What changed in this filing

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Item 1. Business

2021-03-08 compared with 2020-03-09 · 239 added, 476 removed, 60 unchanged (92% of the section changed)

Headquartered in Salt Lake City, Utah,

Clarus Corporation (which may be referred to as the “Company,” “Clarus,” “we,” “our”

or “us”), a company focused on the outdoor and consumer industries, is seeking opportunities to acquire and grow businesses

that can generate attractive shareholder returns.

The Company has net operating tax loss carryforwards which it is seeking to redeploy

to maximize shareholder value.

Clarus’ primary business is as a leading designer, developer, manufacturer and distributor

of outdoor equipment and lifestyle products focused on the climb, ski, mountain, sport and skincare markets.

The Company’s

products are principally sold under the Black Diamond®, Sierra®, PIEPS®

and SKINourishment®

brand names through

outdoor specialty and online retailers, distributors and original equipment manufacturers throughout the U.S.

Headquartered in Salt Lake City, Utah, Clarus Corporation (which may be referred to as the “Company,” “Clarus,” “we,” “our” or “us”), a company focused on the outdoor and consumer industries, is seeking opportunities to acquire and grow businesses that can generate attractive shareholder returns.

The Company has net operating tax loss carryforwards which it is seeking to redeploy to maximize shareholder value.

Clarus’ primary business is as a leading designer, developer, manufacturer and distributor of outdoor equipment and lifestyle products focused on the climb, ski, mountain, sport and skincare markets.

The Company’s products are principally sold under the Black Diamond®, Sierra®, Barnes®, PIEPS® and SKINourishment® brand names through outdoor specialty and online retailers, distributors and original equipment manufacturers throughout the U.S.

and internationally.

Through our Black Diamond, PIEPS, and SKINourishment

brands, we offer a broad range of products including:

high-performance, activity-based apparel (such as shells, insulation, midlayers,

pants and logowear);

rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets,

and ice-climbing gear);

Through our Black Diamond, PIEPS, and SKINourishment brands, we offer a broad range of products including:

high-performance, activity-based apparel (such as shells, insulation, midlayers, pants and logowear);

rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear);

technical backpacks and high-end day packs;

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and skincare and other sport-enhancing products.

We also offer advanced skis, ski poles, ski skins, and snow safety products, including

avalanche airbag systems, avalanche transceivers, shovels, and probes.

Through our Sierra brand, we manufacture a wide range of

high-performance bullets and ammunition for both rifles and pistols that are used for precision target shooting, hunting and military

and law enforcement purposes.

Clarus Corporation, incorporated in Delaware

in 1991, acquired Black Diamond Equipment, Ltd.

(“Black Diamond Equipment”) in May 2010 and changed its name to Black

Diamond, Inc.

We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes.

Through our Sierra and Barnes brands, we manufacture a wide range of high-performance bullets and ammunition for both rifles and pistols that are used for precision target shooting, hunting and military and law enforcement purposes.

Clarus, incorporated in Delaware in 1991, acquired Black Diamond Equipment, Ltd.

(“Black Diamond Equipment”) in May 2010 and changed its name to Black Diamond, Inc.

in January 2011.

In October 2012, we acquired PIEPS Holding GmbH and its subsidiaries (collectively, “PIEPS”).

On August 14, 2017, the Company changed

its name from Black Diamond, Inc.

to Clarus Corporation and its stock ticker symbol from “BDE” to “CLAR”

on the NASDAQ stock exchange.

On August 14, 2017, the Company changed its name from Black Diamond, Inc.

to Clarus Corporation and its stock ticker symbol from “BDE” to “CLAR” on the NASDAQ stock exchange.

On August 21, 2017, the Company acquired Sierra Bullets, L.L.C.

6, 2018, the Company acquired the assets of SKINourishment, Inc.

On November 6, 2018, the Company acquired the assets of SKINourishment, Inc.

(“SKINourishment”).

On May 7, 2018, the Company announced a

“modified Dutch auction” tender offer for Clarus’ common stock, as well as the preferred share purchase rights

associated with such shares (collectively, the “Shares”).

On July 11, 2018, the tender offer expired, following which

the Company announced it would accept 417,237 Shares for purchase at a price of $8.00 per Share, for an aggregate cost of approximately

$3,338,000, excluding fees and expenses.

On August 6, 2018, the Company announced

that its Board of Directors approved the initiation of a quarterly cash dividend program of $0.025 per share of the Company’s

common stock (the “Quarterly Cash Dividend”) or $0.10 per share on an annualized basis.

In 2019 and 2018, our total

Quarterly Cash Dividends were $2,987,000 and $1,488,000, respectively.

On January 24, 2020, the Company announced that its

Board of Directors approved the payment on February 14, 2020 of the Quarterly Cash Dividend to the record holders of shares of

the Company’s common stock as of the close of business on February 3, 2020.

On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”) for a purchase price of $30,500,000.

On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $0.025 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.10 per share on an annualized basis.

The declaration and payment of future dividends is subject to the discretion of and approval of the Company’s Board of Directors.

On May 1, 2020, the Company announced that, in light of the operational impact of the COVID-19 pandemic, its Board of Directors temporarily replaced its Quarterly Cash Dividend with a stock dividend (the “Quarterly Stock Dividend”).

In 2020, 2019 and 2018, our total Quarterly Cash Dividends were $1,520,000, $2,987,000 and $1,488,000, respectively.

In 2020, our total Quarterly Stock Dividends were $1,533,000.

On January 29, 2021, the Company announced that its Board of Directors approved the payment on February 19, 2021 of the Quarterly Cash Dividend to the record holders of shares of the Company’s common stock as of the close of business on February 8, 2021.

Impact of COVID-19

The global outbreak of COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S.

government in March 2020, with governments world-wide implementing safety measures restricting travel and requiring citizen lockdowns and self-confinements for quarantining purposes.

This has negatively affected the U.S.

and global economy, disrupted global supply chains, and resulted in significant transport restrictions and disruption of financial markets.

The impact of this pandemic has created significant uncertainty in the global economy and has affected our business, employees, retail and distribution partners, suppliers, and customers.

We experienced a decline in retail demand within our Black Diamond segment beginning in the second half of March 2020 through December 2020, which negatively impacted our sales and profitability for the first, second, third and fourth quarters of 2020.

We also expect a continued impact on the Company’s sales and profitability in future periods.

The duration of these trends and the magnitude of such impacts cannot be precisely estimated at this time, as they are affected by a number of factors (some of which are outside management’s control), including those presented in Item 1A.

Risk Factors.

We have mitigated some of the negative impacts to our operating results by taking significant actions to improve our current operating results and liquidity position, including drawing on the credit facility, suspending share repurchases, temporarily suspending cash dividends, postponing non-essential capital expenditures, reducing operating costs, modulating production in line with demand, and substantially reducing discretionary spending.

We will continue to adjust mitigation measures as needed related to health and safety.

Those measures have and might continue to include temporarily suspending manufacturing or retail operations, modifying workspaces, continuing social distancing policies, implementing new personal protective equipment or health screening policies at our facilities, or such other industry best practices needed to continue maintain a healthy and safe environment for our employees amidst the pandemic.

These countermeasures partially mitigated the impacts of COVID-19 on our full year 2020 financial results.

As the impact of the COVID-19 pandemic on the economy and our operations evolves, we will continue to assess the impact on the Company and respond accordingly.

Sustained adverse impacts to the Company, certain of its suppliers, dealers or customers may also affect the Company’s future cash flows, liquidity, and valuation of certain assets and therefore may increase the likelihood of an impairment charge, write-off, or reserve associated with such assets, including goodwill, indefinite and finite-lived intangible assets, property and equipment, inventories, accounts receivable, net deferred tax assets, and other assets.

