What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-05 compared with 2025-03-06 · 279 added, 250 removed, 983 unchanged (35% of the section changed)

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill and Intangible Assets — Adventure reporting unit and Rhino-Rack and MAXTRAX trademarks— Refer to Notes 1 and 6 to the financial statements

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Indefinite-lived intangible assets — Rhino-Rack and MAXTRAX Trademarks --- Refer to Notes 1 and 6 to the financial statements

Critical Audit Matter Description

The Company's evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of the estimated fair value of a reporting unit or indefinite-lived intangible asset to its carrying value.

The Company estimates the reporting unit’s fair value using a combination of the income approach, which uses projected discounted cash flows, and the market approach, which uses earnings before interest, taxes, depreciation, and amortization (EBITDA) market multiples of comparable publicly traded companies.

The determination of the fair value using the income approach requires management to make estimates and assumptions related to revenue and cash flow projections and discount rates.

The determination of the fair value using the market approach also requires management to make estimates and assumptions related to revenue and cash flow projections used to determine EBITDA as well as the

market multiples of comparable publicly traded companies.

The Company's evaluation of indefinite-lived intangible assets for impairment involves the comparison of the estimated fair value of an indefinite-lived intangible asset to its carrying value.

The Company estimates the fair value of its indefinite-lived intangible assets using the relief-from-royalty method.

The relief-from-royalty method requires management to make estimates and assumptions related to revenue projections, discount rates, and royalty rates.

During the year ended December 31, 2024, the Company recognized a goodwill impairment in its Adventure reporting unit of $36,264,000 and $8,545,000 related to the Rhino-Rack and MAXTRAX indefinite-lived trademark in its Adventure reporting unit.

We identified the valuation of the Adventure reporting unit and Rhino-Rack and MAXTRAX trademarks within indefinite-lived intangibles as a critical audit matter because of the estimates and assumptions management made to determine their estimated fair values.

The audit of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our internal fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to revenue and cash flow projections, the selection of EBITDA multiples, and discount and royalty rates.

During the year ended December 31, 2025, the Company recognized an impairment of $26.1 million related to the Rhino-Rack and MAXTRAX indefinite-lived trademarks in its Adventure reporting unit.

We identified the valuation of the Rhino-Rack and MAXTRAX trademarks within indefinite-lived intangibles as a critical audit matter because of the estimates and assumptions management made to determine their estimated fair values.

The audit of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value

specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to revenue projections and the selection of discount and royalty rates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the revenue and cash flow projections (“projections”), and the selection of EBITDA multiples, discount and royalty rates for the valuation of the Adventure reporting unit and Rhino-Rack and MAXTRAX trademarks included the following, among others:

● We tested the effectiveness of internal controls over the goodwill and indefinite-lived intangible assets impairment analysis, including those over revenue and cash flow projections, and the selection of EBITDA multiples, discount rate, and royalty rates.

● We evaluated the reasonableness of management’s projections by comparing the projections to:

Historical revenues and cash flows.

Internal communications to management and the Board of Directors.

Our audit procedures related to the revenue projections and discount and royalty rates for the valuation of the Rhino-Rack and MAXTRAX trademarks included the following, among others:

● We tested the effectiveness of internal controls over the indefinite-lived intangible assets impairment analysis, including those over revenue projections and the selection of discount and royalty rates.

● We evaluated the reasonableness of management’s revenue projections by comparing the projections to:

Historical revenues.

Internal communications between management and the Board of Directors.

Projected information included in industry reports and certain of its peer companies.

● With the assistance of our internal fair value specialists, we evaluated the reasonableness of the valuation methodologies, EBITDA multiples, discount rates, and royalty rates by:

● With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodologies and discount and royalty rates by:

Testing the source information underlying the determination of the discount and royalty rates and the mathematical accuracy of the calculations.

Developing a range of independent estimates and comparing those estimates to the discount rate selected by management.

Evaluating EBITDA multiples, including testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to its comparable publicly traded companies.

/s/ Deloitte & Touche LLP

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Income tax receivable

Assets held for sale

Total current assets

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Current portion of long-term debt

Liabilities held for sale

Total current liabilities

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Transaction costs

Contingent consideration (benefit) expense

Contingent consideration benefit

Legal costs and regulatory matter expenses

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Interest income, net

Total other (expense) income, net

Total other income (expense), net

Loss before income tax

Income tax expense (benefit)

Income tax (benefit) expense

Loss from continuing operations

Discontinued operations, net of tax

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment

Unrealized gain (loss) on hedging activities

Other comprehensive (loss) income

Unrealized (loss) gain on hedging activities

Other comprehensive income (loss)

Comprehensive loss

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Impairment of indefinite-lived intangible assets

Gain on sale of business

Loss (gain) on sale of businesses

Accretion of notes payable

Amortization of debt issuance costs

Loss (gain) on disposition of property and equipment

Loss on disposition of property and equipment

Noncash lease expense

Contingent consideration (benefit) expense

Contingent consideration benefit

Stock-based compensation

Deferred income taxes

Changes in operating assets and liabilities, net of disposition:

Changes in operating assets and liabilities, net of dispositions:

Accounts receivable

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Cash Flows From Investing Activities:

Proceeds from the sale of business

Proceeds from sale of businesses, net of cash

Purchase of businesses, net of cash acquired

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Proceeds from issuance of term loans and other debt

Payment of debt issuance costs

Purchase of treasury stock

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Cash dividends paid

Payment of contingent consideration

Net cash used in financing activities

Effect of foreign exchange rates on cash

Change in cash

Cash, beginning of year

Cash, end of period

Effect of foreign exchange rates on cash and restricted cash

Change in cash and restricted cash

Cash and restricted cash, beginning of year

Cash and restricted cash, end of period

Supplemental Disclosure of Cash Flow Information:

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Contingent consideration for business acquisitions

Property and equipment purchased with accounts payable

Purchases of property and equipment incurred but not paid

Intangible assets purchased with accounts payable

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Balance, December 31, 2022

Other comprehensive loss

Other comprehensive income

Cash dividends ($ 0.10 per share)

4 unchanged sentences

Balance, December 31, 2023

Other comprehensive income

Other comprehensive loss

Cash dividends ($ 0.10 per share)

2 unchanged sentences

Proceeds from exercise of options

Shares issued for business acquisitions

Balance, December 31, 2024

Other comprehensive loss

Other comprehensive income

Cash dividends ($ 0.10 per share)

1 unchanged sentence

Stock-based compensation expense

Proceeds from exercise of options

Shares issued from restricted stock units

Balance, December 31, 2025

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Nature of Business

Headquartered in Salt Lake City, Utah, we are a global leader in the design and development of best-in-class equipment and lifestyle products for outdoor enthusiasts.

