 2025 , the Company recognized share-based compensation expense of $ 1.6 million and $ 1.2 million, respectively.

During the six months ended June 30, 2026 and 2025 , the Company recognized share-based compensation expense of $ 2.9 million and $ 2.5 million, respectively.

Commitments and Contingencies

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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 executive’s 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.

As of March 31, 2026 , the Company has no standby letters of credit, has no standby repurchase obligations or other commercial commitments.

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 Facility).

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The following segment reporting information of the Company is provided:

Six months ended

Three months ended

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Corporate Assets

Geographic areas and net sales mix related to operations for the three months ended March 31, 2026 and 2025 were as follows.

Geographic areas and net sales mix related to operations for the three and six months ended June 30, 2026 and 2025 were as follows.

Revenue is allocated to a geographic area based on the location of the sale, which is generally the customer’s country of domicile.

Six months ended

Three months ended

March 31, 2026

June 30, 2026

United Kingdom

4 unchanged sentences

Total net sales

Six months ended

Three months ended

March 31, 2025

June 30, 2025

United Kingdom

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Includes net sales from third -party maintenance, software support and services.

Geographic identifiable assets related to operations as of March 31, 2026 and December 31, 2025 were as follows.

Geographic identifiable assets related to operations as of June 30, 2026 and December 31, 2025 were as follows.

Identifiable Assets by Geographic Areas

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Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

This following information should be read in conjunction with the consolidated financial statements and the notes included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes, and Management ’ s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company ’ s Annual Report on Form 10-K filed with the SEC on for the fiscal year ended December 31, 2025.

In addition to historical information, the following discussion contains certain forward-looking information.

5 unchanged sentences

We market these products through creative marketing communications, including our web sites, local seminars, webinars, social media, direct e-mail, and printed materials.

We have subsidiaries in the United States, Canada, Netherlands, United Kingdom, Ireland, Germany, and Greece through which sales are made.

We have subsidiaries in the United States, Canada, Netherlands, United Kingdom, Ireland, Germany, Greece, and South Africa through which sales are made.

Factors Influencing Our Financial Results

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Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases.

Total dividends paid and the dollar value of the shares repurchased were $0.0 million and $1 .5 million, for the three months ended March 31, 2026 and 2025, respectively, and $0.8 million and $0.9 million, for the three months ended March 31, 2025, respectively.

Total dividends paid and the dollar value of the shares repurchased were $0.0 million and $0.1 million for the three months ended June 30, 2026, respectively, and $0.8 million and $0.5 million, for the three months ended June 30, 2025, respectively.

Following the end of fiscal year 2025, our Board of Directors determined to suspend quarterly cash dividends on our Common Stock beginning with the first quarter of 2026 in order to preserve financial flexibility and prioritize capital allocation objectives.

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Financial Overview

Net sales increased 32%, or $44.4 million, to $182.4 million f or the three months ended March 31, 2026 compared to $138.0 million for the same period in the prior year.

Gross profit increased 13%, or $3.1 million, to $26.5 milli on for the three months ended March 31, 2026, compared to $23.4 million for the same period in the prior year.

Selling, general and administrative (“SG&A”) expens es increased 21%, or $3.5 million, to $20.3 mill ion for the three months ended March 31, 2026 compared to $16.8 million for the same period in the prior year.

Depreciation and amortizatio n expense increased 18%, or $0.3 million, to $2.0 mil lion for the three months ended March 31, 2026 compared to $1.7 million for the same period in the prior year.

Net inco me decreased 10%, or $0.4 million, to $3.3 mi llion for the three months ended March 31, 2026 compared to $3.7 million for the same period in the prior year.

Diluted income per share decreased 10%, or $0.02 to $0.18 for the three months ended March 31, 2026 compared to $0.20 for the same period in the prior year.

Net sales increased 9%, or $14.9 million, to $174.2 million for the three months ended June 30, 2026 compared to $159.3 million for the same period in the prior year.

Gross profit increased 15%, or $3.9 million, to $30.2 million for the three months ended June 30, 2026, compared to $26.3 million for the same period in the prior year.

Selling, general and administrative (“SG&A”) expenses increased 26%, or $4.3 million, to $20.7 million for the three months ended June 30, 2026 compared to $16.4 million for the same period in the prior year.

Depreciation and amortization expense increased 5%, or $0.1 million, to $2.1 million for the three months ended June 30, 2026 compared to $2.0 million for the same period in the prior year.

Net income decreased 8%, or $0.4 million, to $5.5 million for the three months ended June 30, 2026 compared to $5.9 million for the same period in the prior year.