Market Overview

Our primary target customers are outdoor-oriented

consumers who enjoy active, outdoor-focused lifestyles.

The users of our products are made up of a wide range of outdoor enthusiasts,

including climbers, mountaineers, trail runners, skiers, mountain bikers, backpackers and campers, competitive shooters, hunters

and other outdoor-inspired consumers.

We believe we have a strong reputation for innovation, style, quality, design, safety, and

durability in our core product lines.

As the variety of outdoor sports activities

continue to grow and proliferate, and existing outdoor sports evolve and become ever more specialized, we believe other outdoor

companies are failing to address the unique technical and performance needs of enthusiasts involved in such specialized activities.

We believe we have been able to help address this void in the marketplace by seeking to leverage our user intimacy and improving

on our existing product lines by expanding our product offerings into new niche categories and products, and by incorporating innovative

industrial design and engineering and performance tolerances into our products.

We believe the credibility and authenticity of

our brands expands our potential market beyond committed outdoor athletes to those outdoor generalist consumers who desire to lead

active, outdoor-focused lifestyles.

Our primary target customers are outdoor-oriented consumers who enjoy active, outdoor-focused lifestyles.

The users of our products are made up of a wide range of outdoor enthusiasts, including climbers, mountaineers, trail runners, skiers, mountain bikers, backpackers and campers, competitive shooters, hunters and other outdoor-inspired consumers.

We believe we have a strong reputation for innovation, style, quality, design, safety, and durability in our core product lines.

As the variety of outdoor sports activities continue to grow and proliferate, and existing outdoor sports evolve and become ever more specialized, we believe other outdoor companies are failing to address the unique technical and performance needs of enthusiasts involved in such specialized activities.

We believe we have been able to help address this void in the marketplace by seeking to leverage our user intimacy and improving on our existing product lines by expanding our product offerings into new niche categories and products, and by incorporating innovative industrial design and engineering and performance tolerances into our products.

We believe the credibility and authenticity of our brands expands our potential market beyond committed outdoor athletes to those outdoor generalist consumers who desire to lead active, outdoor-focused lifestyles.

Growth Strategies

Our growth strategies are to achieve sustainable,

profitable growth organically while seeking to expand our business through targeted, strategic acquisitions.

We intend to create

innovative new products, increase consumer and retailer awareness and demand for our products, and build stronger emotional brand

connections with consumers over time across a growing number of geographic markets.

Continue to Service and Grow Existing

We continue to seek to develop strong relationships with our key retail, distributor and original equipment manufacturer

(“OEM”) partners through a mutual respect and admiration for the sports we serve.

Through our various corporate initiatives,

a focus on being easy to do business with, the extension of our existing product portfolios, and an emphasis on quality, on-time

deliveries, brand awareness and marketing, we plan to grow our existing accounts as well as foster new relationships.

Our growth strategies are to achieve sustainable, profitable growth organically while seeking to expand our business through targeted, strategic acquisitions.

We intend to create innovative new products, increase consumer and retailer awareness and demand for our products, and build stronger emotional brand connections with consumers over time across a growing number of geographic markets.

Continue to Service and Grow Existing Accounts.

We continue to seek to develop strong relationships with our key retail, distributor and original equipment manufacturer (“OEM”) partners through a mutual respect and admiration for the sports we serve.

Through our various corporate initiatives, a focus on being easy to do business with, the extension of our existing product portfolios, and an emphasis on quality, on-time deliveries, brand awareness and marketing, we plan to grow our existing accounts as well as foster new relationships.

Broaden Distribution Footprint.

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The European alpine market is currently significantly larger than the U.S.

market and is highly fragmented by country,

with no clear leader across Europe.

We have been able to gain market share by emphasizing our Black Diamond brand, positioning

it as a global brand with American roots and PIEPS as a global brand with European roots.

We believe there is also a significant

opportunity to expand our Sierra brand more extensively outside the U.S.

market and is highly fragmented by country, with no clear leader across Europe.

We have been able to gain market share by emphasizing our Black Diamond brand, positioning it as a global brand with American roots and PIEPS as a global brand with European roots.

We believe there is also a significant opportunity to expand our Sierra and Barnes brands more extensively outside the U.S.

market through additional sales and marketing investments.

New Product Development and Innovation.

To drive organic growth within our existing businesses, we intend to leverage our strong brand names, customer relationships, proven

capacity to develop new innovative products and product extensions in each of our existing product categories, and to expand into

new product categories.

Our new technologies are generally inspired by our continuing commitment to maximize the enjoyment and

efficacy of the products for the outdoor sports for which we design.

To drive organic growth within our existing businesses, we intend to leverage our strong brand names, customer relationships, proven capacity to develop new innovative products and product extensions in each of our existing product categories, and to expand into new product categories.

Our new technologies are generally inspired by our continuing commitment to maximize the enjoyment and efficacy of the products for the outdoor sports for which we design.

Acquisition of Complementary Businesses.

We expect to target acquisitions as a viable opportunity to gain access to new product groups, customer channels, and increase

penetration of existing markets.

We expect to target acquisitions as a viable opportunity to gain access to new product groups, customer channels, and increase penetration of existing markets.

We may also pursue acquisitions that diversify the Company within the outdoor and consumer markets.

To the extent we pursue future acquisitions, we intend to focus on “super-fan” businesses with leading brands, recurring

revenue, sustainable margins and strong cash flow.

We anticipate financing future acquisitions prudently through a combination

of cash on hand, operating cash flow, bank financings, private placements and new capital markets offerings.

To the extent we pursue future acquisitions, we intend to focus on “super-fan” businesses with leading brands, recurring revenue, sustainable margins and strong cash flow.

We anticipate financing future acquisitions prudently through a combination of cash on hand, operating cash flow, bank financings, private placements and new capital markets offerings.

Competitive Strengths

Authentic Portfolio of Iconic Brands.

We believe that our brands are iconic among devoted, active-outdoor enthusiasts with a strong reputation for innovation,

style, quality, design, safety and durability.

Our Black Diamond brand traces its roots to 1957 and has continuously been synonymous

with the sports it serves.

Our PIEPS brand traces its history to 1967 and has come to represent premium alpine performance in emergency

Our Sierra brand was founded in 1947 and we believe represents the most precise and accurate bullets available for

the shooting enthusiast.

Our SKINourishment brand was founded in 2012, providing fully sustainable, synthetic-free, athlete tested,

performance-driven skincare products.

Our brands also appeal to everyday customers seeking high-quality products for outdoor or

urban and suburban living.

We believe that our brands are iconic among devoted, active-outdoor enthusiasts with a strong reputation for innovation, style, quality, design, safety and durability.

Our Black Diamond brand traces its roots to 1957 and has continuously been synonymous with the sports it serves.

Our PIEPS brand traces its history to 1967 and has come to represent premium alpine performance in emergency situations.

Our Sierra brand was founded in 1947 and we believe represents the most precise and accurate bullets and ammunition available for the shooting enthusiast.

Our Barnes brand was founded in 1932 and produces some of the most technologically advanced lead-free bullets and premium ammunition.

Our climbOn® brand included in SKINourishment was founded in 1996, providing fully sustainable, synthetic-free, athlete tested, performance-driven skincare products.

Our brands also appeal to everyday customers seeking high-quality products for outdoor or urban and suburban living.

Our focus on innovation, safety and style differentiates us from our competitors.

Black Diamond Equipment:

Black Diamond

Equipment is a global innovator in climbing, trail running, skiing and mountain sports equipment.

The brand is synonymous with

innovation, performance, safety and durability.

Headquartered in Salt Lake City at the base of the Wasatch Mountains, Black Diamond

products are created and tested locally on its alpine peaks, slopes, crags and trails.

Black Diamond's products are sold in approximately

50 countries around the world.

In 2019, Black Diamond Equipment received

over 70 editorial product awards.

Black Diamond’s engineering team introduced numerous award-winning products, with the Climb

category receiving 10 awards, Mountain category receiving 21 awards, Ski category winning 25 awards, and Apparel category winning

Across the Climb category, our airNET harness, designed in collaboration with Adam Ondra, notably earned Gear of the

Show from Outside Magazine at Outdoor Retailer Summer Show.

Meanwhile, the new Z4 camalot was recognized with Best in Show from

Gear Junkie and Gear Institute.

Climbing Magazine recognized the C4 camalot and the Ultralight Ice Screw with Editor’s Choice

Awards and Adventure Sports Network acknowledged Black Diamond Performance Footwear with Best Climbing Gear of 2019.

In the Mountain

category, the Distance Carbon Pole won an ISPO award while the Distance pack series won Editor’s Choice from Runner’s

World and Trail Sisters as well as a Fitness Award for Best Backpack from Self Magazine.

Gear Patrol awarded the lightest in market,

Cirrus 9 pack an Editor’s Choice award at Outdoor Retailer Summer Show and Black Diamond headlamps received Editor’s

Choice awards from Runner’s World, Popular Mechanics, and The Wirecutter.

For Ski, Black Diamond managed to secure Editor’s

choice awards for the Helio TM 95, Helio TM Recon 88, Helio TM Recon 105, Razor Carbon Pro Ski

Pole, JetForce®

Pro, and the Fritschi Tecton 12.

In the Apparel category, the Vision Down Parka won recognition for Best New

Gear or Editor’s Choice from five different titles and the Rhythm Tee was lauded as “The Only Running Tee I’ll

Ever Need.” Our gloves and rainwear also won Editor’s Choice recognition.

Headquartered in Lebring,

Steiermark, Austria, PIEPS is widely recognized as an innovator and technology leader in alpine sport and safety equipment, focused

on beacon technology (having created the modern avalanche transceiver) and avalanche safety equipment.

PIEPS offers a focused range

of premium avalanche safety products, including transceivers and probes, avalanche airbags, shovels, related equipment, and packs.

Black Diamond Equipment is a global innovator in climbing, trail running, skiing and mountain sports equipment.

The brand is synonymous with innovation, performance, safety and durability.

Headquartered in Salt Lake City at the base of the Wasatch Mountains, Black Diamond products are created and tested locally on its alpine peaks, slopes, crags and trails.

Black Diamond's products are sold in approximately 50 countries around the world.

In 2020, Black Diamond Equipment received over 125 product awards.

Black Diamond’s engineering team introduced award-winning products, with the Climb category receiving 21 awards, Mountain category receiving 40 awards, Ski category winning 29 awards and Apparel category winning 37 awards.

Across the Climb category, Black Diamond’s Vision MIPS climbing helmet, notably earned a Gear of the Show from Men’s Journal magazine at Outdoor Retailer’s Snow Show.

Climbing magazine also recognized the Vision MIPS climbing helmet, Technician approach shoes and Hot Forge Hybrid quickdraw with Editor’s Choice awards.

SNEWS recognized Black Diamond as one of the bestselling climbing equipment brands from its 2020 retailer survey.

In the Mountain category, Black Diamond’s traction launch earned Best in Show at Outdoor Retailer Snow Show, as well as collecting awards from Women’s Running, Women’s Health and Podium Runner magazines.

Black Diamond’s Distance 4 hydration vest won an Editor’s Choice from Runner’s World magazine while its Distance 8 and 15 packs were recognized by Outside and Trail Runner magazines.

Black Diamond headlamps and trekking poles collected nearly 20 product awards including media outlets like GearJunkie.com, OutdoorGearLab.com and Backpacker magazine.

For Ski, Black Diamond managed to secure Editor’s Choice awards from Backcountry, Freeskier, Powder and SKI magazines.

Products included Black Diamond gloves, avalanche transceivers, ski poles, climbing skins and JetForce avalanche airbags.

Award winning skis include the Helio Carbon 88, 95, 104, Cirque 84 and Boundary Pro 115.

In its Apparel category, Black Diamond earned an ISPO GOLD award for its Dawn Patrol Hybrid Hoody.

Backpacker magazine named the Dawn Patrol Hybrid Hoody the “Most Protective Softshell of 2020,” while Popular Mechanics called it one of the coolest products it saw at Outdoor Retailer.

In the Spring, Outside magazine named Black Diamond’s HighLine Stretch Shell as Gear of the Year.

Headquartered in Lebring, Steiermark, Austria, PIEPS is widely recognized as an innovator and technology leader in alpine sport and safety equipment, focused on beacon technology (having created the modern avalanche transceiver) and avalanche safety equipment.

PIEPS offers a focused range of premium avalanche safety products, including transceivers and probes, avalanche airbags, shovels, related equipment, and packs.

PIEPS is the official safety partner of the Association of Austrian Mountain and Ski Guides.

PIEPS played a key partnership role

with Black Diamond Equipment in development of the new JetForce®

avalanche airbag and Bluetooth beacon technology platforms.

Sierra is an iconic American

manufacturer of bullets.

Founded in 1947 and based in Sedalia, Missouri, Sierra manufactures a wide range of high-performance bullets

and ammunition for both rifles and pistols.

Sierra bullets are used for precision target shooting, hunting and military and law

enforcement purposes.

PIEPS played a key partnership role with Black Diamond Equipment in development of the new JetForce® avalanche airbag and Bluetooth beacon technology platforms.

SKINourishment:

SKINourishment offers

organic, 100% food-grade, plant-based skin products that are safe, effective, cruelty-free, non-GMO, vegetarian, and vegan, and

some are gluten free.

Its synthetic-free skincare products are made with food grade ingredients, are effective for adults, children

and animals, and use renewable resources.

Its products are sold under four brands—climbOn®, crossFIXE®, POLYN®

and POLYN®

SKINourishment offers organic, 100% food-grade, plant-based skin products that are safe, effective, cruelty-free, non-GMO, vegetarian, and vegan, and some are gluten free.

Its synthetic-free skincare products are made with food grade ingredients, are effective for adults, children and animals, and use renewable resources.

The most significant brand, climbOn®, has expanded the product line to include lotion bars, lotion crème, lip balm, soap, hand sanitizer, insect repellent, and muscle balm.

Founded in 1947 and headquartered in Sedalia, Missouri, Sierra Bullets has been dedicated to manufacturing the highest-quality, most accurate bullets and ammunition in the world.

From local and international shooting competitions to sport and hunting, Sierra offers best-in-class accuracy and precision that hunting and sport shooting enthusiasts have come to depend on.

This performance is born from a proprietary manufacturing process that enables the achievement of the tightest tolerances in the industry.

Sierra’s bullets and ammunition are used for precision target shooting, hunting and defense purposes.

In addition to a wide base of retailers, Sierra's customers include distributors, law enforcement and industry OEMs.

Sierra's products have cultivated a significant consumer following recognized by its iconic "green box"

packaging and include globally recognized bullet brands such as Sierra® MatchKing®, Sierra® GameKing®, and Sierra® BlitzKing® and ammunition brands such as GameChanger®, Prairie Enemy TM , Outdoor Master®, and Sport Master®.

Headquartered in Mona, Utah, Barnes Bullets has been an industry leader in bullet technology and innovation since 1932.

The company manufactures some of the world’s most technologically advanced lead-free bullets and premium hunting, self-defense and tactical ammunition.

Barnes has earned its strong reputation through unrivaled performance and results.

This reputation is defined by innovative design, advanced manufacturing techniques and a core focus on the end-user.

As a result, Barnes has generated a strong consumer following supported by its globally recognized bullet brands such as Barnes® TSX®, X Bullet®, Varmint Grenade®, and Expander® and ammunition brands VOR-TX® and TAC-XPD®.

With its products being sold through its online store, a variety of retailers and international distributors, Barnes’s customers include hunters, range shooters, military and law enforcement professionals around the world.

Strong Base of Business.

Our outdoor products business benefits from a strong reputation for paradigm-changing, high-quality, innovative products that make

us a leader in the outdoor industry with particular strength in product categories such as climbing, trail running, skiing, mountaineering

and shooting.

Underlying our innovative product lines is a strong stable of intellectual property, with multiple patents and patent

applications, as well as valuable brands and trademarks.

In addition, our user intimacy, strong retailer partnerships, operations

and execution acumen and leadership as a champion in the access, education, and stewardship issues that affect our customers contribute

to the robustness of our business.

Product Innovation and Development

Capabilities .

We have a long history of technical innovation and product development, with over 100 patents and patents

pending worldwide.

Our employees’ passion and intimacy with our core outdoor activities fosters new and innovative ideas

and products, which we believe provides a significant advantage that will drive our Company to new levels.

We seek to design products

that enhance our customers’ personal performance as they participate in the activities we serve.

We integrate quality assurance

and quality control teams throughout the entire design process to maintain the quality and integrity that our brands are known

We believe that our vertically integrated design, development process and enthusiastic employee base provide us with a unique

competitive advantage to continue to drive future innovation for our Company and the markets we serve.

Diversified Portfolio by Product,

Geography and Channel.

Our outdoor products business benefits from a strong reputation for paradigm-changing, high-quality, innovative products that make us a leader in the outdoor industry with particular strength in product categories such as climbing, trail running, skiing, mountaineering, hunting and competitive shooting.

Underlying our innovative product lines is a strong stable of intellectual property, with multiple patents and patent applications, as well as valuable brands and trademarks.

In addition, our user intimacy, strong retailer partnerships, operations and execution acumen and leadership as a champion in the access, education, and stewardship issues that affect our customers contribute to the robustness of our business.

Product Innovation and Development Capabilities .

We have a long history of technical innovation and product development, with over 100 patents and patents pending worldwide.

Our employees’ passion and intimacy with our core outdoor activities fosters new and innovative ideas and products, which we believe provides a significant advantage that will drive our Company to new levels.

We seek to design products that enhance our customers’ personal performance as they participate in the activities we serve.

We integrate quality assurance and quality control teams throughout the entire design process to maintain the quality and integrity that our brands are known for.

We believe that our vertically integrated design, development process and enthusiastic employee base provide us with a unique competitive advantage to continue to drive future innovation for our Company and the markets we serve.

Diversified Portfolio by Product, Geography and Channel.

Our business is highly diversified across products, geographies, and channels.

We operate a multi-brand

business with Black Diamond, PIEPS, Sierra, and SKINourishment branded products spanning 30 single product categories addressing

four primary categories of climbing, skiing, mountain, and sport.

There is no single product category that accounts for more than

15% of annual sales for the year ended December 31, 2019.

This provides seasonal diversification with a balance of sales across

both the fall/winter and spring/summer sports seasons.

Our brands are truly global with approximately 47% of our sales for the

year ended December 31, 2019 generated in over 50 countries outside the United States.

We believe that our product, geographic,

and distribution channel diversity allows us to maximize the reach of our brand portfolio while reducing the risk associated with

any single product category or point of distribution.

Experienced and Incentivized Senior

Management Team.

We operate a multi-brand business with Black Diamond, PIEPS, Sierra, Barnes and SKINourishment branded products spanning 34 single product categories addressing four primary categories of climbing, skiing, mountain, and sport.

Our bullet product category is the only product category that accounts for more than 15% of annual sales on a pro forma basis for the year ended December 31, 2020.

This provides seasonal diversification with a balance of sales across both the fall/winter and spring/summer sports seasons.

Our brands are truly global with approximately 61% of our sales on a pro forma basis for the year ended December 31, 2020 generated in over 50 countries outside the United States.

We believe that our product, geographic, and distribution channel diversity allows us to maximize the reach of our brand portfolio while reducing the risk associated with any single product category or point of distribution.

Experienced and Incentivized Senior Management Team.

The members of our Board of Directors and our executive officers, including Mr.

Warren Kanders, are substantial

stockholders of the Company, and beneficially own approximately 28% of our outstanding common stock as of March 4, 2020, which

we believe aligns the interests of our Board of Directors and our executive officers with that of our stockholders.

Warren Kanders, are substantial stockholders of the Company, and beneficially own approximately 28% of our outstanding common stock as of March 3, 2021, which we believe aligns the interests of our Board of Directors and our executive officers with that of our stockholders.

Growth-oriented Capital Structure.

Our capital structure provides us with the capacity to fund future growth and our net operating loss and tax credit carryforwards

are expected to offset our net taxable income, which is expected to allow us to retain cash flow for future growth.

Our capital structure provides us with the capacity to fund future growth and our net operating loss and tax credit carryforwards are expected to offset our net taxable income, which is expected to allow us to retain cash flow for future growth.

Operating Segments

We operate our business structure within

two segments.

These segments are defined based on the internal financial reporting used by management.

Certain significant selling

and general and administrative expenses are not allocated to the segments.

We operate our business structure within two segments.

These segments are defined based on the internal financial reporting used by our chief operating decision maker to allocate resources and assess performance.

Certain significant selling and general and administrative expenses are not allocated to the segments.

Each segment is described below:

Our Black Diamond segment, which includes Black Diamond Equipment, PIEPS, and SKINourishment, is

a global leader in designing, manufacturing, and marketing innovative outdoor engineered equipment and apparel for climbing, mountaineering,

trail running, backpacking, skiing, and a wide range of other year-round outdoor recreation activities.

Our Black Diamond segment

offers a broad range of products including:

high-performance, activity-based apparel (such as shells, insulation, midlayers, pants

and logowear);

rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets,

and ice-climbing gear);

 Our Black Diamond segment, which includes Black Diamond Equipment, PIEPS, and SKINourishment, is a global leader in designing, manufacturing, and marketing innovative outdoor engineered equipment and apparel for climbing, mountaineering, trail running, backpacking, skiing, and a wide range of other year-round outdoor recreation activities.

Our Black Diamond segment offers a broad range of products including:

high-performance, activity-based apparel (such as shells, insulation, midlayers, pants and logowear);

rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear);

technical backpacks and high-end day packs;

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and skincare and other sport-enhancing products.

We also offer advanced skis, ski poles, ski skins, and snow safety products, including

avalanche airbag systems, avalanche transceivers, shovels, and probes.

Our Sierra segment, which includes Sierra, is an iconic American manufacturer of a wide range of

high-performance bullets and ammunition for both rifles and pistols.

These bullets are used for precision target shooting, hunting

and military and law enforcement purposes.

See Note 15 to our consolidated and combined financial statements

for financial information regarding our segments.

Our products span 30 single product categories

and include a wide variety of technical outdoor equipment and lifestyle products for a wide range of outdoor enthusiasts, including

climbers, mountaineers, trail runners, skiers, backpackers and campers, competitive shooters, hunters and other outdoor-inspired

We design many of our products for extreme applications, such as high-altitude mountaineering, ice and rock climbing,

as well as backcountry skiing and alpine touring.

We also manufacturer high-quality bullets and ammunition with the tightest tolerances

in the industry that enhance the performance of competitive shooters and hunters.

We are also seeking to develop skincare products,

such as lotions, lip balm, and sunscreen, as well as sport-enhancing supplements, nutrition, and other products using natural,

organic or alternative ingredients.

We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes.

 Our Sierra segment, which includes Sierra and Barnes, includes two iconic American manufacturers of a wide range of high-performance bullets and ammunition for both rifles and pistols.

These bullets are used for precision target shooting, hunting and military and law enforcement purposes.

See Note 16 to our consolidated and combined financial statements for financial information regarding our segments.

Our products span 34 single product categories and include a wide variety of technical outdoor equipment and lifestyle products for a wide range of outdoor enthusiasts, including climbers, mountaineers, trail runners, skiers, backpackers and campers, competitive shooters, hunters and other outdoor-inspired consumers.

We design many of our products for extreme applications, such as high-altitude mountaineering, ice and rock climbing, as well as backcountry skiing and alpine touring.

We also manufacturer high-quality bullets and ammunition with the tightest tolerances in the industry that enhance the performance of competitive shooters and hunters.

We have also developed skincare products, such as lotions, lip balm, and sunscreen, as well as sport-enhancing supplements, nutrition, and other products using natural, organic or alternative ingredients.

Generally, we divide our product offerings into the following four primary categories:

Our climb line consists of apparel, footwear,

and equipment such as belay/rappel devices, bouldering products, carabiners, climbing packs, crampons, harnesses, ice axes, protection

devices, a bouldering line of technical apparel, and various other climbing accessories and skincare products.

Our climb line

represented approximately 31% of our sales during the year ended December 31, 2019.

Our mountain line consists of apparel, gloves,

packs, headlamps, lights, tents, trekking poles, and various other hiking and mountaineering accessories.

Our mountain line represented

approximately 34% of our sales during the year ended December 31, 2019.

Our ski line consists of technical apparel, avalanche

airbags, packs, bindings, poles, skis, snow gloves, avalanche safety devices, and other skiing accessories.

Our ski line represented

approximately 22% of our sales during the year ended December 31, 2019.

Our sport line consists of premium quality high-precision

bullets and ammunition used in competitive shooting, hunting and other applications and environments.

Our sport line represented

approximately 13% of our sales during the year ended December 31, 2019.

Our climb line consists of apparel, footwear, and equipment such as belay/rappel devices, bouldering products, carabiners, climbing packs, crampons, harnesses, ice axes, protection devices, a bouldering line of technical apparel, and various other climbing accessories and skincare products.

Our climb line represented approximately 26% of our sales on a pro forma basis during the year ended December 31, 2020.

Our mountain line consists of apparel, gloves, packs, headlamps, lights, tents, trekking poles, and various other hiking and mountaineering accessories.

Our mountain line represented approximately 26% of our sales on a pro forma basis during the year ended December 31, 2020.

Our ski line consists of technical apparel, avalanche airbags, packs, bindings, poles, skis, snow gloves, avalanche safety devices, and other skiing accessories.

Our ski line represented approximately 19% of our sales on a pro forma basis during the year ended December 31, 2020.

Our sport line consists of premium quality high-precision bullets and ammunition used in competitive shooting, hunting and other applications and environments.

Our sport line represented approximately 29% of our sales on a pro forma basis during the year ended December 31, 2020.

Product Design and Development

We conduct our product research, evaluation,

and design activities at our locations in Salt Lake City, Utah, Sedalia, Missouri, Lebring, Austria, and Wimberly, Texas.

We typically bring new products from concept

to market in approximately 18 to 36 months depending upon the technology integration and complexity of the product.

We work simultaneously

on product lines for the four subsequent selling seasons.

We expense research and development costs

as incurred in selling, general, and administrative expenses.

As of December 31, 2019, we had 82 employees dedicated to research

and development.

We market and distribute our products in

over 50 countries, primarily through independent specialty stores and specialty chains, premium sporting goods and outdoor recreation

stores, distributors and OEMs in the United States, Canada, Europe, Middle East, Asia, Australia, New Zealand, Africa, and South

Outside of North America and Europe, we sell our products through independent global distributors into specialty retail

We conduct our product research, evaluation, and design activities at our locations in Salt Lake City, Utah, Sedalia, Missouri, Mona, Utah, Lebring, Austria, and Wimberly, Texas.

We typically bring new products from concept to market in approximately 18 to 36 months depending upon the technology integration and complexity of the product.

We work simultaneously on product lines for the four subsequent selling seasons.

We expense research and development costs as incurred in selling, general, and administrative expenses.

As of December 31, 2020, we had 80 employees dedicated to research and development.

We market and distribute our products in over 50 countries, primarily through independent specialty stores and specialty chains, premium sporting goods and outdoor recreation stores, distributors and OEMs in the United States, Canada, Europe, Middle East, Asia, Australia, New Zealand, Africa, and South America.

Outside of North America and Europe, we sell our products through independent global distributors into specialty retail stores.

We also sell our products directly to customers through our various websites.

Our end users include a broad range of

consumers, including mountain, rock, ice, and gym climbers, winter-outdoor enthusiasts, trail runners, backpackers, competitive

shooters, hunters, and outdoor-inspired consumers.

Such consumers demand high-quality, reliable, and high-precision products to

enhance their performance and, in some cases, safety in a multitude of outdoor activities.

We expect to leverage our user intimacy,

engineering prowess, and design ability to expand into related technical product categories that target the same demographic group

and distribution channels.

During 2019, REI accounted for approximately

14% of our sales.

The loss of this customer could have a material adverse effect on us.

Our end users include a broad range of consumers, including mountain, rock, ice, and gym climbers, winter-outdoor enthusiasts, trail runners, backpackers, competitive shooters, hunters, and outdoor-inspired consumers.

Such consumers demand high-quality, reliable, and high-precision products to enhance their performance and, in some cases, safety in a multitude of outdoor activities.

We expect to leverage our user intimacy, engineering prowess, and design ability to expand into related technical product categories that target the same demographic group and distribution channels.

Sales and Marketing

Our sales force is generally deployed by

geographic region:

Our sales force is generally deployed by geographic region:

Canada, Europe, Asia Pacific, Latin America, and the United States.

Our focus is on providing our products to

a broad spectrum of outdoor enthusiasts.

Within each of our brands, we strive to create a unique look for our products and to communicate

those differences to the consumer.

Our focus is on providing our products to a broad spectrum of outdoor enthusiasts.

Within each of our brands, we strive to create a unique look for our products and to communicate those differences to the consumer.

In addition, we are continuously exploring uses for brand and market research.

We also regularly

utilize various promotions and public relations campaigns.

We have consistently established relationships

with professional athletes and influencers to help evaluate, promote and establish product performance and authenticity with customers.

Such brand endorsers are one of many elements in our array of marketing materials, including instore displays, catalogs, workbooks,

social media, and digital campaigns via our websites.

Manufacturing, Sourcing, Quality Assurance

and Distribution

We also regularly utilize various promotions and public relations campaigns.

We have consistently established relationships with professional athletes and influencers to help evaluate, promote and establish product performance and authenticity with customers.

Such brand endorsers are one of many elements in our array of marketing materials, including instore displays, catalogs, workbooks, social media, and digital campaigns via our websites.

Manufacturing, Sourcing, Quality Assurance and Distribution

Manufacturing

Our objective is to deliver on-time the

highest quality of products in the safest and most cost-efficient manner.

Our culture of continuous improvement and implementation

of industry best practices, allows us to continue to increase productivity, reduce costs, and bring new innovative products to

The Black Diamond Equipment and PIEPS manufacturing

and distribution operations are ISO 9001–2015 certified and are audited annually by an independent certifying agency to ensure

Black Diamond Equipment’s and PIEPS’ quality management systems meet the requirements of ISO 9001–2015, and to

ensure that Black Diamond Equipment’s and PIEPS’ certified products meet all necessary performance certification requirements.

Sierra employs a best-in-class proprietary manufacturing process with respect to each one of its products.

This process is performed

in-house and includes control of bullet jacket wall concentricity utilizing strict quality control standards overseen by experienced

employees, yielding what we believe to be the tightest tolerances in the industry.

We manufactured approximately 20% to 25%

of our products, including nearly all climbing hard goods and bullets, in our facilities in the United States.

The remaining approximately

75% to 80% of our products are also manufactured to our specifications in third-party, independently-owned facilities.

employees and agents on-site or via regular visits at these third-party, independently-owned facilities to ensure that our products

are manufactured to meet our specifications.

While we do not maintain a long-term manufacturing contract with those facilities,

we believe that our long-term relationships with them will help to ensure that a sufficient supply of goods built to our specification

are available in a timely manner and on satisfactory economic terms in the future.

We source raw materials and components

from a variety of suppliers.

Our primary raw materials include copper, lead, aluminum, steel, nylon, corrugated cardboard for packaging,

metal, plastic and electrical components, and various textiles, foams, and fabrics.

The raw materials and components used to manufacture

our products are generally available from numerous suppliers in quantities sufficient to meet normal requirements.

We source packaging materials both domestically

as well as from sources in Asia and Europe.

We believe that all of our purchased products and materials could be readily obtained

from alternative sources at comparable costs.

Our objective is to deliver on-time the highest quality of products in the safest and most cost-efficient manner.

Our culture of continuous improvement and implementation of industry best practices, allows us to continue to increase productivity, reduce costs, and bring new innovative products to the market.

The Black Diamond Equipment and PIEPS manufacturing and distribution operations are ISO 9001–2015 certified and are audited annually by an independent certifying agency to ensure Black Diamond Equipment’s and PIEPS’ quality management systems meet the requirements of ISO 9001–2015, and to ensure that Black Diamond Equipment’s and PIEPS’ certified products meet all necessary performance certification requirements.

Sierra and Barnes are members of the Sporting Arms & Ammunition Manufacturers’ Institute and employ best-in-class proprietary manufacturing processes with respect to each one of its products.

These processes are performed in-house and includes control of bullet jacket wall concentricity utilizing strict quality control standards overseen by experienced employees, yielding what we believe to be the tightest tolerances in the industry.

We manufactured approximately 30% to 35% of our products, including nearly all protection devices for climbing and all bullets, in our facilities in the United States.

The remaining approximately 65% to 70% of our products are also manufactured to our specifications in third-party, independently-owned facilities.

We keep employees and agents on-site or via regular visits at these third-party, independently-owned facilities to ensure that our products are manufactured to meet our specifications.

While we do not maintain a long-term manufacturing contract with those facilities, we believe that our long-term relationships with them will help to ensure that a sufficient supply of goods built to our specification are available in a timely manner and on satisfactory economic terms in the future.

We source raw materials and components from a variety of suppliers.

Our primary raw materials include copper, lead, aluminum, steel, nylon, corrugated cardboard for packaging, metal, plastic and electrical components, and various textiles, foams, and fabrics.

The raw materials and components used to manufacture our products are generally available from numerous suppliers in quantities sufficient to meet normal requirements.

We source packaging materials both domestically as well as from sources in Asia and Europe.

We believe that all of our purchased products and materials could be readily obtained from alternative sources at comparable costs.

Quality Assurance

Quality assurance at the Company has two

primary functions:

The first is to ensure that the products that we design

and develop are manufactured to meet or exceed the Company’s own standards and international regulatory standards.

involves creating inspection documentation, reviewing manufacturing processes with our various vendor-partners, and inspecting

finished product to assure it meets the rigorous standards required by our customers.

These activities take place globally, wherever

our products are manufactured.

The second function is to provide real and meaningful

input to the new product development process.

Quality assurance professionals interact closely with the design and engineering

teams and bring knowledge and expertise to the design process, ensuring that the products we bring to market truly meet the criteria

established when a new product is envisioned.

The engineering prowess of the quality

assurance group is a core competency that the Company seeks to leverage across all product lines and brands.

Quality assurance at the Company has two primary functions:

 The first is to ensure that the products that we design and develop are manufactured to meet or exceed the Company’s own standards and international regulatory standards.

This involves creating inspection documentation, reviewing manufacturing processes with our various vendor-partners, and inspecting finished product to assure it meets the rigorous standards required by our customers.

These activities take place globally, wherever our products are manufactured.

 The second function is to provide real and meaningful input to the new product development process.

Quality assurance professionals interact closely with the design and engineering teams and bring knowledge and expertise to the design process, ensuring that the products we bring to market truly meet the criteria established when a new product is envisioned.

The engineering prowess of the quality assurance group is a core competency that the Company seeks to leverage across all product lines and brands.

Global Distribution

Our distribution model allows us to ship

a broad cross-section of our product line in smaller quantities to our own global distribution centers and to those of our Independent

Global Distributors (IGD) more frequently and at lower transportation and logistics costs.

Because of the diversity of our product

offerings, we compete by niche with a variety of companies.

Our products must stand up to the high standards set by the end users

in each category where quality, durability and performance are paramount.

We believe our products compete favorably on the basis

of product innovation, product performance, marketing support, and price.

The popularity of various outdoor

activities and changing design trends affect the desirability of our products.

Therefore, we seek to anticipate and respond

to trends and shifts in consumer preferences by adjusting the mix of available product offerings by developing new products

with innovative performance features and designs, and by marketing our products in a persuasive and memorable fashion to

drive consumer awareness and demand.

Failure to anticipate or respond to consumer needs and preferences in a timely and

adequate manner could have a material adverse effect on our sales and profitability.

We compete with niche, privately-owned

companies as well as a number of brands owned by large, multinational companies, such as those set forth below.

Our climbing products and accessories, such as

apparel, footwear, protection, carabiners, helmets, and harnesses, compete with products from companies such as La Sportiva, Prana,

Patagonia, Petzl, CAMP, EDELRID, and Mammut.

Our mountaineering products and accessories,

such as backpacks, trekking poles, headlamps, and tents, compete with products from companies such as Petzl, Deuter, Leki, Komperdell,

Marmot, Mountain Hardwear, Hestra, Osprey, Salomon, and The North Face.

Our skiing products and accessories, such as technical

apparel, skis, poles, avalanche airbags and transceivers, compete with products from competitors such as Arc’Teryx, Backcountry

Access, Dynafit (Salewa), Atomic, Mammut, Marker, Ortovox, Salomon, Scarpa, Scott, and Volkl.

We sell both bullets and ammunition to both retailers

and distributors for sale to consumers but also supply bullets to OEMs who also sometimes manufacture bullets as well.

Such companies

include Vista, Nammo, Hornady, Fiocchi, Olin, and Remington.

In addition, in certain categories we compete

with certain of our large wholesale customers who focus on the outdoor market, such as REI, Mountain Equipment Co-op and Decathlon,

which manufacture, market and distribute their own climbing, mountaineering, and skiing products under their own private labels.

Our distribution model allows us to ship a broad cross-section of our product line in smaller quantities to our own global distribution centers and to those of our Independent Global Distributors (IGD) more frequently and at lower transportation and logistics costs.

Because of the diversity of our product offerings, we compete by niche with a variety of companies.

Our products must stand up to the high standards set by the end users in each category where quality, durability and performance are paramount.

We believe our products compete favorably on the basis of product innovation, product performance, marketing support, and price.

The popularity of various outdoor activities and changing design trends affect the desirability of our products.

Therefore, we seek to anticipate and respond to trends and shifts in consumer preferences by adjusting the mix of available product offerings by developing new products with innovative performance features and designs, and by marketing our products in a persuasive and memorable fashion to drive consumer awareness and demand.

Failure to anticipate or respond to consumer needs and preferences in a timely and adequate manner could have a material adverse effect on our sales and profitability.

We compete with niche, privately-owned companies as well as a number of brands owned by large, multinational companies, such as those set forth below.

Our climbing products and accessories, such as apparel, footwear, protection, carabiners, helmets, and harnesses, compete with products from companies such as La Sportiva, Prana, Patagonia, Petzl, CAMP, EDELRID, and Mammut.

Our mountaineering products and accessories, such as backpacks, trekking poles, headlamps, and tents, compete with products from companies such as Petzl, Deuter, Leki, Komperdell, Marmot, Mountain Hardwear, Hestra, Osprey, Salomon, and The North Face.

Our skiing products and accessories, such as technical apparel, skis, poles, avalanche airbags and transceivers, compete with products from competitors such as Arc’Teryx, Backcountry Access, Dynafit (Salewa), Atomic, Mammut, Marker, Ortovox, Salomon, Scarpa, Scott, and Volkl.

We sell both bullets and ammunition to both retailers and distributors for sale to consumers but also supply bullets to OEMs who also sometimes manufacture bullets as well.

Such companies include Vista (Federal Ammunition, CCI, and Remington), Nammo, Hornady, Fiocchi, and Olin (Winchester).

In addition, in certain categories we compete with certain of our large wholesale customers who focus on the outdoor market, such as REI, Mountain Equipment Co-op and Decathlon, which manufacture, market and distribute their own climbing, mountaineering, and skiing products under their own private labels.

Intellectual Property

We believe our registered and pending word

and icon trademarks worldwide, including the Black Diamond and Diamond “C” logos, Black Diamond®, ATC ®, Camalot®,

AvaLung ®, FlickLock®, Ascension™, Time is Life®, Hexentric®, Stopper®, Dawn Patrol®, Bibler®,

“Use.Design.Build.Engineer.Repeat”™, Sierra®, Sierra®

MatchKing®, Sierra®

GameKing®, Sierra®

BlitzKing®

and PIEPS®, create international brand recognition for our products.

Solely for convenience, our trademarks

and tradenames referred to in this report may appear without the ®

and ™ symbols, but those references are not intended

to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable

licensor to these trademarks and tradenames.

We believe our brands have an established

reputation for innovation, style, quality, design, safety, and durability, and accordingly, we actively monitor and police our

brands against infringement to ensure their viability and enforceability.

In addition to trademarks, we hold over

100 patents and patents pending worldwide for a wide variety of technologies across our product lines.

Our success with our proprietary products

is generally derived from our “first mover” advantage in the market as well as our commitment to protecting our current

and future proprietary technologies and products, which acts as a deterrent to infringement of our intellectual property rights.

While we believe our patent and trademark protection policies are robust and effective, if we fail to adequately protect our intellectual

property rights, competitors may manufacture and market products similar to ours.

Our principal intellectual property rights include

our patents and trademarks but also include products containing proprietary trade secrets and manufacturing know-how.

We cannot be sure that we will receive

patents for any of our patent applications or that any existing or future patents that we receive or license will provide competitive

advantages for our products.

While we actively monitor our competitors to ensure that we do not compromise the intellectual property

of others, we cannot be sure that competitors will not challenge, invalidate or void the application of any existing or future

patents that we receive or license.

In addition, patent rights may not prevent our competitors from developing, using or selling

products that are in similar product niches as ours.

The Company’s products are outdoor

activity-based, which results in seasonal variations in sales and profitability.

On a calendar year basis, we generally experience

our greatest sales in the first and second quarters for certain of our products including rock climbing gear, footwear, and harnesses,

and in the third and fourth quarters for our ski, glove, ice climbing and snow safety products.

Sales of these products may be

negatively affected by unfavorable weather conditions and other market trends.

During 2019, the fall/winter season represents approximately

53% of our sales while spring/summer represents approximately 47% of our sales.

Sales of other products such as headlamps, lanterns,

trekking poles, packs and bullets are generally balanced throughout the year.

Working capital requirements vary throughout

Working capital generally increases to support peak shipping periods and then generally decreases during the second quarter

of the year as accounts receivable are collected.

We believe our registered and pending word and icon trademarks worldwide, including the Black Diamond and Diamond “C” logos, Black Diamond®, ATC ®, Camalot®, AvaLung ®, FlickLock®, Ascension™, Time is Life®, Hexentric®, Stopper®, Dawn Patrol®, Bibler®, “Use.Design.Build.Engineer.Repeat”®, Sierra®, Sierra® MatchKing®, Sierra® GameKing®, Sierra® BlitzKing®, Barnes®, TSX®, X Bullet®, VOR-TX® and PIEPS®, create international brand recognition for our products.

Solely for convenience, our trademarks and tradenames referred to in this report may appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.

We believe our brands have an established reputation for innovation, style, quality, design, safety, and durability, and accordingly, we actively monitor and police our brands against infringement to ensure their viability and enforceability.

In addition to trademarks, we hold over 100 patents and patents pending worldwide for a wide variety of technologies across our product lines.

Our success with our proprietary products is generally derived from our “first mover” advantage in the market as well as our commitment to protecting our current and future proprietary technologies and products, which acts as a deterrent to infringement of our intellectual property rights.

While we believe our patent and trademark protection policies are robust and effective, if we fail to adequately protect our intellectual property rights, competitors may manufacture and market products similar to ours.

Our principal intellectual property rights include our patents and trademarks but also include products containing proprietary trade secrets and manufacturing know-how.

We cannot be sure that we will receive patents for any of our patent applications or that any existing or future patents that we receive or license will provide competitive advantages for our products.

While we actively monitor our competitors to ensure that we do not compromise the intellectual property of others, we cannot be sure that competitors will not challenge, invalidate or void the application of any existing or future patents that we receive or license.

In addition, patent rights may not prevent our competitors from developing, using or selling products that are in similar product niches as ours.

The Company’s products are outdoor activity-based, which results in seasonal variations in sales and profitability.

On a calendar year basis, we generally experience our greatest sales in the first and second quarters for certain of our products including rock climbing gear, footwear, and harnesses, and in the third and fourth quarters for our ski, glove, ice climbing and snow safety products.

Sales of these products may be negatively affected by unfavorable weather conditions and other market trends.

During 2020, the fall/winter season represents approximately 61% of our sales on a pro forma basis while spring/summer represents approximately 39% of our sales on a pro forma basis.

Sales of other products such as headlamps, lanterns, trekking poles, packs and bullets are generally balanced throughout the year.

Working capital requirements vary throughout the year.

Working capital generally increases to support peak shipping periods and then generally decreases during the second quarter of the year as accounts receivable are collected.

Environmental Matters

Our operations are subject to federal,

state, and local environmental, health and safety laws and regulations, including those that impose workplace standards and regulate

the discharge of pollutants into the environment and establish standards for the handling, generation, emission, release, discharge,

treatment, storage, and disposal of materials and substances including solid and hazardous wastes.

We believe that we are in material

compliance with such laws and regulations.

Further, the cost of maintaining compliance has not, and we believe in the future, will

not have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

to the nature of our operations and the frequently changing nature of environmental compliance standards and technology, we cannot

predict with any certainty that future material capital or operating expenditures will not be required in order to comply with

applicable environmental laws and regulations.

As of December 31, 2019, we had over 500

employees worldwide.

We have not experienced any work stoppages or employee-related slowdowns and believe that our relationship

with employees is satisfactory.

Our operations are subject to federal, state, and local environmental, health and safety laws and regulations, including those that impose workplace standards and regulate the discharge of pollutants into the environment and establish standards for the handling, generation, emission, release, discharge, treatment, storage, and disposal of materials and substances including solid and hazardous wastes.

We believe that we are in material compliance with such laws and regulations.

Further, the cost of maintaining compliance has not, and we believe in the future, will not have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Due to the nature of our operations and the frequently changing nature of environmental compliance standards and technology, we cannot predict with any certainty that future material capital or operating expenditures will not be required in order to comply with applicable environmental laws and regulations.

As of December 31, 2020, we had over 600 employees worldwide.

We have not experienced any work stoppages or employee-related slowdowns and believe that our relationship with employees is satisfactory.

Executive Officers of the Registrant

The executive officers of our Company as

of December 31, 2019 are as follows:

Kanders , 62, our Executive

Chairman, has served as one of our directors since June 2002 and as Executive Chairman of our Board of Directors since December

The executive officers of our Company as of December 31, 2020 are as follows:

Kanders , 63, our Executive Chairman, has served as one of our directors since June 2002 and as Executive Chairman of our Board of Directors since December 2002.

Since 1990, Mr.

Kanders has served as the President of Kanders & Company, Inc., a private investment firm principally

owned and controlled by Mr.

Kanders has served as the President of Kanders & Company, Inc., a private investment firm principally owned and controlled by Mr.

Kanders, which makes investments in and provides consulting services to public and private entities.

From January 1996 until its sale to BAE Systems plc on July 31, 2007, Mr.

Kanders served as the Chairman of the Board of Directors,

and from April 2003 as the Chief Executive Officer, of Armor Holdings, Inc., formerly a New York Stock Exchange-listed company

and a manufacturer and supplier of military vehicles, armored vehicles, and safety and survivability products and systems to the

aerospace and defense, public safety, homeland security, and commercial markets.

Kanders served as the Chairman of the Board of Directors, and from April 2003 as the Chief Executive Officer, of Armor Holdings, Inc., formerly a New York Stock Exchange-listed company and a manufacturer and supplier of military vehicles, armored vehicles, and safety and survivability products and systems to the aerospace and defense, public safety, homeland security, and commercial markets.

Kanders received an A.B.

degree in Economics

from Brown University.

Walbrecht , 52, has served

as the President of the Company since October 2017, and President of BDEL since October 2016.

degree in Economics from Brown University.

Walbrecht , 53, has served as the President of the Company since October 2017, and President of BDEL since October 2016.

Before joining the Company, Mr.

served as the President of Mountain Hardwear from March 2016 to October 2016.

Walbrecht served as the President of Mountain Hardwear from March 2016 to October 2016.

Prior to Mountain Hardwear, Mr.

Walbrecht served

as the President and Chief Executive Officer of Fenix Outdoors NA from January 2012 until March 2016.

Walbrecht has also served

in various senior roles with Brandbase, Spyder, Dr.

Walbrecht served as the President and Chief Executive Officer of Fenix Outdoors NA from January 2012 until March 2016.

Walbrecht has also served in various senior roles with Brandbase, Spyder, Dr.

Martens/Airwair, and Timberland.

Walbrecht holds a Master of Business Administration

and a Bachelor of Science in Economics from Brigham Young University, a Bachelor of Arts in Marketing from the University of Maryland

and understudies in International Trade and Finance at Cambridge University - Trinity College.

Kuehne , 41, has served

as our Chief Financial Officer, Secretary and Treasurer, since 2013 and as our Chief Administrative Officer since May 2016.

Kuehne previously served as the Company’s interim Chief Financial Officer, in addition to serving as its Vice President of

Finance, principal financial officer and principal accounting officer.

Walbrecht holds a Master of Business Administration and a Bachelor of Science in Economics from Brigham Young University, a Bachelor of Arts in Marketing from the University of Maryland and understudies in International Trade and Finance at Cambridge University - Trinity College.

Kuehne , 42, has served as our Chief Financial Officer, Secretary and Treasurer, since 2013 and as our Chief Administrative Officer since May 2016.

Kuehne previously served as the Company’s interim Chief Financial Officer, in addition to serving as its Vice President of Finance, principal financial officer and principal accounting officer.

Before joining the Company in September 2010, Mr.

served as the Corporate Controller of Certiport from August 2009 to September 2010.

Kuehne served as the Corporate Controller of Certiport from August 2009 to September 2010.

From July 2004 to August 2009, Mr.

Kuehne served

in various capacities with KPMG LLP, most recently as Audit Manager.

Kuehne served in various capacities with KPMG LLP, most recently as Audit Manager.

Kuehne received an M.B.A.

degree from the University of

Utah – David Eccles School of Business in 2004 and graduated with a Bachelor of Arts degree in Accounting from University

of Utah – David Eccles School of Business in 2002.

degree from the University of Utah – David Eccles School of Business in 2004 and graduated with a Bachelor of Arts degree in Accounting from University of Utah – David Eccles School of Business in 2002.

He also has been a Certified Public Accountant since 2005.

Available Information

Our Internet address is www.claruscorp.com .

We make available free of charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current

reports on Form 8-K, and amendments to those reports, and the proxy statement for our annual meeting of stockholders as soon as

reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Forms 3, 4 and 5 filed with respect to our equity securities under Section 16(a) of the Securities Exchange Act of 1934, as amended,

are also available on our website.

All of the foregoing materials are located at the ‘‘SEC Filings’’ tab

under the section titled “Investor Relations.” The information found on our website shall not be deemed incorporated

by reference by any general statement incorporating by reference this report into any filing under the Securities Act of 1933,

as amended, or under the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such Acts.

The Securities and Exchange

Commission also maintains a website that contains reports, proxy and information statements, and other information regarding

issuers that file electronically with the Securities and Exchange Commission at www.sec.gov.

In addition, you may request a

copy of any such materials, without charge, by submitting a written request to:

Clarus Corporation, c/o the Secretary, 2084

East 3900 South, Salt Lake City, UT 84124.

The contents of the websites identified above are not incorporated into this

Annual Report on Form 10-K.

We make available free of charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, and the proxy statement for our annual meeting of stockholders as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Forms 3, 4 and 5 filed with respect to our equity securities under Section 16(a) of the Securities Exchange Act of 1934, as amended, are also available on our website.

All of the foregoing materials are located at the ‘‘SEC Filings’’ tab under the section titled “Investor Relations.” The information found on our website shall not be deemed incorporated by reference by any general statement incorporating by reference this report into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such Acts.

The Securities and Exchange Commission also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission at www.sec.gov.

In addition, you may request a copy of any such materials, without charge, by submitting a written request to:

Clarus Corporation, c/o the Secretary, 2084 East 3900 South, Salt Lake City, UT 84124.

The contents of the websites identified above are not incorporated into this Annual Report on Form 10-K.

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-K

Item 1. Business