Driven by our rich history of engineering and innovation, our objective is to provide safe, simple, effective and beautiful products so that our customers can maximize their outdoor pursuits and adventures.

Headquartered in Salt Lake City, Utah, we are a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor enthusiast markets.

Each of our brands has a long history of continuous product innovation for core and everyday users alike.

The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers.

The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, TRED Outdoors®, and RockyMounts® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers.

We believe that our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by industry trends across the outdoor and adventure sport end markets.

Use of Estimates

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Actual results could differ from these estimates.

Reclassifications

Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

Specifically, legal costs associated with specific legal matters which were recorded in selling, general, and administrative expenses are now presented in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss.

See Note 16 for discussion regarding legal matters.

Significant Accounting Policies

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The consolidated statements of cash flows are inclusive of continuing and discontinued operations for all periods presented.

Certain prior period financial information, related to discontinued operations, have been reclassified and separately presented in the consolidated financial statements and accompanying notes to conform to the current period presentation.

See Note 3 to our consolidated financial statements for further information.

Foreign Currency Transactions and Translation

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Foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive loss.

Foreign currency transaction gains and losses are included in other comprehensive (loss) income in the consolidated statements of comprehensive loss.

Foreign currency transaction gains and losses are included in other comprehensive income (loss) in the consolidated statements of comprehensive loss.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

At December 31, 2025 and 2024, the Company did not hold any amounts that were considered to be cash equivalents.

Restricted cash primarily includes cash and highly liquid instruments that are used as collateral for certain lease agreements which will affect the amount of cash the Company has available for other uses.

Restricted cash is recorded in Other long-term assets on the consolidated balance sheets.

The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows as of December 31, 2025.

CLARUS CORPORATION

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(in thousands, except per share amounts)

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

At December 31, 2024 and 2023, the Company did not hold any amounts that were considered to be cash equivalents.

December 31, 2025

Restricted cash included in Other long-term assets

Total cash and restricted cash shown in the statements of cash flows

Accounts Receivable and Allowance for Credit Losses

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Inventories are stated at the lower of cost (using the first-in, first-out method “FIFO”) or net realizable value.

Elements of cost in the Company’s manufactured inventories generally include raw materials, direct labor, manufacturing overhead and freight in.

The Company reviews its inventories for excess, close-out, or slow-moving items and makes provisions as necessary to properly reflect inventory values.

The Company evaluates its inventories considering its purchasing plans, sales forecasts, and historical experience to identify excess, close-out, discontinued, or slow-moving items and makes provisions as necessary to properly reflect inventory values.

Property and Equipment

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Variable lease payments are generally expensed as incurred and include certain non-lease components, such as common area maintenance and other services provided by the lessor, and other charges such as utilities, insurance and property taxes included in the lease.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for leases is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases is recognized on a straight-line basis over the lease term.

Non-lease components are excluded from the ROU asset and lease liability present value computations.

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Intangible assets represent other intangible assets and indefinite-lived intangible assets acquired.

The Company’s other intangible assets, such as certain customer relationships, product technologies, tradenames, trademarks and core technologies with finite lives are amortized over their estimated useful lives.

The Company’s other intangible assets, such as certain customer relationships, product technologies, certain tradenames, trademarks and core technologies with finite lives are amortized over their estimated useful lives.

Other intangible assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable.

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The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset.

Based on the results of the Company’s annual impairment tests completed as of December 31, 2024, the Company recognized an impairment of indefinite-lived intangible assets in our Adventure reporting unit, specifically the Rhino-Rack and MAXTRAX trademarks, of $ 3,480 and $ 5,065 , respectively, during the year ended December 31, 2024.

Based on the results of the Company’s impairment analysis completed as of June 30, 2025, the Company determined that certain indefinite-lived intangible assets in our Outdoor reporting unit, specifically the PIEPS trademark, were impaired and recognized charges of $ 1,565 during the year ended December 31, 2025.

Based on the results of the Company’s annual impairment tests completed as of December 31, 2025 and 2024, the Company determined that certain indefinite-lived intangible assets in our Adventure reporting unit, specifically the Rhino-Rack and MAXTRAX trademarks, were impaired and recognized charges of $ 21,600 and $ 4,469 , respectively, during the year ended December 31, 2025, and $ 3,480 and $ 5,065 , respectively, during the year ended December 31, 2024.

No impairment of indefinite-lived intangible assets was recorded during the year ended December 31, 2023.

Based on the results of the Company’s annual impairment tests completed as of December 31, 2022, the Company recognized an impairment of indefinite-lived intangible assets in our Adventure reporting unit, specifically the Rhino-Rack trademark, of $ 40,240 during the year ended December 31, 2022.

Derivative Financial Instruments

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Transaction Costs

Transaction costs consists of expenses related to the Company’s various acquisition efforts, including those associated with acquiring Rhino-Rack, MAXTRAX, TRED, and RockyMounts.

Transaction costs consist of expenses related to the Company’s various acquisition and disposal efforts, including those associated with the acquisitions of TRED and RockyMounts, and the sale of PIEPS.

Income taxes are accounted for under the asset and liability method.

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The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense (benefit).

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax (benefit) expense.

Unrecognized tax benefits that reduce a net operating loss, similar tax loss or tax credit carryforward, are presented as a reduction to deferred income taxes.

The Company recognizes interest expense and penalties related to uncertain tax positions in income tax expense (benefit).

The Company recognizes interest expense and penalties related to uncertain tax positions in income tax (benefit) expense.

Concentration of Credit Risk and Sales

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During the year ended December 31, 2023, no single customer contributed more than 10% of the Company’s sales from continuing operations.

As of December 31, 2024, Roof Racks Galore accounted for approximately 11 % of the Company’s accounts receivable.

As of December 31, 2023, INEOS Automotive accounted for approximately 13 % of the Company’s accounts receivable.

As of December 31, 2025 and 2024, Roof Racks Galore accounted for approximately 10 % and 11 %, respectively, of the Company’s accounts receivable.

No other single customer contributed more than 10% of the Company’s accounts receivable during these periods.

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Derivative financial instruments are recorded at fair value based on current market pricing models.

The Company estimates that, due to the variable interest rates reflecting current market rates, the fair value of its debt obligations approximate the carrying value at December 31, 2024.

Contingent Consideration Liabilities

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Based on updated estimates and projections, the contingent consideration liabilities are adjusted at each reporting date to their estimated fair value.

Changes in fair value subsequent to the acquisition date are reported in contingent consideration (benefit) expense in the accompanying consolidated statements of comprehensive loss.