Diluted income per share decreased 8%, or $0.03 to $0.30 for the three months ended June 30, 2026 compared to $0.33 for the same period in the prior year.

Critical Accounting Policies and Estimates

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The Company recognized an unrealized gain of less than $0.1 million on contracts outstanding during the three months ended March 31, 2026 and 2025, respectively, which is included in foreign currency transaction loss in the Consolidated Statements of Earnings.

The Company recognized an unrealized gain of less than $0.1 million on contracts outstanding during the three months ended June 30, 2026 and 2025, respectively, which is included in foreign currency transaction loss in the Consolidated Statements of Earnings.

Recently Issued Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11, "Interim Reporting (Topic 270):

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.

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2025-05, “ Financial Instruments - Credit Losses (Topic 326):

Measurements of Credit Losses for Accounts Receivable and Contact Assets ” .

Measurements of Credit Losses for Accounts Receivable and Contract Assets ” .

The update amends the guidance in ASC 326-20 to introduce a practical expedient when estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

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2025-05 is permitted.

The Company adopted this ASU for the three months ended March 31, 2026.

The Company has evaluated the impact of ASU No.

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2025-05 is not expected to have a material effect on the Company's consolidated financial position.

2025-05 did not have a material effect on the Company's consolidated financial position.

In November 2024, the FASB issued ASU No.

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This comparison of financial results is not necessarily indicative of future results:

Six months ended

Three months ended

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GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

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Three months ended

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We believe gross billings and gross billings margin will aid investors in the same manner.

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Three months ended

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We consider gross profit growth and effective margin to be key metrics in evaluating our business.

During the three months ended March 31, 2026, gross profit increased 13%, or $3.1 million, to $26.5 million compared to $23.4 million for the same period in the prior year, while effective margin decreased to 29.9% compared to 32.7% for the same period in the prior year.

On February 24, 2026, we completed the acquisition of Interworks for an aggregate purchase price of approximately €8.0 million (equivalent to $9.4 million USD), adjusted upwards for $3.5 million in net working capital adjustment resulting in a final purchase consideration $13 million.

During the three months ended June 30, 2026, gross profit increased 15%, or $3.9 million, to $30.2 million compared to $26.3 million for the same period in the prior year, while effective margin decreased to 37.5% compared to 43.3% for the same period in the prior year.

During the six months ended June 30, 2026, gross profit increased 14%, or $7.0 million, to $56.7 million compared to $49.7 million for the same period in the prior year, while effective margin decreased to 33.9% compared to 38.3% for the same period in the prior year.

Acquisitions

On February 24, 2026, we completed the acquisition of Interworks 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.

The operating results of Interworks are included in our operating results from the date of acquisition within our Distribution segment.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Net Sales and Gross Billings

Net sales for the three months ended March 31, 2026 increased 32%, or $44.4 million, to $182.4 million compared to $138.0 million for the same period in the prior year.

Gross billings, an operational metric, for the thre e months ended March 31, 2026 increased 14%, or $68.2 million, to $542.8 million compared to $474.6 million for the same period in the prior year.

Net sales and gross billings both increased due to organic growth from our existing vendor partnersh ips.

Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods.

During the three months ended March 31, 2026 , gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the three months ended March 31, 2025 , gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the three months ended March 31, 2026 increased 34%, or $44.9 million, to $177.1 million compared to $132.2 million for the same period in the prior year.

Gross billings for the Distribution segment for the three months ended March 31, 2026 increased 15%, or $67.3 million, to $520.9 million compared to $453.6 million for the same period in the prior year.

Net sales for the three months ended June 30, 2026 increased 9%, or $14.9 million, to $174.2 million compared to $159.3 million for the same period in the prior year.

Gross billings, an operational metric, for the thre e months ended June 30, 2026 increased 17%, or $86.7 million, to $587.3 million compared to $500.6 million for the same period in the prior year.

Net sales and gross billings both increased due to organic growth from our existing vendor partnersh ips and the Interworks acquisition.

Interworks contributed approximately $1.5 million of net sales during the quarter;

excluding Interworks, net sales increased by approximately $13.4 million.

Interworks contributed approximately $8.2 million of gross billings during the quarter.

Gross billings increased at a higher rate than net sales due to differences in the product mix between the two periods.

During the three months ended June 30, 2026, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during the three months ended June 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Distribution segment net sales for the three months ended June 30, 2026 increased 10%, or $14.8 million, to $167.8 million compared to $153.0 million for the same period in the prior year.

