HUDSON TECHNOLOGIES INC /NY Leases Disclosure

Note 6 - Leases

The Company has various lease agreements with terms up to 11 years, including leases of buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. common area maintenance, charges, utilities and property taxes). The Company elected the package of practical expedients permitted under the transition guidance, which allows it to carry forward its historical lease classification, its assessment on whether a contract contains a lease, and its initial direct costs for any leases that existed prior to the adoption of the new standard. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated income statements on a straight line basis over the lease term. The Company’s lease agreements do not contain any material residual value, guarantees or material restrictive covenants.

Operating leases are included in Right of use asset, Accrued expenses and other current liabilities, and Long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

The Company has operating leases primarily for real estate in the United States. Of these leases, the three most significant are for the Company’s headquarters in Woodcliff Lake, NJ, and its two main plants in Champaign, IL, and Smyrna, GA.

The Woodcliff Lake lease had an initial term of 68 months, which was subsequently extended to 72 months on December 6, 2022, and expires on December 31, 2027 with annual escalations. The Woodcliff Lake lease also has an option to extend it for an additional five

years and has an option to terminate, neither of which are included in the right of use asset calculation. The Champaign lease had an initial term of 35 months, which was most recently extended on September 27, 2024 to 18 years and 11 months, and expires on December 31, 2027 with annual escalations. If the termination option is not exercised, the Champaign lease will automatically continue under the same terms and conditions until December 31, 2027. The Smyrna lease had an initial term of 10 years, which was most recently extended on June 29, 2016 to 25 years, expires on June 30, 2030 with annual escalations.

The Company measured the lease liability based on the present value of the future lease payments, discounted using the estimated incremental borrowing rate of 7.75% for Champaign, 7.75% for Woodcliff Lake, and 8.99% for Smyrna, which represents the interest rate that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments at initial commencement.

The real estate operating leases are included in “Right-of-use assets” on the Company’s consolidated balance sheets and represent the Company’s right to use the underlying assets for the lease term. The Company’s obligations to make lease payments are included in “Accrued expenses and other current liabilities” and “Long-term lease liabilities” on the Company’s consolidated balance sheets.

Operating lease expense of $1.9 million, $1.9 million and $1.7 million, for the years ended December 31, 2025, 2024 and 2023, respectively, is included in Selling, general and administrative expenses on the consolidated income statements.

The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of December 31, 2025.

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Balance Sheet Classification

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Other Information

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Supplemental cash flow and non-cash information related to leases

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