Changes in fair value subsequent to the acquisition date are reported in contingent consideration benefit in the accompanying consolidated statements of comprehensive loss.

Variations in the fair value of contingent consideration liabilities may result from changes in discount periods or rates, changes in the timing and amount of sales estimates, and changes in probability assumptions with respect to the likelihood of achieving sales milestones.

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Accounting Pronouncements adopted during 2025

During the year ended December 31, 2024, the Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The ASU was adopted on a retrospective basis.

This ASU requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

During the year ended December 31, 2025, the Company adopted Accounting Standards Update (“ASU”) ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The ASU was adopted on a prospective basis.

This ASU requires a public entity to disclose in its rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold.

This ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold.

The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures.

See Note 18 to our consolidated financial statements for additional information regarding segment reporting.

See Note 17 to our consolidated financial statements for additional information regarding income taxes.

Accounting Pronouncements issued and not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires a public entity to disclose in its rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold.

The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold.

The guidance makes several other changes to the disclosure requirements.

All entities are required to apply the guidance prospectively, with the option to apply it retrospectively.

The guidance is effective for public business entities for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the enhanced disclosure requirements, however it does not anticipate a material change to the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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Early adoption is permitted.

The Company is currently evaluating the enhanced disclosure requirements, however it does not anticipate a material change to the consolidated financial statements.

The Company is currently evaluating the enhanced disclosure requirements;

however it does not anticipate a material change to the consolidated financial statements.

CLARUS CORPORATION

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On December 5, 2024, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, entered into an Asset Purchase Agreement (the “RockyMounts Purchase Agreement”) with RockyMounts, Inc.

(the “Seller”) and Robert C.

Noyes, pursuant to which the Company agreed to (i) acquire certain assets and liabilities of the Seller constituting the RockyMounts business, including equipment, inventory, intellectual property (including exclusive use of the brand name ROCKYMOUNTS and the tradename ROCKY MOUNTS INC.), software, domain names and social media accounts, and (ii) assume certain liabilities related to the RockyMounts assets, including all liabilities and obligations of the Seller under the Assigned Contracts (as defined in the RockyMounts Purchase Agreement), arising or to be performed after the closing of the RockyMounts Purchase Agreement.

Pursuant to the RockyMounts Purchase Agreement, the purchase price to be paid for the RockyMounts assets is up to $ 8,000 , which includes (i) $ 4,000 paid in cash at closing, subject to adjustment as set forth in the RockyMounts Purchase Agreement, (ii) the issuance of a promissory note by Rhino-Rack USA LLC in favor of the Seller in the original principal amount of $ 2,000 , payable on the one-year anniversary of the closing of the RockyMounts Purchase Agreement, and (iii) the payment of additional contingent consideration of up to $ 2,000 in cash upon the satisfaction of certain net sales targets (the “RockyMounts Contingent Consideration”).

The Company estimated the initial fair value of the RockyMounts Contingent Consideration to be $ 609 and recorded this liability within accrued liabilities.

(the “Seller” or “RockyMounts”) and Robert C.

Noyes, pursuant to which the Company (i) acquired certain assets and liabilities of the Seller constituting the RockyMounts business, including equipment, inventory, intellectual property (including exclusive use of the brand name ROCKYMOUNTS and the tradename ROCKY MOUNTS INC.), software, domain names and social media accounts, and (ii) assumed certain liabilities related to the RockyMounts assets, including all liabilities and obligations of the Seller under the Assigned Contracts (as defined in the RockyMounts Purchase Agreement), arising or to be performed after the closing of the acquisition pursuant to the RockyMounts Purchase Agreement.

Pursuant to the RockyMounts Purchase Agreement, the purchase price paid for the RockyMounts assets was up to $ 8,000 , which includes (i) $ 4,000 paid in cash at closing, subject to adjustment as set forth in the RockyMounts Purchase Agreement, (ii) the issuance of a promissory note by Rhino-Rack USA LLC in favor of the Seller in the original principal amount of $ 2,000 , payable on the one-year anniversary of the closing of the RockyMounts Purchase Agreement, and (iii) the payment of additional contingent consideration of up to $ 2,000 in cash if certain future net sales thresholds are met for the years ending December 31, 2025 and December 31, 2026, respectively (the “RockyMounts Contingent Consideration”).

The Company estimated the initial fair value of the RockyMounts Contingent Consideration to be $ 609 and recorded this liability within accrued liabilities and other long-term liabilities at the date of purchase.

The net sales threshold required for the cash payment of the 2025 portion of the RockyMounts Contingent Consideration was not met during the measurement period ended December 31, 2025.

See Note 11 for discussion regarding the valuation of the RockyMounts Contingent Consideration as of December 31, 2025.

The acquisition was accounted for as a business combination.

Acquisition-related costs for the RockyMounts Acquisition, which were included in transaction costs during the year ended December 31, 2024, were $ 333 .

Acquisition-related costs for the RockyMounts Acquisition, which were included in transaction costs during the years ended December 31, 2025 and 2024, were $ 40 and $ 333 , respectively.

On September 13, 2023, Clarus entered into a Share Purchase Agreement (the “TRED Purchase Agreement”) to acquire TRED Outdoors Pty Ltd.

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The Company acquired TRED for an aggregate purchase price of $AUD 10,741 (approximately $ 6,849 ), subject to a post-closing adjustment, comprised of $AUD 8,875 (approximately $ 5,659 ) cash, 179 shares of the Company’s common stock valued at $ 1,069 , and additional consideration described below.

The TRED Purchase Agreement provides for the payment of additional contingent consideration of up to $AUD 1,000 (approximately $ 638 ) in cash upon the satisfaction of certain net sales targets (the “TRED Contingent Consideration”).

The Company estimated the initial fair value of the TRED Contingent Consideration to be $AUD 189 (approximately $ 121 ) and recorded this liability within accrued liabilities.

The TRED Purchase Agreement provided for the payment of additional contingent consideration of up to $AUD 1,000 (approximately $ 638 ) in cash upon the satisfaction of certain net sales targets (the “TRED Contingent Consideration”).

The Company estimated the initial fair value of the TRED Contingent Consideration to be $AUD 189 (approximately $ 121 ) and recorded this liability within other long-term liabilities at the date of purchase.

The net sales threshold required for the cash payment of the TRED Contingent Consideration was not met during the final measurement period ended June 30, 2025.

See Note 11 for discussion regarding the valuation of the TRED Contingent Consideration as of December 31, 2025.

The acquisition was accounted for as a business combination.

Acquisition-related costs for the TRED Acquisition, which were included in transaction costs during the year ended December 31, 2024 and 2023, were $ 62 and $ 456 , respectively.

Acquisition-related costs for the TRED Acquisition, which were included in transaction costs during the years ended December 31, 2024 and 2023, were $ 62 and $ 456 , respectively.

There were no transaction costs related to the TRED Acquisition during the year ended December 31, 2025.

The Company believes the acquisitions of RockyMounts and TRED will provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses.

The following table is a reconciliation to the fair value of the purchase consideration and how the purchase consideration is allocated to assets acquired and liabilities assumed which have been estimated at their fair values.

The fair value estimates for the purchase price allocation for RockyMounts are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary.

The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the RockyMounts Acquisition are subject to change and the final purchase price allocations could be different from the amounts presented below.

We expect to finalize the valuations as soon as practicable, but not later than one year from the date of the acquisition.

The fair value measurements for the acquisition of TRED have been completed.

The excess of purchase consideration over the assets acquired and

The fair value measurements for the acquisition

CLARUS CORPORATION

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(in thousands, except per share amounts)

liabilities assumed is recorded as goodwill.

of RockyMounts and TRED have been completed.

The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill.

Goodwill for RockyMounts and TRED is included in the Adventure segment.

The goodwill consists largely of the growth and profitability expected from these acquisitions.

At the time of acquisition, the goodwill consisted largely of the growth and profitability expected from these acquisitions.

December 5, 2024

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DISCONTINUED OPERATIONS

On May 8, 2025, BD European Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a Share Purchase and Transfer Agreement (the “Share Purchase Agreement”) to sell all of the issued and outstanding shares of Black Diamond Austria GmbH, together with its operating subsidiary, PIEPS GmbH (collectively, “PIEPS”).

On July 11, 2025, the Company completed the sale of PIEPS, which was included in the Company’s Outdoor segment, to a private investment firm for a total purchase price of € 7,825 (approximately $ 9,124 ), including cash held at PIEPS of $ 1,311 , pursuant to the Share Purchase Agreement.

The Company recognized a pre-tax loss on sale of $ 91 , which is included in other, net in the consolidated statements of comprehensive loss.

We determined that the sale of the PIEPS business does not represent a strategic shift that had or will have a major effect on the consolidated statements of comprehensive loss, and therefore results were not classified as discontinued operations.

On February 29, 2024, the Company and Everest/Sapphire Acquisition, LLC, its wholly-owned subsidiary, completed the sale to Bullseye Acquisitions, LLC, an affiliate of JDH Capital Company, of all of the equity associated with the Company’s Precision Sport segment, which is comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023, by and among, Bullseye Acquisitions, LLC, Everest/Sapphire Acquisition, LLC and the Company (the “Precision Sport Purchase Agreement”).

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The Company recognized a pre-tax gain on such sale of $ 40,585 .

The activities of the Precision Sport segment have been segregated and reported as discontinued operations for all periods presented.

The activities of the Precision Sport

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

The carrying amounts of the assets and liabilities of the Precision Sport segment were classified as held for sale in our consolidated balance sheets as of December 31, 2023.

The asset and liability balances as of December 31, 2023, were classified as current as we anticipated the sale of these assets and liabilities within a one year period.

The carrying amounts were as follows:

December 31, 2023

Accounts receivable, net

Prepaid and other current assets

Total current assets held for sale

Property and equipment, net

Other intangible assets, net

Indefinite-lived intangible assets

Other long-term assets

Total assets held for sale

Accounts payable

Accrued liabilities

Total current liabilities held for sale

Total liabilities held for sale

segment have been segregated and reported as discontinued operations for the years ended December 31, 2024 and 2023.

There was no activity in discontinued operations during the year ended December 31, 2025.

Summarized results of discontinued operations for the Precision Sport segment are as follows:

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In connection with the sale of the Precision Sport segment, all outstanding debt that was required to be repaid with the proceeds received from the sale pursuant to the terms of the Company’s credit facility and all associated interest expense has been allocated to discontinued operations in our consolidated financial statements for the years ended December 31, 2024 and 2023.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

There was no activity in discontinued operations during the year ended December 31, 2025.

Summarized cash flow information for the Precision Sport segment discontinued operations are as follows:

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Raw materials and supplies

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

PROPERTY AND EQUIPMENT

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Depreciation expense for continuing operations was $ 3,641 , $ 4,034 , and $ 4,150 for the years ended December 31, 2025, 2024, and 2023, respectively.

GOODWILL AND INTANGIBLE ASSETS

Goodwill by segment as of December 31, 2025 was as follows:

Gross value of goodwill

Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates

Goodwill by segment as of December 31, 2024 was as follows:

Gross value of goodwill

Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the changes in goodwill by segment:

Accumulated goodwill impairments

Balance at December 31, 2023

Increase due to acquisition of TRED

Impact of foreign currency exchange rates

Balance at December 31, 2023

Decrease due to impairment

2 unchanged sentences

Balance at December 31, 2024

Due to challenging market conditions and other factors affecting the demand for our Adventure reporting unit products, we experienced significant declining revenue and profitability in our Adventure reporting unit and a decline in stock price during the year ended December 31, 2024.

Revenues continued to decline unexpectedly during the three months ended December 31, 2024, due to a lack of product demand in what is typically the highest selling season for the product in Australia.

As a result, in the fourth quarter of 2024, we reduced our sales forecasts for 2025 and beyond in our Adventure reporting unit.

As part of our annual impairment test as of December 31, 2024, we performed a quantitative assessment using income-based and market-based approaches.

As a result of this assessment, the carrying value of our Adventure reporting unit exceeded the related estimated fair value, thus an impairment of goodwill of $ 36,264 was recorded.

Decrease due to impairment

Balance at December 31, 2025

Due to challenging market conditions and other factors affecting the demand for our Adventure reporting unit products, we experienced significant declining revenue and profitability in our Adventure reporting unit and a sustained decline in our stock price during the years ended December 31, 2025 and 2024.

As part of our annual impairment tests as of December 31, 2025 and 2024, we performed quantitative assessments using income-based and market-based approaches.

As a result of these assessments, the carrying value of our Adventure reporting unit exceeded the related estimated fair value, thus impairments of goodwill of $ 3,804 and $ 36,264 were recorded during the years ended December 31, 2025 and 2024, respectively.

Indefinite-Lived Intangible Assets

2 unchanged sentences

Decrease due to impairment

Decrease due to sale of PIEPS

Impact of foreign currency exchange rates

3 unchanged sentences

(in thousands, except per share amounts)

As part of our annual impairment test as of December 31, 2024, we performed a quantitative assessment using the relief-from-royalty method.

As described above, we reduced our sales forecasts for 2025 and beyond in our Adventure reporting unit.

As a result of this assessment, the carrying value of the Rhino-Rack and MAXTRAX trademarks recorded within our Adventure reporting unit exceeded their estimated related fair values, thus impairments of the Rhino-Rack and MAXTRAX trademarks of $ 3,480 and $ 5,065 , respectively, were recorded.

If we do not achieve the results reflected in the forecasts utilized in our impairment assessments, or if there are changes to market assumptions, all of which require significant estimates and assumptions, our valuation of the reporting unit, including related indefinite-lived intangible assets, could be adversely affected, and we may be required to impair an additional portion or all of the related goodwill, indefinite-lived intangibles, and other long-lived assets which could adversely affect our operating results in the period of impairment.

Management performs an indefinite-lived intangible asset impairment assessment whenever events or circumstances make it more likely than not that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell or dispose of the asset.

If the carrying value of the indefinite-lived asset is higher than its fair value, the asset is deemed to be impaired and the impairment charge is estimated as the difference.

The Company calculates the fair value of its indefinite-lived intangible assets using the income approach, specifically the relief-from-royalty method.

The relief-from-royalty method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset.

Internally forecasted revenues, which the Company believes reasonably approximate market participant assumptions, are multiplied by a royalty rate to arrive at the estimated net after tax cost savings.

The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for comparable intangible assets.

Our discounted cash flow estimates use discount rates that correspond to a weighted-average cost of capital consistent with a market-participant view.

The discount rates are consistent with those used for investment decisions and take into account our future operating plans and strategies.

We determined that a triggering event had occurred during the quarter ended June 30, 2025, with respect to certain indefinite-lived intangible assets within our Outdoor reporting unit, which required that we perform a quantitative assessment.

We assessed the fair value of the specific indefinite-lived intangible assets using the relief-from-royalty method described above.

As a result of this assessment, the carrying value of the PIEPS trademark recorded within our Outdoor reporting unit exceeded its estimated related fair value, thus an impairment of the PIEPS trademark of $ 1,565 was recorded in the second quarter during the year ended December 31, 2025.

As part of our annual impairment tests as of December 31, 2025 and 2024, we performed quantitative assessments using the relief-from-royalty method.

As a result of these assessments, the carrying value of the Rhino-Rack and MAXTRAX trademarks recorded within our Adventure reporting unit exceeded their estimated related fair values, thus impairments of the Rhino-Rack and MAXTRAX trademarks of $ 21,600 and $ 4,469 , respectively, during the year ended December 31, 2025, and $ 3,480 and $ 5,065 , respectively, during the year ended December 31, 2024, were recorded.

If we do not achieve the results reflected in the forecasts utilized in our impairment assessments, or if there are changes to market assumptions, all of which require significant estimates and assumptions, our valuation of the reporting unit, including related indefinite-lived intangible assets, could be adversely affected, and we may be required to impair an additional portion or all of the indefinite-lived intangibles and other long-lived assets which could adversely affect our operating results in the period of impairment.

Trademarks classified as indefinite-lived intangible assets by brand as of December 31, 2025 and 2024, were as follows:

2 unchanged sentences

Black Diamond

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Other Intangible Assets, net

1 unchanged sentence

Gross balance at December 31, 2024

Increase due to acquisitions

Write-off of fully amortized other intangible assets

Decrease due to sale of PIEPS

Impact of foreign currency exchange rates

Gross balance at December 31, 2025

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Other intangible assets, net of amortization as of December 31, 2025 and 2024, were as follows:

29 unchanged sentences

Accrued commissions

Sales returns and rebates

Contingent consideration liabilities

Accrued CPSC regulatory matter

Accrued legal expenses

Restructuring liabilities

2 unchanged sentences

December 31, 2024

Long-term lease liability

Contingent consideration liability

Long-term lease liabilities

Contingent consideration liabilities

LONG-TERM DEBT, NET

Long-term debt as of December 31, 2024 and 2023, was as follows:

December 31, 2024

As of December 31, 2025, the Company maintained no long-term debt.

Long-term debt as of December 31, 2024, was as follows:

December 31, 2024

Revolving credit facility (a)

Other debt (b)

Term loan (c)

Other debt (a)

Less current portion

(a) On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the revolving credit facility, and pursuant to the Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (the “Restated Credit Agreement”), in full.

The Company paid interest monthly on any borrowings on the Restated Credit Agreement.

As of December 31, 2023, the interest rates ranged between approximately 7.7 % and 9.8 % .

(b) On December 5, 2024, pursuant to the RockyMounts Purchase Agreement, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, issued a promissory note in favor of RockyMounts, Inc.

in the principal amount of $ 2,000 , payable on December 5, 2025.

Imputed interest is included within the principal amount and the fair value of the note was $ 1,878 on the date of issuance.

(a) On December 5, 2024, pursuant to the RockyMounts Purchase Agreement, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, issued a promissory note in favor of RockyMounts, Inc.

in the principal amount of $ 2,000 , which was fully paid on December 5, 2025.

Imputed interest was included within the principal amount and the fair value of the note was $ 1,878 on the date of issuance.

There were no remaining amounts outstanding as of December 31, 2025.

As of December 31, 2024, the borrowing rate was 6.5 % .

DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates.

The Company primarily focuses on mitigating changes in cash flows resulting from sales

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Foreign subsidiaries of the Company had term debt with financial institutions, which was repaid as of December 31, 2024.

The foreign subsidiaries paid interest monthly on any borrowings on the credit facility as well as monthly payments on the term debt.

As of December 31, 2023, the interest rate was approximately 3.2 %.

The credit facility was secured by certain assets of the foreign subsidiaries.

(c) On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the term loan in full.

The Company paid interest monthly on any borrowings on the Restated Credit Agreement.

As of December 31, 2023, the rate was approximately 7.7 % .

DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates.

The Company primarily focuses on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S.

denominated in currencies other than the U.S.

The Company manages this risk primarily by using currency forward and option contracts.

3 unchanged sentences

The counterparties to these transactions had both long-term and short-term investment grade credit ratings.

The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty.

The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty, which was $ 358 as of December 31, 2025.

The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain on all contracts.

As of December 31, 2025, there was no such exposure to the counterparties.

The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain on all contracts, which was $ 600 as of December 31, 2024 .

The Company’s derivative counterparties have strong credit ratings and as a result, the Company does not require collateral to facilitate transactions.

4 unchanged sentences

Foreign exchange contracts - Euros

February 2026

December 31, 2024

2 unchanged sentences

Foreign exchange contracts - Euros

February 2025

For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive loss and reclassified to sales in the period the underlying hedged transaction is recognized in earnings.

Gains of $ 573 and $ 393 were reclassified to sales during the years ended December 31, 2024 and 2023, respectively.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

(Losses) gains of ($ 1,585 ) and $ 573 were reclassified to sales during the years ended December 31, 2025 and 2024, respectively.

The following table presents the balance sheet classification and fair value of derivative instruments as of December 31, 2025 and 2024:

8 unchanged sentences

Accrued liabilities

Designated forward exchange contracts

Other long-term liabilities

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

ACCUMULATED OTHER COMPREHENSIVE LOSS

4 unchanged sentences

Balance as of December 31, 2024

Other comprehensive (loss) income before reclassifications

Amounts reclassified from other comprehensive (loss) income

Net current period other comprehensive loss

Other comprehensive income (loss) before reclassifications

Amounts reclassified from other comprehensive income (loss)

Net current period other comprehensive income

Balance as of December 31, 2025

2 unchanged sentences

Balance as of December 31, 2023

Other comprehensive income before reclassifications

Amounts reclassified from other comprehensive income

Net current period other comprehensive income (loss)

Other comprehensive (loss) income before reclassifications

Amounts reclassified from other comprehensive (loss) income

Net current period other comprehensive loss

Balance as of December 31, 2024

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The effects on net loss of amounts reclassified from unrealized gains (losses) on cash flow hedges for foreign exchange contracts and foreign currency translation adjustments for the years ended December 31, 2025 and 2024 were as follows:

Gains reclassified from AOCI to the Consolidated Statements of Comprehensive Loss

Gains (losses) reclassified from AOCI to the Consolidated Statements of Comprehensive Loss

Affected line item in the Consolidated

4 unchanged sentences

Foreign exchange contracts:

Income tax expense

Income tax (benefit) expense

Amount reclassified, net of tax

1 unchanged sentence

The Company’s policy is to classify reclassifications of cumulative foreign currency translation associated with continuing operations from AOCI to Other, net.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

FAIR VALUE MEASUREMENTS

4 unchanged sentences

inputs to the valuation methodology are based on prices or valuation techniques that are unobservable.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Items Measured at Fair Value on a Recurring Basis

2 unchanged sentences

Designated forward exchange contracts

Contingent consideration liabilities

1 unchanged sentence

Designated forward exchange contracts

Contingent consideration liabilities

4 unchanged sentences

We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

The net sales threshold required for the payment of the MAXTRAX Contingent Consideration was not met during the measurement period ended June 30, 2023.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

The net sales threshold required for the payment of the MAXTRAX contingent consideration was not met during the measurement period ended June 30, 2023.

The net sales threshold required for the payment of the TRED contingent consideration was not met during the final measurement period ended June 30, 2025.

There were no contingent consideration liabilities related to the TRED acquisition recorded as of December 31, 2024.

The net sales threshold required for the payment of the 2025 portion of the RockyMounts contingent consideration was not met during the measurement period ended December 31, 2025.

The following table summarizes the changes in contingent consideration liabilities:

Balance at December 31, 2023

Increase due to acquisition of TRED

Increase due to acquisition of RockyMounts

Fair value adjustments

1 unchanged sentence

Balance at December 31, 2024

Increase due to acquisition of RockyMounts

Fair value adjustments

Impact of foreign currency exchange rates

Balance at December 31, 2025

1 unchanged sentence

Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs.

As of December 31, 2024, the net sales threshold required for the payment of the TRED Contingent Consideration is not expected to be met.

Items Measured at Fair Value on a Non-Recurring Basis

12 unchanged sentences

Basic earnings (loss) per share is computed by dividing earnings (loss) by the weighted average number of common shares outstanding during each period.

Diluted earnings (loss) per share is computed by dividing earnings (loss) by the total of the weighted average number of shares of common stock outstanding during each period, plus the effect of dilutive outstanding stock options and unvested restricted stock grants.

Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations.

Diluted earnings (loss) per share is computed by dividing earnings (loss) by the total of the weighted average number

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

of shares of common stock outstanding during each period, plus the effect of dilutive outstanding stock options and unvested restricted stock grants.

Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations.

The following table is a reconciliation of basic and diluted shares of common stock outstanding used in the calculation of earnings (loss) per share:

8 unchanged sentences

STOCK-BASED COMPENSATION PLAN

Under the Company’s current 2015 Stock Incentive Plan (the “2015 Plan”), the Company’s Board of Directors (the “Board of Directors”) has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries.

The 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units.

The aggregate number of shares of common stock that may be granted through awards under the 2015 Plan to any employee in any calendar year may not exceed 500 shares.

The 2015 Plan will continue in effect until December 2025 unless terminated sooner.

As of December 31, 2024, the number of shares authorized and reserved for issuance under the 2015 Plan is 10,187 shares, subject to automatic annual increase equal to 5 % of the total number of shares of the Company’s outstanding common stock.

On May 29, 2025, at the Company’s 2025 Annual Meeting, stockholders approved the Clarus Corporation Amended and Restated 2015 Stock Incentive Plan (the “Amended and Restated 2015 Plan”), which had previously been adopted by the Board of Directors on April 16, 2025, subject to such approval.

The Amended and Restated 2015 Plan amends and restates the Clarus Corporation 2015 Stock Incentive Plan (the “2015 Plan”), originally approved by stockholders on December 11, 2015.

Upon stockholder approval of the Amended and Restated 2015 Plan, the 2015 Plan was terminated, and no further awards will be granted under it.

Any remaining shares available for grant under the 2015 Plan were canceled.

However, 4,537 shares subject to outstanding awards previously granted under the 2015 Plan will remain available for issuance pursuant to their existing terms.

Under the Amended and Restated 2015 Plan, the Company’s Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries.

The Amended and Restated 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted stock unit awards.

Unless earlier terminated as provided therein, the Amended and Restated 2015 Plan will terminate on the tenth (10th) anniversary of the effective date of the Amended and Restated 2015 Plan.

Options Granted:

During the year ended December 31, 2024, the Company issued stock options for an aggregate of 1,250 shares under the 2015 Plan to directors and employees of the Company.

Of the 1,250 options, 1,140 options vest and become exercisable over a period of two years , 100 vest in four equal consecutive quarterly tranches from the date of grant, and 10 vest in one quarterly tranche from the date of grant.

All of the issued stock options expire ten years from the date of the grant.

During the year ended December 31, 2025, the Company issued stock option awards for an aggregate of 630 shares of Common Stock under the Amended and Restated 2015 Plan and the 2015 Plan to directors and employees of the Company.

Of the 630 stock options, 500 stock options shall vest and become exercisable one year from the date of the grant, 50 stock options shall vest and become

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

exercisable over a period of three years from the date of the grant, and 80 stock options shall vest and become exercisable in four equal consecutive quarterly tranches from the date of grant.

All of the issued stock options expire ten years from the date of the grant.

For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:

27 unchanged sentences

For computing the fair value of the restricted shares with a market condition, the fair value of the restricted stock award grant has been estimated as of the date of grant using the Monte-Carlo pricing model with the assumptions below.

On March 4, 2022, the Company issued and granted to the Executive Chairman and certain employees restricted stock awards of 700 restricted shares under the 2015 Plan, of which 700 restricted shares will vest if, on or before March 4, 2032, the Fair Market Value (as defined in the Plan) of the Company’s common stock shall have equaled or exceeded $ 50.00 per share for twenty consecutive trading days.

CLARUS CORPORATION

2 unchanged sentences

March 14, 2023

March 4, 2022

Number issued

1 unchanged sentence

$ 15.00 - $ 18.00 stock price target

$ 50.00 stock price target

Grant price (per share)

5 unchanged sentences

$ 7.84 - $ 8.34

Using these assumptions, the fair value of the market condition restricted stock awards granted on March 14, 2023 and March 4, 2022 were approximately $ 4,046 and $ 10,761 , respectively.

Using these assumptions, the fair value of the market condition restricted stock awards granted on March 14, 2023 was approximately $ 4,046 .

The total non-cash stock compensation expense for continuing operations related to stock options and restricted stock awards recorded by the Company was as follows:

31 unchanged sentences

During the years ended December 31, 2025, 2024, and 2023, the Company incurred $ 967 , $ 1,948 , and $ 3,223 , respectively, of restructuring charges related to these actions.

The Company has incurred $ 5,171 of cumulative restructuring charges since the commencement of our restructuring actions in 2023.

The Company has incurred $ 6,138 of cumulative restructuring charges since the commencement of these restructuring actions in 2023.

The Company accrues for restructuring costs when they are probable and reasonably estimable.

These costs include severance costs, exit costs, and other restructuring costs and are included in restructuring charges in the consolidated statements of comprehensive loss.

Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the consolidated statements of comprehensive loss.

Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs.

Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business.

We estimate that we will continue to incur restructuring costs related to employee-related costs and facility exit costs during the year 2025;

however, the Company cannot estimate the total amount expected to be incurred as cost reduction actions continue to be evaluated.

The Company anticipates completing these restructuring activities in 2025.

We estimate that we will incur additional employee-related and facility exit restructuring costs in 2026;

however, the Company cannot estimate the total amount expected to be incurred at this time as cost reduction actions continue to be evaluated.

The Company currently anticipates completing these restructuring activities in 2026;

however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

CLARUS CORPORATION

8 unchanged sentences

Cash payments

Asset impairments

Balance at December 31, 2025

5 unchanged sentences

Based on currently available information, 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 position, results of operations or cash flows, except for the U.S.

Consumer Product Safety Commission (“CPSC”) and Department of Justice matter discussed below.

Consumer Product Safety Commission (“CPSC”) and Department of Justice matters discussed below.

There is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying condensed consolidated balance sheets;

6 unchanged sentences

In January 2021, Black Diamond Equipment, Ltd.

(“BDEL”) wrote to the U.S.

(“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.

3 unchanged sentences

BDEL received a letter from the CPSC, dated October 28, 2021, 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 certain models of avalanche transceivers switching unexpectedly out of “send” mode.

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”

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

mode to “search” mode due to an electronic malfunction in the reed switch or foil.

The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in August 2022.

2 unchanged sentences

The CPSC asked for further clarification and documents, and BDEL sent a responsive letter accompanied by additional documents on June 23, 2023.

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.

By letters dated October 12, 2023 and December 18, 2023, respectfully, 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 and $ 9,000 , respectively, for the two matters described above.

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.

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 and $ 9,000 , respectively, for the two matters described above.

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.

5 unchanged sentences

Pursuant to the Company’s by-laws, the Company has agreed to indemnify Mr.

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.

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.

On January 23, 2025, the Company and BDEL were each served with grand jury subpoenas from the U.S.

Attorney’s Office for the District of Utah requiring the production of documents relating to avalanche transmitters distributed by BDEL.

The Company and BDEL intend to cooperate with this investigation.

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.

The Company and BDEL are cooperating with the investigation and have produced all relevant documents.

The DOJ has sent letters to Mr.

Walbrecht and Rick Vance (BDEL’s former Director of Quality) advising them that they are targets in its investigation of possible criminal conduct.

The DOJ has since served two subpoenas upon a current and former employee of BDEL for grand jury testimony.

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.

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.

The Company has cooperated with that investigation, substantially completed document production, and delivered a narrative explanatory letter to the CPSC on June 18, 2025.

On January 28, 2026, the CPSC closed its investigation without taking further action.

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.

4 unchanged sentences

We believe it is reasonably possible that a change in our ability to estimate the amount of loss could occur in the near term and that the change in the estimate could be material.

In addition, as this matter is ongoing, the Company is currently unable to predict its duration, resources required or outcome, or the impact it may have on the Company’s liquidity, financial condition, results of operations and/or cash flows.

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.

During the years ended December 31, 2024 and 2023, the Company incurred legal expenses of $ 3,088 , which includes the $ 2,500 recorded liability noted above, and $ 476 , respectively, in efforts to resolve this matter.

These legal expenses are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss.

In addition, as this matter is ongoing, the Company is currently unable to predict its duration,

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

resources required or outcome, or the impact it may have on the Company’s liquidity, financial condition, results of operations and/or cash flows.

During the years ended December 31, 2025, 2024, and 2023, the Company incurred legal expenses of $ 2,825 , $ 3,088 , which includes the $ 2,500 recorded liability noted above, and $ 476 , respectively, in efforts to resolve this matter.

These legal expenses are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss.

Clarus Corporation v.

2 unchanged sentences

Padia (“HAP Trading”), 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.

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.

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.

We are currently waiting for the Appeals Court to opine.

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.

If the SEC submits a brief, each side will have 21 days to submit a brief in response.

Caption Management, LLC, et al.

/ Clarus Corporation v.

Caption Management, LLC, et al.

On March 8, 2024, the Company filed a lawsuit in the United States District Court for the Southern District of New York against Caption Management, LLC, Caption Partners II LP, Caption GP, LLC, William Cooper and Jason Strasser (“Caption Management”), seeking disgorgement of profits from transactions in the Company’s stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended.

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.

The Company is named as a nominal defendant and any recovery in the case will inure to the benefit of the Company.

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.

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.

On February 24, 2026, the Company entered into a settlement agreement with Caption Management to resolve the Company’s claims.

Under the terms of the settlement agreement, Caption Management paid the Company an undisclosed sum in exchange for, among other things, mutual releases and dismissal of the claims with prejudice.

The settlement resolves the Company’s claims against Caption Management without any admission of liability or wrongdoing by any party.

During the years ended December 31, 2025, 2024, and 2023, the Company incurred legal expenses of $ 1,857 , $ 754 , and $ 1,288 , respectively, in the efforts to bring the cases against HAP Trading and Caption Management to trial.

These legal expenses are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Consolidated loss from continuing operations before income taxes consists of the following:

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State and local

Income tax expense (benefit)

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The allocation of income tax expense (benefit) between continuing and discontinued operations was as follows:

Income tax (benefit) expense

The allocation of income tax (benefit) expense between continuing and discontinued operations was as follows:

Year Ended December 31,

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Year Ended December 31,

Federal statutory income tax benefit

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Increase (decrease) in income taxes resulting from:

State and local tax effects

State and local income taxes, before federal income tax effect (a)

Foreign tax effects

Statutory tax rate difference between Australia and U.S.

Changes in valuation allowances

Sales Gain/Loss

Other foreign jurisdictions

Research and development tax credits

Changes in valuation allowances

Nontaxable or nondeductible items

Executive compensation limitation

Changes in unrecognized tax benefits

Other adjustments

Income tax benefit

(a) For the year ended December 31, 2025, a majority ( greater than 50 percent ) of the Company’s state income tax expense related to Utah.

Year Ended December 31,

Statutory income tax benefit

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Income tax expense (benefit)

The effective income tax rate of 25.3 % for the year ended December 31, 2024, differed compared to the statutory tax rates primarily due to the impact of recording a valuation allowance on the deferred tax assets and impairment of goodwill and indefinite-lived intangible assets, all of which are non-deductible for tax purposes.

The effective income tax rate was a benefit of 18.5 % for the year ended December 31, 2025, and differed compared to the statutory tax rates primarily due to the impact of changes in the valuation allowance on deferred tax assets and statutory tax rate differences between foreign jurisdictions and the United States.

The deferred tax asset write-offs during the year ended December 31, 2023, relate to state NOLs that expired in 2023 that had been previously fully reserved via a valuation allowance.

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federal income tax purposes of $ 41,209 and $ 5,709 , respectively.

All federal NOLs will have an indefinite carryforward period.

Federal research and experimentation credits have a limited carryforward period and will begin to expire in tax year 2033.

In accordance with Section 382 and Section 383 of the Internal Revenue Code of 1986 (“Code”), utilization of the NOL and tax credit carryforwards may subject to limitations based on prior or future ownership changes.

Tax positions are recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities.

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federal and state jurisdictions of 2020 through 2025 and in the foreign jurisdictions of 2019 through 2025.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax (benefit) expense.

A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023 is as follows:

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Balance, end of year

As of December 31, 2024 and 2023, we had unrecognized tax benefits of $ 2,863 and $ 890 , respectively, of which $ 433 and $ 798 would affect the effective tax rate if recognized.

As of December 31, 2025 and 2024, we had unrecognized tax benefits of $ 4,748 and $ 2,863 , respectively, of which $ 2,764 of tax benefit and $ 433 of tax expense would affect the effective tax rate if recognized.

Unrecognized tax benefits that reduce a net operating loss, similar tax loss or tax credit carryforward are presented as a reduction to deferred income taxes.

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Total accrued interest and penalties as of December 31, 2025 and 2024, were not significant.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Significant income taxes paid (refunded) by jurisdiction for the year ended December 31, 2025 is as follows:

Year Ended December 31,

Other foreign

Total income tax paid

SEGMENT INFORMATION

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The CODM considers budget-to-actual variances when making decisions about allocating capital and personnel to the segments.

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

legal and regulatory matters, that are managed at a corporate level and are not included within segment results when evaluating performance or allocating resources.

Corporate costs consist of corporate office expenses including compensation, benefits, non-cash stock compensation expense, transaction costs, and other administrative costs, as well as charges related to certain legal and regulatory matters, that are managed at a corporate level and are not included within segment results when evaluating performance or allocating resources.

Each segment is described below:

● Our Outdoor segment, which includes Black Diamond Equipment and PIEPS, 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.

● Prior to its sale on July 11, 2025, PIEPS was included in our Outdoor segment alongside Black Diamond Equipment.

Our Outdoor segment 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 Outdoor segment offers a broad range of products, including:

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

● Our Adventure segment, which includes Rhino-Rack, MAXTRAX, and TRED, is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards, bicycle racks, and accessories in Australia and New Zealand and a growing presence in the United States and Europe.

● Our Adventure segment, which includes Rhino-Rack, MAXTRAX, TRED, and RockyMounts is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards, bicycle racks, and accessories in Australia and New Zealand and a growing presence in the United States and Europe.

As noted above, the Company has a wide variety of technical outdoor equipment and lifestyle products that are sold to a variety of customers in multiple end markets.

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Financial information for our segments, as well as revenue by geography, which the Company believes provides a meaningful depiction how the nature, timing and uncertainty of revenue are affected by economic factors, is as follows:

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Year Ended December 31, 2025

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Inventory fair value of purchase accounting

PFAS and other inventory reserves

Other inventory reserves

Selling, general and administrative

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Loss before income tax

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Year Ended December 31, 2024

3 unchanged sentences

Inventory fair value of purchase accounting

PFAS and other inventory reserves

Other inventory reserves

Selling, general and administrative

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Legal costs and regulatory matter expenses

Segment operating (loss) income

Impairment of goodwill

Impairment of indefinite-lived intangible assets

Segment operating loss

Corporate costs

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Loss before income tax

CLARUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Year Ended December 31, 2023

3 unchanged sentences

Inventory fair value of purchase accounting

Other inventory reserves

Selling, general and administrative

Restructuring charges

Transaction costs

Contingent consideration expense

Impairment of goodwill

Impairment of indefinite-lived intangible assets

Segment operating income (loss)

Legal costs and regulatory matter expenses

Segment operating (loss) income

Corporate costs

Interest income, net

Loss before income tax

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Kanders, the Company’s Executive Chairman of the Board of Directors, is a member of the Board of Directors and sole stockholder of Kanders & Company.

No amounts were due to Kanders & Company as of December 31, 2025 or 2024, and the Company did not enter into any other related party transactions with Kanders & Company during the years ended December 31, 2025, 2024, or 2023.

CLARUS CORPORATION

1 unchanged sentence

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 8. Financial Statements and Supplementary Data