Gross billings for the Distribution segment for the three months ended June 30, 2026 increased 18%, or $85.8 million, to $562.9 million compared to $477.0 million for the same period in the prior year.

Net sales increased organically at a lesser rate than gross billings increased due to the impact of security, maintenance, and cloud products sales recognized during the current period, which are recorded on a net basis.

Solutions segment net sales for the three months ended June 30, 2026, increased 3%, or $0.1 million, to $6.4 million compared to $6.3 million for the same period in the prior year.

Gross billings for the Solutions segment for the three months ended June 30, 2026 increased 4%, or $0.9 million, to $24.4 million compared to $23.5 million for the same period in the prior year.

Net sales increased organically at a lesser rate than gross billings due to differences in the product mix between the two periods in our Solution segment.

The Company had three major customers that accounted for 21%, 14%, and 13%, respectively, of its total net sales during the three months ended June 30, 2026 and 24%, 13%, and 20%, respectively, of its total net sales during the three months ended June 30, 2025.

The Company had no major vendors during the three months ended June 30, 2026 and June 30, 2025, respectively.

Gross profit f or the three months ended June 30, 2026 increased 15%, or $3.9 million, to $30.2 million compared to $26.3 million for the same period in the prior year.

Gross profit increased due to organic growth from our existing vendor partnerships and a $1.0 million contribution from the Interworks acquisition.

Distribution segment gross profit for the three months ended June 30, 2026 increased 13%, or $3.0 million, to $26.0 million compared to $23.0 million for the same period in the prior year.

The increase reflects the previously noted organic growth from existing vendor partnerships and a $1.0 million contribution from the Interworks acquisition.

Solutions segment gross profit for the three months ended June 30, 2026 increased 27%, or $0.9 million, to $4.2 million compared to $3.3 million for the same period in the prior year.

This increase was driven by higher gross profit margins generated in both North American and Europe.

Customer rebates and discounts for the three months ended June 30, 2026 were $6.4 million compared to $6.3 million for the same period in the prior year.

Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Vendor rebates and discounts for the three months ended June 30, 2026 were $5.2 million compared to $5.5 million for the same period in the prior year.

Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors.

The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Selling, General and Administrative Expenses

SG&A expenses for the three months ended June 30, 2026 increased 26%, or $4.3 million, to $20.7 million compared to $16.4 million for the same period in the prior year.

This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, targeted investments to drive organic growth from new vendors and in the Company's infrastructure to support long-term growth initiatives, and a $0.7 million contribution from the Interworks acquisition.

SG&A expenses were 3.5% of gross billings for the three months ended June 30, 2026, compared to 3.3% for the same period in the prior year.

The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended June 30, 2026, increased 5%, or $0.1 million, to $2.1 million compared to $2.0 million for the same period in the prior year, primarily due to increased amortization for the vendor relationship intangible acquired through the Interworks acquisition.

Acquisition Related Costs

Acquisition related costs for the three months ended June 30, 2026 and 2025 were less than $0.1 million, respectively.

These expenses in the current period relate to costs incurred with the acquisition of Interworks, while these expenses in the same period in the prior year relate to exploratory acquisition-related initiatives.

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items.

As a result, our estimated tax rate is adjusted each quarter.

For 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.

The effective tax rate for the three 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 benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

A net tax benefit was not recognized relating to shared-based compensation during the three months ended June 30, 2026.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.2 million, which reduced our effective tax rate by 2.6% during the three months ended June 30, 2025.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

Net Sales and Gross Billings

Net sales for the six months ended June 30, 2026 increased 20%, or $59.3 million, to $356.6 million compared to $297.3 million for the same period in the prior year.

Gross billings, an operational metric, for the six months ended June 30, 2026 increased 16%, or $154.9 million, to $1.1 billion, compared to $975.1 million for the same period in the prior year.

Net sales and gross billings both increased due to organic growth from our existing vendor partnerships and the Interworks acquisition.

Interworks contributed approximately $2.1 million of net sales for the period from acquisition through June 30, 2026;

excluding Interworks, net sales increased by approximately $57.2 million.

Interworks contributed approximately $12.1 million of gross billings for the period from acquisition through June 30, 2026.

Gross billi ngs increased at a lesser rate than net sales due to differences in the product mix between the two periods.

During the six months ended June 30, 2026 , gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the six months ended June 30, 2025 , gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the six months ended June 30, 2026 increased 21%, or $59.7 million, to $344.9 million compared to $285.2 million for the same period in the prior year.

Gross billings for the Distribution segment for the six months ended June 30, 2026 increased 17%, or $154.9 million, to $1.1 billion, compared to $930.6 million for the same period in the prior year.

