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Based on currently available information, and except as disclosed herein, the Company does not believe that it is reasonably possible that the disposition of any of the legal disputes the Company or its subsidiaries is currently involved in will have a material adverse effect upon the Company’s consolidated financial condition, results of operations or cash flows.
−Removed: There is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying consolidated balance sheets;
+Added: is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying consolidated balance sheets;
however, the actual amounts of such possible losses cannot currently be reasonably estimated by the Company at this time.
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In January 2021, Black Diamond Equipment, Ltd.
−Removed: (“BDEL”) wrote to the U.S.
+Added: (“BDEL”) filed a Section 15(b) report with the U.S.
Consumer Product Safety Commission (“CPSC”) outlining its new cradle solution for certain models of its avalanche beacon transceivers to prevent such transceivers from switching unexpectedly out of “send” mode.
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Separately, on April 21, 2022, BDEL filed a Section 15(b) report and applied for Fast-Track consideration for a voluntary recall, consisting of free repair or replacement of such malfunctioning models of avalanche transceivers, which would not switch from “send” mode to “search” mode due to an electronic malfunction in the reed switch or foil.
−Removed: The CPSC approved the recall and entered into a
−Removed: Corrective Action Plan agreement with BDEL in August 2022.
+Added: The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in August 2022.
BDEL received a letter from the CPSC, dated January 17, 2023, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding the malfunction in the reed switch or foil in certain models of avalanche transceivers switching out of “search” mode.
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The CPSC asked for further clarification and documents, and BDEL sent a responsive letter accompanied by additional documents on June 23, 2023.
−Removed: On September 6, 2023, the CPSC requested further clarification and information regarding the reed switch issue, to which BDEL responded on October 6 and 13, 2023.
+Added: On September 6, 2023, the CPSC requested further clarification and information regarding the reed switch issue, to which BDEL responded on October 6, 2023 and October 13, 2023.
By letters dated October 12, 2023 and December 18, 2023, respectively, BDEL was notified by the CPSC that the agency staff had concluded that BDEL failed to timely meet its statutory reporting obligations under the Consumer Product Safety Act with respect to certain models of avalanche transmitters distributed by BDEL switching unexpectedly out of “send” mode and certain models of avalanche transmitters distributed by BDEL not switching from “send” mode into “search” mode, that BDEL made a material misrepresentation in a report to the CPSC, and that the agency staff intends to recommend that the CPSC impose civil monetary penalties of $16,135,000 and $9,000,000, respectively, for the two matters described above.
−Removed: On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions in the October 12, 2023 and December 18, 2023 letters, including the amount of any potential penalties.
+Added: On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions, including the amount of any potential penalties.
The CPSC ultimately disagreed with our position and the agency voted to refer the matter to the U.S.
Department of Justice for further proceedings.
−Removed: The Company and BDEL intend to strongly contest and vigorously defend against any claims which may be asserted against them.
+Added: The Company and BDEL intend to strongly contest and vigorously defend against any claims which may be asserted against them by the Department of Justice or the CPSC.
Walbrecht, the former President of BDEL and the Company, received a letter from the CPSC dated June 25, 2024, alleging that in his personal capacity he knowingly violated the Consumer Product Safety Act by failing to timely report the occurrence resulting in beacons switching unexpectedly out of “send” mode.
The staff of the CPSC recommended a $5,000,000 fine against Mr.
−Removed: Walbrecht personally.
Pursuant to the Company’s by-laws, the Company has agreed to indemnify Mr.
−Removed: Walbrecht and pay his legal fees, and he has provided an undertaking to the Company that the Company will be entitled to recover those expenses if it is ultimately determined that he was not entitled to indemnification.
+Added: Walbrecht and pay his legal fees in connection with the occurrences described above, and he has provided an undertaking to the Company that the Company will be entitled to recover those expenses if it is ultimately determined that he was not entitled to indemnification.
On August 26, 2024, Mr.
Walbrecht’s independent counsel responded to the CPSC, denying the allegations of its June 25, 2024 letter and rejecting its demand for a penalty.
−Removed: On January 23, 2025, the Company and BDEL were each served with grand jury subpoenas from the U.S.
−Removed: Attorney’s Office for the District of Utah requiring the production of documents relating to avalanche transmitters distributed by BDEL.
−Removed: The Company and BDEL intend to cooperate with this investigation.
−Removed: Based on currently available information, the Company believes an unfavorable outcome with the CPSC is probable, however, we cannot reasonably estimate on what terms this matter will be resolved.
+Added: On January 23, 2025, in connection with a criminal investigation, the Company and BDEL were each served with grand jury subpoenas from the United States Department of Justice requiring the production of documents relating to avalanche transmitters distributed by BDEL.
+Added: The Company and BDEL are cooperating with the investigation and have produced all relevant documents.
+Added: The DOJ has sent letters to Mr.
+Added: Walbrecht and Rick Vance (BDEL’s former Director of Quality) advising them that they are targets in its investigation of possible criminal conduct.
+Added: The DOJ has since served two subpoenas upon a current and former employee of BDEL for grand jury testimony.
+Added: The Company’s Board of Directors has approved indemnity and payment of legal fees for current and former employees subpoenaed by the DOJ, in the same manner and subject to the same conditions described above for Mr.
+Added: On March 13, 2025, the Company received a letter from the CPSC requesting various categories of documents and information in connection with an investigation into whether BDEL sold products that were subject to a recall.
+Added: The Company has cooperated with that investigation, substantially completed document production, and delivered a narrative explanatory letter to the CPSC on June 18, 2025.
+Added: On January 28, 2026, the CPSC closed its investigation without taking further action.
+Added: Based on currently available information, the Company believes an unfavorable outcome with the CPSC is probable, however, we cannot reasonably estimate on what terms this matter will be resolved with the CPSC or the U.S.
+Added: Department of Justice.
During the year ended December 31, 2024, the Company recorded a liability of $2,500,000 representing the low end of the range of our estimated exposure.
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Any penalties imposed by the CPSC or other regulators, could be costly to us and could damage our business and reputation as well as have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows.
+Added: Clarus Corporation v.
+Added: HAP Trading, LLC and Harsh A.
+Added: On September 23, 2022, the Company filed a lawsuit in the United States District Court for the Southern District of New York against HAP Trading, LLC and Harsh A.
+Added: Padia, seeking disgorgement of profits from transactions in the Company’s common stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended.
+Added: On March 14, 2025, the Court issued an Opinion and Order granting the defendants’ motion for summary judgment on the ground that they qualified for the market making exemption under Section 16(d) of the Exchange Act.
+Added: On April 11, 2025, the Company filed a timely Notice of Appeal and the appeal was argued before the United States Court of Appeals for the Second Circuit on February 12, 2026.
+Added: We are currently waiting for the Appeals Court to opine.
+Added: The Court of Appeals has invited the Securities and Exchange Commission (“SEC”) to submit a brief within 60 days or by April 17, 2026, and to advise the Court by March 10, 2026 if it does not intend to submit a brief.
+Added: If the SEC submits a brief, each side will have 21 days to submit a brief in response.
+Added: Caption Management, LLC, et al.
+Added: / Clarus Corporation v.
+Added: Caption Management, LLC, et al.
+Added: On February 12, 2024, a stockholder of the Company filed a lawsuit against Caption Management LLC and related entities (“Caption Management”) in the United States District Court for the Southern District of New York, seeking disgorgement of short-swing profits for violations of Section 16(b) of the Securities Exchange Act of 1934.
+Added: The Company is named as a nominal defendant and any recovery in the case will inure to the benefit of the Company.
+Added: On March 8, 2024, the Company filed its own lawsuit against these same defendants for disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended.
+Added: On February 10, 2026, the Court granted the Company’s motion to dismiss the stockholder action without prejudice on the ground that it was duplicative of the Company’s direct action against the same defendants alleging the same Section 16(b) violations.
+Added: On February 24, 2026, the Company entered into a settlement agreement with Caption Management to resolve the Company’s claims.
+Added: Under the terms of the settlement agreement, Caption Management paid the Company an undisclosed sum in exchange for, among other things,
+Added: mutual releases and dismissal of the claims with prejudice.
+Added: The settlement resolves the Company’s claims against Caption Management without any admission of liability or wrongdoing by any party.
MINE SAFETY DISCLOSURES
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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.