Net sales increased organically at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis.

Solutions segment net sales for the three months ended March 31, 2026, decreased 10%, or $0.6 million, to $5.3 million compared to $5.9 million for the same period in the prior year.

Gross billings for the Solutions segment for the three months ended March 31, 2026 increased 4%, or $0.9 million, to $21.9 million compared to $21.0 million for the same period in the prior year.

Solutions segment net sales for the six months ended June 30, 2026, decreased 4%, or $0.4 million, to $11.7 million compared to $12.1 million for the same period in the prior year.

Gross billings for the Solutions segment for the six months ended June 30, 2026 increased 4%, or $1.8 million, to $46.3 million compared to $44.5 million for the same period in the prior year.

Net sales decreased despite the increase in gross billings due to differences in the product mix between the two periods in our Solution segment.

The Company had two major customers that accounted for 26% and 17%, respectively, of its total net sales during the three months ended March 31, 2026 and 26% and 13%, resp ectively, of its total net sales during the three months ended March 31, 2025.

The Company had no major vendors during the three months ended March 31, 2026 , compared to one major vendor that accounted for 13% of total purchases during the three months ended March 31, 2025.

Gross profit f or the three months ended March 31, 2026 increased 13%, or $3.1 million, to $26.5 million compared to $23.4 million for the same period in the prior year.

Gross profit increased due to organic growth from our existing vendor partnerships.

Distribution segment gross profit for the three months ended March 31, 2026 increased 15%, or $3.0 million, to $23.4 million compared to $20.4 million for the same period in the prior year.

The increase reflects the previously noted organic growth from existing vendor partnerships, partially offset by higher other rebates and discounts offered to our customers as a percentage of gross billings.

Solutions segment gross profit for the three months ended March 31, 2026 increased 5%, or $0.1 million, to $3.1 million compared to $3.0 million for the same period in the prior year.

The Company had three major customers that accounted for 19%, 13%, and 20%, respectively, of its total net sales during the six months ended June 30, 2026 and 25%, 13%, and 13% respectively, of its total net sales during the six months ended June 30, 2025.

The Company had no major vendors during the six months ended June 30, 2026 and June 30, 2025, respectively.

Gross profit f or the six months ended June 30, 2026 increased 14%, or $7.0 million, to $56.7 million compared to $49.7 million for the same period in the prior year.

Gross profit increased due to organic growth from our existing vendor partnerships and a $1.4 million contribution from the Interworks acquisition.

Distribution segment gross profit for the six months ended June 30, 2026 increased 14%, or $5.9 million, to $49.3 million compared to $43.4 million for the same period in the prior year.

The increase reflects the previously noted organic growth from existing vendor partnerships and a $1.4 million contribution from the Interworks acquisition, partially offset by higher other rebates and discounts offered to our customers as a percentage of gross billings.

Solutions segment gross profit for the six months ended June 30, 2026 increased 17%, or $1.0 million, to $7.3 million compared to $6.3 million for the same period in the prior year.

This increase was driven by higher gross profit margins generated in both North American and Europe.

Customer rebates and discounts for the three months ended March 31, 2026 were $6.8 million compared to $4.6 million for the same period in the prior year.

Customer rebates and discounts for the six months ended June 30, 2026 were $13.1 million compared to $10.9 million for the same period in the prior year.

Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Vendor rebates and discounts for the three months ended March 31, 2026 were $2.3 million compared to $4.7 million for the same period in the prior year.

Vendor rebates and discounts for the six months ended June 30, 2026 were $7.5 million compared to $10.3 million for the same period in the prior year.

Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors.

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Selling, General and Administrative Expenses

SG&A expenses for the three months ended March 31, 2026 increased 21%, or $3.5 million, to $20.3 million compared to $16.8 million for the same period in the prior year.

This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, as well as one-time investments to drive organic growth from new vendors and in the Company's infrastructure to support long-term growth initiatives.

SG&A expenses were 3.7% of gross billings for the three months ended March 31, 2026, compared to 3.5% for the same period in the prior year.

SG&A expenses for the six months ended June 30, 2026 increased 24%, or $8.0 million, to $41.0 million compared to $33.1 million for the same period in the prior year.

This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, one-time investments to drive organic growth from new vendors and in the Company's infrastructure to support long-term growth initiatives, and a $0.9 million contribution from the Interworks acquisition.

SG&A expenses were 3.6% of gross billings for the six months ended June 30, 2026, compared to 3.4% for the same period in the prior year.

The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended March 31, 2026, increased 18%, or $0.3 million, to $2.0 million compared to $1.7 million for the same period in the prior year, primarily due to increased amortization for a vendor relationship acquired through a prior year acquisition.

The Company received notice of termination of its distribution agreement from this vendor during the first quarter of 2025 and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Depreciation and amortization expense for the six months ended June 30, 2026, increased 9%, or $0.3 million, to $4.0 million compared to $3.7 million for the same period in the prior year, primarily due to increased amortization for the vendor relationship intangible acquired through the Interworks acquisition.

Acquisition Related Costs

Acquisition related costs for the three months ended March 31, 2026 and 2025 were $0.3 million and $0.1 million, respectively.

These expenses in the current period relate to costs incurred with the acquisition of Interworks, while these expenses in the same period in the prior year relate to a previously completed acquisition.

Acquisition related costs for the six months ended June 30, 2026 and 2025 were $0.3 million and $0.1 million, respectively.

As a result, our estimated tax rate is adjusted each quarter.

For the three months ended March 31, 2026 and 2025, the Company recorded a provision for income taxes of $0.8 million and $0.6 million, respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 was 20.1% and 13.3%, respectively.

The effective tax rate for the three months ended March 31, 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 benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.4 million, which reduced our effective tax rate by 10.5% during the three months ended March 31, 2026.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.5 million, which reduced our effective tax rate by 10.7% during the three months ended March 31, 2025.

For 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 effective tax rate for the 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 benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.7 million, which reduced our effective tax rate by 5.9% during the six months ended June 30, 2025.

Liquidity and Capital Resources

Our cash and cash equivalents as of March 31, 2026 increased 14%, or $5.2 million, to $41.8 million compared to $36.6 million as of December 31, 2025.

Net cash and cash equivalents provided by operating activities for the three months ended March 31, 2026 was $16.9 million, comprised primarily of net income adjusted for non-cash items of $6.7 million, partially offset by changes in operating assets and liabilities of $10.2 million.

Net cash and cash equivalents used in investing activities during the three months ended March 31, 2026 was $8.7 million, comprised primarily of the payment for the Interworks acquisition.

Net cash and cash equivalents used in financing activities during the three months ended March 31, 2026 was $2.8 million, comprised of repayments under credit facilities of $10.1 million, purchases of treasury stock of $1.5 million, and repayments of borrowings under term loan of $0.2 million, partially offset by borrowings under credit facilities of $9.0 million.

The Company had a short-term operating need during the three months ended March 31, 2026, that resulted in $9.0 million of borrowings under credit facilities, which was subsequently repaid in full during the three months ended March 31, 2026.

Our cash and cash equivalents as of June 30, 2026 increased 55%, or $20.0 million, to $56.6 million compared to $36.6 million as of December 31, 2025.

Net cash and cash equivalents provided by operating activities for the six months ended June 30, 2026 was $32.2 million, comprised primarily of net income adjusted for non-cash items of $7.0 million and changes in operating assets and liabilities of $16.4 million.

Net cash and cash equivalents used in investing activities during the six months ended June 30, 2026 was $9.2 million, comprised primarily of the payment for the Interworks acquisition.

Net cash and cash equivalents used in financing activities during the six months ended June 30, 2026 was $2.9 million, comprised of repayments under credit facilities of $10.1 million, purchases of treasury stock of $1.6 million, and repayments of borrowings under term loan of $0.2 million, partially offset by borrowings under credit facilities of $9.0 million.

The Company had a short-term operating need during the six months ended June 30, 2026, that resulted in $9.0 million of borrowings under credit facilities, which was subsequently repaid in full during the six months ended June 30, 2026.

On May 18, 2023, the Company entered into a revolving credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

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All outstanding loans issued pursuant to the Credit Agreement become due and payable, on May 18, 2028.

There were no amounts outstanding under the Credit Agreement as of March 31, 2026.

There were no amounts outstanding under the Credit Agreement as of June 30, 2026.

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc.

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The proceeds from the Term Loan was used to fund certain capital expenditures.

The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through March 2026.

As of March 31, 2026, the Company had no amounts outstanding under the Term Loan.

The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and was repaid over forty-eight monthly installments of principal and interest through March 2026.

As of June 30, 2026, the Company had no amounts outstanding under the Term Loan.

We anticipate that our working capital needs will increase as we invest in the growth of our business.

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Dollar exchange rate.

Off-Balance Sheet Arrangements

As of March 31, 2026, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934, as amended.

Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the Company’s market-risk exposures from those disclosed under “Item 7A.

Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements