Clarus Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CLARUS CORPORATION AND SUBSIDIARIES Index to Financial Statements Page Report of Independent Registered Public Accounting Firm ( PCAOB ID No. 34 ) 54 Consolidated Balance Sheets - December 31, 2025 and 2024 56 Consolidated Statements of Comprehensive Loss - Years Ended December 31, 2025, 2024 and 2023 57 Consolidated Statements of Cash Flows - Years Ended December 31, 2025, 2024 and 2023 58 Consolidated Statements of Stockholders’ Equity - Years Ended December 31, 2025, 2024 and 2023 59 Notes to Consolidated Financial Statements 60 ​ ​ ​ 53 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Clarus Corporation: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of⁠ Clarus Corporation and subsidiaries (the "Company") as of December 31, 2025 and December 31, 2024,⁠ the related consolidated statements of comprehensive loss⁠, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 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 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, 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 54 Table of Contents 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 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 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. /s/ Deloitte & Touche LLP Salt Lake City, Utah March 5, 2026 We have served as the Company’s auditor since 2018. ​ 55 Table of Contents CLARUS CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ 2024 Assets ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash $ 36,691 ​ $ 45,359 Accounts receivable, net ​ 44,839 ​ ​ 43,678 Inventories ​ 83,028 ​ ​ 82,278 Prepaid and other current assets ​ 5,457 ​ ​ 5,555 Income tax receivable ​ 1,407 ​ ​ 910 Total current assets ​ 171,422 ​ ​ 177,780 ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 18,255 ​ ​ 17,606 Other intangible assets, net ​ 23,761 ​ ​ 31,516 Indefinite-lived intangible assets ​ 19,600 ​ ​ 46,750 Goodwill ​ - ​ ​ 3,804 Deferred income taxes ​ 55 ​ ​ 36 Other long-term assets ​ 15,935 ​ ​ 16,602 Total assets $ 249,028 ​ $ 294,094 ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ Accounts payable $ 15,907 ​ $ 11,873 Accrued liabilities ​ 24,403 ​ ​ 22,276 Income tax payable ​ 179 ​ ​ - Current portion of long-term debt ​ - ​ ​ 1,888 Total current liabilities ​ 40,489 ​ ​ 36,037 ​ ​ ​ ​ ​ ​ Deferred income taxes ​ 1,418 ​ ​ 12,210 Other long-term liabilities ​ 10,728 ​ ​ 12,754 Total liabilities ​ 52,635 ​ ​ 61,001 ​ ​ ​ ​ ​ ​ Stockholders’ Equity ​ ​ ​ ​ ​ Preferred stock, $ 0.0001 par value per share; 5,000 shares authorized; none issued ​ - ​ ​ - Common stock, $ 0.0001 par value per share; 100,000 shares authorized; 43,054 and 43,004 issued and 38,402 and 38,362 outstanding, respectively ​ 4 ​ ​ 4 Additional paid in capital ​ 703,487 ​ ​ 697,592 Accumulated deficit ​ ( 457,253 ) ​ ​ ( 406,857 ) Treasury stock, at cost ​ ( 33,156 ) ​ ​ ( 33,114 ) Accumulated other comprehensive loss ​ ( 16,689 ) ​ ​ ( 24,532 ) Total stockholders’ equity ​ 196,393 ​ ​ 233,093 Total liabilities and stockholders’ equity $ 249,028 ​ $ 294,094 ​ See accompanying notes to consolidated financial statements. 56 Table of Contents CLARUS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 106,123 ​ $ 105,745 ​ $ 112,385 International sales ​ 144,317 ​ ​ 158,570 ​ ​ 173,635 Total sales ​ 250,440 ​ ​ 264,315 ​ ​ 286,020 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold ​ 167,464 ​ ​ 171,696 ​ ​ 188,509 Gross profit ​ 82,976 ​ ​ 92,619 ​ ​ 97,511 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 105,173 ​ ​ 111,948 ​ ​ 114,603 Restructuring charges ​ 967 ​ ​ 1,948 ​ ​ 3,223 Transaction costs ​ 752 ​ ​ 576 ​ ​ 593 Contingent consideration benefit ​ ( 355 ) ​ ​ ( 125 ) ​ ​ ( 1,565 ) Legal costs and regulatory matter expenses ​ 4,682 ​ ​ 3,842 ​ ​ 1,764 Impairment of goodwill ​ 3,804 ​ ​ 36,264 ​ ​ - Impairment of indefinite-lived intangible assets ​ 27,634 ​ ​ 8,545 ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 142,657 ​ ​ 162,998 ​ ​ 118,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss ​ ( 59,681 ) ​ ​ ( 70,379 ) ​ ​ ( 21,107 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ Interest income, net ​ 619 ​ ​ 1,467 ​ ​ 67 Other, net ​ 1,973 ​ ​ ( 1,673 ) ​ ​ 961 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ​ 2,592 ​ ​ ( 206 ) ​ ​ 1,028 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss before income tax ​ ( 57,089 ) ​ ​ ( 70,585 ) ​ ​ ( 20,079 ) Income tax (benefit) expense ​ ( 10,533 ) ​ ​ 17,852 ​ ​ ( 4,291 ) Loss from continuing operations ​ ( 46,556 ) ​ ​ ( 88,437 ) ​ ​ ( 15,788 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Discontinued operations, net of tax ​ - ​ ​ 36,150 ​ ​ 5,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ ( 46,556 ) ​ ​ ( 52,287 ) ​ ​ ( 10,146 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ 8,172 ​ ​ ( 9,635 ) ​ ​ 2,405 Unrealized (loss) gain on hedging activities ​ ( 329 ) ​ ​ 517 ​ ​ ( 134 ) Other comprehensive income (loss) ​ 7,843 ​ ​ ( 9,118 ) ​ ​ 2,271 Comprehensive loss $ ( 38,713 ) ​ $ ( 61,405 ) ​ $ ( 7,875 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from continuing operations per share: ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 1.21 ) ​ $ ( 2.31 ) ​ $ ( 0.42 ) Diluted ​ ( 1.21 ) ​ ​ ( 2.31 ) ​ ​ ( 0.42 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 1.21 ) ​ $ ( 1.37 ) ​ $ ( 0.27 ) Diluted ​ ( 1.21 ) ​ ​ ( 1.37 ) ​ ​ ( 0.27 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 38,393 ​ ​ 38,305 ​ ​ 37,485 Diluted ​ 38,393 ​ ​ 38,305 ​ ​ 37,485 ​ See accompanying notes to consolidated financial statements . 57 Table of Contents CLARUS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ( 46,556 ) ​ $ ( 52,287 ) ​ $ ( 10,146 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ Depreciation of property and equipment ​ 3,641 ​ ​ 4,034 ​ ​ 7,602 Amortization of other intangible assets ​ 8,740 ​ ​ 9,784 ​ ​ 12,748 Impairment of goodwill ​ 3,804 ​ ​ 36,264 ​ ​ - Impairment of indefinite-lived intangible assets ​ 27,634 ​ ​ 8,545 ​ ​ - Loss (gain) on sale of businesses ​ 91 ​ ​ ( 40,585 ) ​ ​ - Accretion of notes payable ​ 112 ​ ​ 10 ​ ​ - Amortization of debt issuance costs ​ - ​ ​ 1,209 ​ ​ 928 Loss on disposition of property and equipment ​ 723 ​ ​ 269 ​ ​ 54 Noncash lease expense ​ 3,558 ​ ​ 3,155 ​ ​ 3,741 Contingent consideration benefit ​ ( 355 ) ​ ​ ( 125 ) ​ ​ ( 1,565 ) Stock-based compensation ​ 5,895 ​ ​ 5,829 ​ ​ 5,292 Deferred income taxes ​ ( 11,658 ) ​ ​ 16,182 ​ ​ ( 6,348 ) Changes in operating assets and liabilities, net of dispositions: ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ( 967 ) ​ ​ 10,844 ​ ​ 6,078 Inventories ​ ( 1,579 ) ​ ​ 3,743 ​ ​ 13,211 Prepaid and other assets ​ 92 ​ ​ 640 ​ ​ 2,134 Accounts payable ​ 3,602 ​ ​ ( 7,965 ) ​ ​ ( 4,940 ) Accrued liabilities ​ ( 1,226 ) ​ ​ ( 6,075 ) ​ ​ 540 Income taxes ​ ( 297 ) ​ ​ ( 771 ) ​ ​ 2,595 Net cash (used in) provided by operating activities ​ ( 4,746 ) ​ ​ ( 7,300 ) ​ ​ 31,924 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from sale of businesses, net of cash ​ 7,813 ​ ​ 175,674 ​ ​ - Purchase of businesses, net of cash acquired ​ - ​ ​ ( 3,840 ) ​ ​ ( 5,648 ) Proceeds from disposition of property and equipment ​ 120 ​ ​ 315 ​ ​ 199 Purchase of intangible assets ​ - ​ ​ ( 250 ) ​ ​ ( 250 ) Purchases of property and equipment ​ ( 5,162 ) ​ ​ ( 6,739 ) ​ ​ ( 5,717 ) Net cash provided by (used in) investing activities ​ 2,771 ​ ​ 165,160 ​ ​ ( 11,416 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from revolving credit facilities ​ - ​ ​ 31,205 ​ ​ 51,243 Repayments on revolving credit facilities ​ - ​ ​ ( 41,580 ) ​ ​ ( 59,835 ) Repayments on term loans and other debt ​ ( 2,000 ) ​ ​ ( 109,459 ) ​ ​ ( 11,126 ) Proceeds from issuance of term loans and other debt ​ - ​ ​ 46 ​ ​ - Purchase of treasury stock ​ ( 42 ) ​ ​ ( 185 ) ​ ​ ( 222 ) Proceeds from exercise of options ​ - ​ ​ 565 ​ ​ 3,435 Cash dividends paid ​ ( 3,840 ) ​ ​ ( 3,831 ) ​ ​ ( 3,750 ) Net cash used in financing activities ​ ( 5,882 ) ​ ​ ( 123,239 ) ​ ​ ( 20,255 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange rates on cash and restricted cash ​ 693 ​ ​ ( 586 ) ​ ​ ( 990 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in cash and restricted cash ​ ( 7,164 ) ​ ​ 34,035 ​ ​ ( 737 ) Cash and restricted cash, beginning of year ​ 45,359 ​ ​ 11,324 ​ ​ 12,061 Cash and restricted cash, end of period $ 38,195 ​ $ 45,359 ​ $ 11,324 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Cash Flow Information: ​ ​ ​ ​ ​ ​ ​ ​ Cash paid (received) for income taxes $ 936 ​ $ 2,463 ​ $ ( 758 ) Cash paid for interest $ 16 ​ $ 1,957 ​ $ 10,398 Supplemental Disclosures of Non-Cash Investing and Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ Shares issued for business acquisitions $ - ​ $ - ​ $ 3,132 Debt issued for business acquisition $ - ​ $ 1,878 ​ $ - Contingent consideration for business acquisitions $ - ​ $ 609 ​ $ 121 Purchases of property and equipment incurred but not paid $ 118 ​ $ 167 ​ $ 145 Intangible assets purchased with accounts payable $ - ​ $ - ​ $ 250 Lease liabilities arising from obtaining right-of-use assets $ 545 ​ $ 2,530 ​ $ 4,441 ​ See accompanying notes to consolidated financial statements . 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CLARUS CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-In ​ Accumulated ​ Treasury Stock ​ Comprehensive ​ Stockholders' ​ ​ Shares ​ Amount ​ Capital ​ Deficit ​ Shares ​ Amount ​ Income (Loss) ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2022 ​ ​ 41,637 ​ $ 4 ​ $ 679,339 ​ $ ( 336,843 ) ​ ​ ( 4,589 ) ​ $ ( 32,707 ) ​ $ ( 17,685 ) ​ $ 292,108 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 10,146 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 10,146 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 2,271 ​ ​ 2,271 Cash dividends ($ 0.10 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,750 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,750 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 23 ) ​ ​ ( 222 ) ​ ​ - ​ ​ ( 222 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 5,292 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 5,292 Proceeds from exercise of options ​ ​ 695 ​ ​ - ​ ​ 3,435 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 3,435 Shares issued for business acquisitions ​ ​ 429 ​ ​ - ​ ​ 3,132 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 3,132 Balance, December 31, 2023 ​ ​ 42,761 ​ $ 4 ​ $ 691,198 ​ $ ( 350,739 ) ​ ​ ( 4,612 ) ​ $ ( 32,929 ) ​ $ ( 15,414 ) ​ $ 292,120 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 52,287 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 52,287 ) Other comprehensive loss ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 9,118 ) ​ ​ ( 9,118 ) Cash dividends ($ 0.10 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,831 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,831 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 30 ) ​ ​ ( 185 ) ​ ​ - ​ ​ ( 185 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 5,829 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 5,829 Proceeds from exercise of options ​ ​ 243 ​ ​ - ​ ​ 565 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 565 Balance, December 31, 2024 ​ ​ 43,004 ​ $ 4 ​ $ 697,592 ​ $ ( 406,857 ) ​ ​ ( 4,642 ) ​ $ ( 33,114 ) ​ $ ( 24,532 ) ​ $ 233,093 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 46,556 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 46,556 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 7,843 ​ ​ 7,843 Cash dividends ($ 0.10 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,840 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,840 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 10 ) ​ ​ ( 42 ) ​ ​ - ​ ​ ( 42 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 5,895 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 5,895 Shares issued from restricted stock units ​ ​ 50 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Balance, December 31, 2025 ​ ​ 43,054 ​ $ 4 ​ $ 703,487 ​ $ ( 457,253 ) ​ ​ ( 4,652 ) ​ $ ( 33,156 ) ​ $ ( 16,689 ) ​ $ 196,393 ​ See accompanying notes to consolidated financial statements . ​ ​ 59 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share amounts) NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying audited consolidated financial statements of Clarus Corporation and subsidiaries (which may be referred to as the “Company,” “Clarus,” “we,” “our” or “us”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Nature of Business 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®, 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 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The more significant estimates relate to the fair value of net assets acquired in business combinations, provision for excess or obsolete inventory, allowance for credit losses, and valuation of contingent consideration liabilities, deferred tax assets, long-lived assets, goodwill and indefinite-lived intangible assets, and other intangible assets. We base our estimates on historical experience, projected future cash flows, and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Clarus Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unless otherwise specified, disclosures in these consolidated financial statements reflect continuing operations only. The consolidated statements of cash flows are inclusive of continuing and discontinued operations for all periods presented. Foreign Currency Transactions and Translation The accounts of the Company’s international subsidiaries’ financial statements which have functional currencies other than the U.S. dollar are translated into U.S. dollars using the exchange rate at the balance sheet dates for assets and liabilities and average exchange rates for the periods for revenues, expenses, gains and losses. 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 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. ​ 60 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) ​ ​ ​ ​ December 31, 2025 Cash $ 36,691 Restricted cash included in Other long-term assets ​ 1,504 Total cash and restricted cash shown in the statements of cash flows $ 38,195 ​ Accounts Receivable and Allowance for Credit Losses The Company records its trade receivables at sales value. The trade receivables do not bear interest. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for credit losses based on a combination of factors. A non-specific allowance for estimated credit losses is recorded based on historical experience of collectability. In addition, specific allowances are established for customer accounts as known collection problems occur due to insolvency, disputes or other collection issues. The amounts of these specific allowances are estimated by management based on the customer’s financial position, the age of the customer’s receivables and the reasons for any disputes. The allowance for credit losses is reduced by subsequent collections of the specific allowances or by any write-off of customer accounts that are deemed uncollectible. The allowance for credit losses was $ 1,121 and $ 1,271 at December 31, 2025 and 2024, respectively. There were no significant write-offs during the years ended December 31, 2025, 2024, and 2023. Inventories Inventories are stated at the lower of cost (using the first-in, first-out method “FIFO”) or net realizable value. 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 Property and equipment is stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. The principal estimated useful lives are: buildings, 30 years ; building improvements, 20 years ; machinery and equipment, 3 - 10 years ; computer hardware and software, 3 - 5 years ; furniture and fixtures, 5 years . Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the remaining life of the lease. Major replacements, which extend the useful lives of equipment, are capitalized and depreciated over the remaining useful life. Normal maintenance and repair items are expensed as incurred. Property and equipment are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable. Leases Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. 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 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. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 61 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Goodwill Goodwill represents the excess of the purchase price over the fair market value of identifiable net assets of acquired companies. Goodwill is not amortized, but rather is tested for impairment at the reporting unit level annually as of December 31 st of each year or more frequently if triggering events or changes in circumstances indicate impairment, such as a significant adverse change in business climate. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or the Company elects to bypass the qualitative assessment, a quantitative impairment analysis is performed. We estimate the reporting unit’s fair value using a combination of the income approach based upon projected discounted cash flows of the reporting unit and the market approach based upon the market multiple of comparable publicly traded companies. If the fair value of the reporting unit is less than its carrying amount, an impairment loss is recognized for the excess carrying amount over the fair value computation. Based on the results of the Company’s annual impairment tests completed as of December 31, 2025 and December 31, 2024, the Company recognized a goodwill impairment in our Adventure reporting unit of $ 3,804 during the year ended December 31, 2025, and $ 36,264 during the year ended December 31, 2024, respectively. No impairment of goodwill was recorded during the year ended December 31, 2023. Intangible Assets 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, 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. The Company’s indefinite-lived intangible assets consists of certain tradenames and trademarks that provide Black Diamond Equipment, PIEPS, Rhino-Rack, and MAXTRAX with the exclusive and perpetual rights to manufacture and sell their respective products. Indefinite-lived intangible assets are not amortized; however, they are tested for impairment annually as of December 31 st of each year or more frequently if events or changes in circumstances exist that may indicate impairment. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If, through this qualitative assessment, the conclusion is made that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount, or the Company elects to bypass the qualitative assessment, a quantitative impairment analysis is performed by comparing the indefinite-lived intangible asset’s book value to its estimated fair value. The fair value for indefinite-lived intangible assets is determined through an income approach using the relief-from-royalty method. 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 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. Derivative Financial Instruments The Company uses derivative instruments to hedge currency rate movements on foreign currency denominated sales. The Company enters into forward contracts, option contracts and non-deliverable forwards to manage the impact of foreign currency fluctuations on a portion of its forecasted foreign currency exposure. These derivatives are carried at fair value on the Company’s consolidated balance sheets in prepaid and other current assets, other long-term assets, accrued liabilities, and other long-term liabilities. Changes in fair value of the derivatives not designated as hedge instruments are included in Other, net in the determination of net income. For derivative contracts designated as 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 item is recognized in earnings. 62 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. The Company uses operating budgets and cash flow forecasts to estimate future foreign currency cash flow exposures and to determine the level and timing of derivative transactions intended to mitigate such exposures in accordance with its risk management policies. The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge. The Company does not enter into material derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments. Stock-Based Compensation The Company records compensation expense for all share-based awards granted based on the fair value of the award at the time of the grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions and estimates that the Company believes are reasonable. Stock-based compensation costs for stock awards and restricted stock awards is measured based on the closing market value of the Company’s common stock on the date of the grant. For restricted stock awards subject to market conditions, the fair value of each restricted stock award has been estimated as of the date of grant using the Monte-Carlo pricing model. The Company recognizes the cost of the share-based awards on a straight-line basis over the requisite service period of the award and recognizes forfeitures in the period they occur. Stock options granted have contractual terms of up to ten years . Upon exercise of stock options or vesting of restricted stock awards, the Company issues shares from new shares authorized and reserved for issuance. Revenue Recognition The Company recognizes revenue when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered complete when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions. The Company enters into contractual arrangements with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company does not have long-term contracts that are satisfied over time. Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligation, or transaction price. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts. The Company’s contract terms or historical business practices can give rise to variable consideration such as prompt payment discounts. We estimate the expected prompt payment discounts based on an analysis of historical experience and record cash discounts as a reduction to revenue. At the time of revenue recognition, we also provide for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction of cost of goods sold. Sales commissions are expensed as incurred. These costs are recorded in selling, general and administrative expenses in the accompanying consolidated statements of comprehensive loss. Taxes collected from customers and remitted to government authorities are reported on the net basis and are excluded from sales. 63 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Cost of Goods Sold The expenses that are included in cost of goods sold include all direct product costs and costs related to shipping, certain warehousing or handling, duties and importation fees. Product warranty costs and specific provisions for excess, close-out, or slow-moving inventory are also included in cost of goods sold. Certain warehousing or handling costs which are not associated with the manufacturing of goods for sale are excluded from cost of goods sold. Selling, General and Administrative Expense Selling, general and administrative expense includes personnel-related costs, including stock-based compensation, product development, selling, advertising, visual merchandise, depreciation and amortization, and other general operating expenses. Advertising costs are expensed in the period incurred. Total advertising expense for continuing operations were $ 5,207 , $ 6,046 , and $ 8,385 for the years ended December 31, 2025, 2024, and 2023, respectively. Product Warranty Some of the Company’s products carry warranty provisions for defects in quality and workmanship. Warranty repairs and replacements are recorded in cost of goods sold and a warranty liability is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements. For the years ended December 31, 2025, 2024, and 2023, the Company experienced warranty claims on its products related to continuing operations of $ 838 , $ 927 , and $ 1,007 , respectively. Research and Development Research and development costs are charged to expense as incurred, and are included in selling, general and administrative expenses in the accompanying consolidated statements of comprehensive loss. Total research and development costs for continuing operations were $ 11,928 , $ 12,171 , and $ 12,740 for the years ended December 31, 2025, 2024, and 2023, respectively. Transaction Costs 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 Income taxes are accounted for under the asset and liability method. Income taxes are based on amounts of taxes payable or refundable in the current year and on expected future tax consequences of events that are recognized in the financial statements in different periods than they are recognized in tax returns. As a result of timing of recognition and measurement differences between financial accounting standards and income tax laws, temporary differences arise between amounts of pre-tax financial statement income and taxable income and between reported amounts of assets and liabilities in the consolidated balance sheets and their respective tax bases. Deferred income tax assets and liabilities reported in the consolidated balance sheets reflect estimated future tax effects attributable to these temporary differences and to net operating loss and net capital loss carryforwards, based on enacted tax rates expected to be in effect for years in which the differences are expected to be settled or realized. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. Realization of deferred tax assets is dependent on future taxable income in specific jurisdictions. Valuation allowances are used to reduce deferred tax assets to amounts considered more likely than not to be realized. U.S. deferred income taxes are not provided on undistributed income of foreign subsidiaries where such earnings are considered to be permanently invested. Unremitted taxes on undistributed foreign earnings are not material for the years ended December 31, 2025, 2024, and 2023. The Company releases residual tax effects in accumulated other comprehensive loss through continuing operations as the underlying asset matures or expires. 64 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. 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 (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 (benefit) expense. Concentration of Credit Risk and Sales Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, accounts receivable, and aggregate unrealized gains (losses) on derivative contracts. Risks associated with cash within the United States are mitigated by banking with federally insured, creditworthy institutions; however, there are balances with these institutions that are greater than the Federal Deposit Insurance Corporation insurance limit. The Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management. During the years ended December 31, 2025 and 2024, Recreational Equipment, Inc. (“REI”) accounted for approximately 10 % of the Company’s sales from continuing operations. These sales are included in the Outdoor segment. No other single customer contributed more than 10% of the Company’s sales from continuing operations during these periods. 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, 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. Fair Value Measurements The carrying value of cash, accounts receivable, and accrued liabilities approximate their respective fair values due to the short-term nature and liquidity of these financial instruments. Derivative financial instruments are recorded at fair value based on current market pricing models. Contingent Consideration Liabilities Contingent consideration liabilities are required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired company, such as sales-based milestones and estimated probabilities of achievement. 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 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. Legal Costs and Regulatory Matter Expenses Legal expenses related to the outstanding regulatory matter with the U.S. Consumer Product Safety Commission (“CPSC”) and/or the ongoing investigation by the U.S. Department of Justice, as well as legal expenses related to bringing the Company’s cases against HAP Trading and Caption Management to trial, are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss. All other legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive loss. See Note 16 to our consolidated financial statements for additional information regarding specific legal matters. 65 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Segment Information We operate our business structure within two segments. These segments are defined based on the internal financial reporting used by our chief operating decision maker to allocate resources and assess performance. 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. Recent Accounting Pronouncements Accounting Pronouncements adopted during 2025 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 17 to our consolidated financial statements for additional information regarding income taxes. ​ Accounting Pronouncements issued and not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires a public entity to disclose, in the notes to the financial statements, specified information about certain costs and expenses on an annual and interim basis. The guidance will require all entities to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. The guidance also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. 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. ​ 66 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 2. ACQUISITIONS RockyMounts 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” 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 years ended December 31, 2025 and 2024, were $ 40 and $ 333 , respectively. TRED On September 13, 2023, Clarus entered into a Share Purchase Agreement (the “TRED Purchase Agreement”) to acquire TRED Outdoors Pty Ltd. (“TRED”), which subsequently closed on October 9, 2023. All United States dollar amounts contained herein are based on the exchange rates in effect for Australian dollars ($AUD) and the market value of the Company’s common stock at the time of closing of the acquisition of TRED (the “TRED Acquisition”). 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 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 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 measurements for the acquisition 67 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) 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. At the time of acquisition, the goodwill consisted largely of the growth and profitability expected from these acquisitions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RockyMounts ​ TRED ​ December 5, 2024 ​ October 9, 2023 ​ Estimated Fair Value ​ Number of Shares ​ Estimated Fair Value ​ ​ ​ ​ ​ ​ ​ ​ Cash paid $ 3,840 ​ - ​ $ 5,659 ​ ​ ​ ​ ​ ​ ​ ​ Seller Note ​ 1,878 ​ - ​ ​ - ​ ​ ​ ​ ​ ​ ​ ​ Issuance of shares of Clarus Corporation ​ - ​ 179 ​ ​ 1,069 ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ 609 ​ - ​ ​ 121 ​ ​ ​ ​ ​ ​ ​ ​ Total purchase consideration $ 6,327 ​ 179 ​ $ 6,849 ​ ​ ​ ​ ​ ​ ​ ​ Assets acquired and liabilities assumed ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Cash $ - ​ ​ ​ $ 11 Accounts receivable ​ 160 ​ ​ ​ ​ 1,000 Inventories ​ 928 ​ ​ ​ ​ 1,006 Prepaid and other current assets ​ 85 ​ ​ ​ ​ 11 Property and equipment ​ 97 ​ ​ ​ ​ 195 Other intangible assets ​ 2,366 ​ ​ ​ ​ 3,305 Goodwill ​ 2,741 ​ ​ ​ ​ 2,832 Total assets ​ 6,377 ​ ​ ​ ​ 8,360 ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities $ 50 ​ ​ ​ $ 638 Deferred income taxes ​ - ​ ​ ​ ​ 873 Total liabilities ​ 50 ​ ​ ​ ​ 1,511 ​ ​ ​ ​ ​ ​ ​ ​ Net Book Value Acquired $ 6,327 ​ ​ ​ $ 6,849 ​ 68 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts. ​ In connection with the acquisitions, the Company acquired exclusive rights to RockyMounts’ and TRED’s trademarks, customer relationships, product technologies, and tradenames. The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RockyMounts ​ TRED ​ ​ ​ Average ​ ​ ​ Average ​ Gross Useful Life ​ Gross Useful Life ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangibles subject to amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 1,138 ​ 3.0 years ​ $ 1,249 ​ 8.0 years Product technologies ​ 374 ​ 3.0 years ​ ​ 394 ​ 6.0 years Tradenames ​ 622 ​ 3.0 years ​ ​ 1,662 ​ 12.0 years Non-compete agreements ​ 232 ​ 5.0 years ​ ​ - ​ N/A ​ $ 2,366 ​ 3.2 years ​ $ 3,305 ​ 9.8 years ​ The full amount of goodwill of $ 2,741 at RockyMounts is expected to be deductible for tax purposes. The full amount of goodwill of $ 2,832 at TRED is expected to be non-deductible for tax purposes. No pre-existing relationships existed between the Company, RockyMounts, and TRED or their sellers prior to the acquisition. RockyMounts and TRED revenue and operating income are included in the Adventure segment. Total revenue and net income of RockyMounts from the date of acquisition to December 31, 2024, were not material to the Company’s consolidated financial statements. Total revenue and net income of TRED from the date of acquisition to December 31, 2023, were not material to the Company’s consolidated financial statements. ​ NOTE 3. 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”). The Precision Sport segment engaged in the business of designing, developing, manufacturing, and marketing bullets and ammunition to the military, law enforcement, and commercial/consumer markets. Under the terms of the Precision Sport Purchase Agreement, the Buyer agreed to pay $ 175,000 in cash, which is subject to a customary working capital adjustment. The Company received $ 175,674 in cash under the terms of the Precision Sport Purchase Agreement, which included a preliminary working capital adjustment. As of December 31, 2024, the working capital adjustment had been finalized, with no changes from the preliminary working capital adjustment. The Company recognized a pre-tax gain on such sale of $ 40,585 . The activities of the Precision Sport 69 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) 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: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ Sales $ 10,585 ​ $ 89,950 Cost of goods sold ​ ( 6,543 ) ​ ​ ( 56,980 ) Selling, general and administrative ​ ( 2,062 ) ​ ​ ( 11,639 ) Restructuring charges ​ ( 3 ) ​ ​ ( 47 ) Transaction costs ​ ( 3,440 ) ​ ​ ( 2,162 ) Interest expense, net ​ ( 2,455 ) ​ ​ ( 11,437 ) Other, net ​ ( 38 ) ​ ​ ( 19 ) ​ ​ ​ ​ ​ ​ (Loss) income from operations of discontinued operations ​ ( 3,956 ) ​ ​ 7,666 Gain on sale of discontinued operations ​ 40,585 ​ ​ - ​ ​ ​ ​ ​ ​ Income from discontinued operations before taxes ​ 36,629 ​ ​ 7,666 Income tax expense ​ 479 ​ ​ 2,024 Income from discontinued operations, net of tax $ 36,150 ​ $ 5,642 ​ 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ Depreciation of property and equipment $ - ​ $ 3,452 Amortization of intangible assets $ - ​ $ 2,033 Stock-based compensation $ 5 ​ $ 151 Purchase of property and equipment $ 886 ​ $ 1,848 ​ ​ NOTE 4. INVENTORIES Inventories, as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Finished goods $ 79,584 ​ $ 72,329 Work-in-process ​ 338 ​ ​ 234 Raw materials and supplies ​ 3,106 ​ ​ 9,715 ​ $ 83,028 ​ $ 82,278 ​ ​ ​ ​ ​ ​ ​ 70 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ Land $ 2,850 ​ $ 2,850 Building and improvements ​ 8,356 ​ ​ 5,891 Furniture and fixtures ​ 5,194 ​ ​ 4,958 Computer hardware and software ​ 8,278 ​ ​ 8,380 Machinery and equipment ​ 16,246 ​ ​ 16,795 Construction in progress ​ 968 ​ ​ 3,412 ​ ​ 41,892 ​ ​ 42,286 Less accumulated depreciation ​ ( 23,637 ) ​ ​ ( 24,680 ) ​ $ 18,255 ​ $ 17,606 ​ Depreciation expense for continuing operations was $ 3,641 , $ 4,034 , and $ 4,150 for the years ended December 31, 2025, 2024, and 2023, respectively. ​ NOTE 6. GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill by segment as of December 31, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ ​ ​ Adventure ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross value of goodwill ​ $ 29,507 ​ $ 96,966 ​ $ 126,473 Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates ​ ​ ( 29,507 ) ​ ​ ( 96,966 ) ​ ​ ( 126,473 ) ​ ​ $ - ​ $ - ​ $ - ​ Goodwill by segment as of December 31, 2024 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ ​ ​ Adventure ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross value of goodwill ​ $ 29,507 ​ $ 96,966 ​ $ 126,473 Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates ​ ​ ( 29,507 ) ​ ​ ( 93,162 ) ​ ​ ( 122,669 ) ​ ​ $ - ​ $ 3,804 ​ $ 3,804 ​ 71 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The following table summarizes the changes in goodwill by segment: ​ ​ ​ ​ ​ Adventure ​ ​ ​ Balance at December 31, 2023 $ 39,320 ​ ​ ​ Decrease due to impairment ​ ( 36,264 ) Increase due to acquisition of RockyMounts ​ 2,741 Impact of foreign currency exchange rates ​ ( 1,993 ) ​ ​ ​ Balance at December 31, 2024 $ 3,804 ​ ​ ​ Decrease due to impairment ​ ( 3,804 ) ​ ​ ​ 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 The following table summarizes the changes in indefinite-lived intangible assets: ​ ​ ​ ​ ​ Balance at December 31, 2024 ​ $ 46,750 ​ ​ ​ ​ Decrease due to impairment ​ ​ ( 27,634 ) Decrease due to sale of PIEPS ​ ​ ( 1,704 ) Impact of foreign currency exchange rates ​ ​ 2,188 ​ ​ ​ ​ Balance at December 31, 2025 ​ $ 19,600 ​ 72 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) 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: ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Black Diamond $ 19,600 ​ $ 19,600 PIEPS ​ - ​ ​ 2,899 Rhino-Rack ​ - ​ ​ 20,093 MAXTRAX ​ - ​ ​ 4,158 ​ $ 19,600 ​ $ 46,750 ​ 73 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Other Intangible Assets, net The following table summarizes the changes in gross other intangible assets: ​ ​ ​ ​ ​ Gross balance at December 31, 2024 ​ $ 77,960 ​ ​ ​ ​ Decrease due to sale of PIEPS ​ ​ ( 4,712 ) Impact of foreign currency exchange rates ​ ​ 4,492 ​ ​ ​ ​ Gross balance at December 31, 2025 ​ $ 77,740 ​ Other intangible assets, net of amortization as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Gross ​ ​ ​ Accumulated Amortization ​ ​ ​ Net ​ ​ ​ Weighted Average Useful Life Intangibles subject to amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 59,197 ​ $ ( 41,439 ) ​ $ 17,758 ​ ​ 13.7 years Product technologies ​ 15,943 ​ ​ ( 11,862 ) ​ ​ 4,081 ​ ​ 9.3 years Tradenames ​ 2,368 ​ ​ ( 628 ) ​ ​ 1,740 ​ ​ 9.6 years Non-compete agreements ​ 232 ​ ​ ( 50 ) ​ ​ 182 ​ ​ 5.0 years ​ $ 77,740 ​ $ ( 53,979 ) ​ $ 23,761 ​ ​ 12.6 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Gross ​ ​ ​ Accumulated Amortization ​ ​ ​ Net ​ ​ ​ Weighted Average Useful Life ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 58,737 ​ $ ( 35,715 ) ​ $ 23,022 ​ ​ 13.6 years Product technologies ​ 16,745 ​ ​ ( 10,528 ) ​ ​ 6,217 ​ ​ 9.9 years Tradenames ​ 2,246 ​ ​ ( 197 ) ​ ​ 2,049 ​ ​ 9.5 years Core technologies ​ 232 ​ ​ ( 4 ) ​ ​ 228 ​ ​ 5.0 years ​ $ 77,960 ​ $ ( 46,444 ) ​ $ 31,516 ​ ​ 12.7 years ​ Amortization expense for continuing operations for the years ended December 31, 2025, 2024, and 2023, was $ 8,740 , $ 9,784 , and $ 10,715 , respectively. Future amortization expense for other intangible assets as of December 31, 2025 is as follows: ​ ​ ​ ​ ​ Years Ending December 31, ​ ​ ​ Amortization Expense 2026 ​ $ 6,924 2027 ​ ​ 4,974 2028 ​ ​ 3,491 2029 ​ ​ 2,627 2030 ​ ​ 1,900 Thereafter ​ ​ 3,845 ​ ​ $ 23,761 ​ ​ ​ 74 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 7. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accrued liabilities as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ Accrued payroll and related items $ 2,837 ​ $ 4,054 Accrued bonus ​ 2,005 ​ ​ 1,866 Designated forward exchange contracts ​ 358 ​ ​ - Accrued warranty ​ 1,480 ​ ​ 2,212 Current lease liabilities ​ 3,021 ​ ​ 3,470 Accrued commissions ​ 576 ​ ​ 376 Sales returns and rebates ​ 3,300 ​ ​ 2,145 Contingent consideration liabilities ​ 254 ​ ​ 355 Accrued CPSC regulatory matter ​ 2,500 ​ ​ 2,500 Accrued legal expenses ​ 1,183 ​ ​ 436 Restructuring liabilities ​ 407 ​ ​ 541 Other ​ 6,482 ​ ​ 4,321 ​ $ 24,403 ​ $ 22,276 ​ Other long-term liabilities as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ Long-term lease liabilities $ 9,266 ​ $ 11,288 Contingent consideration liabilities ​ - ​ ​ 254 Other ​ 1,462 ​ ​ 1,212 ​ $ 10,728 ​ $ 12,754 ​ ​ ​ NOTE 8. LONG-TERM DEBT, NET 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 ​ ​ ​ Other debt (a) $ 1,888 ​ ​ 1,888 Less current portion ​ ( 1,888 ) ​ $ - ​ (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 % . ​ ​ NOTE 9. 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 75 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) denominated in currencies other than the U.S. dollar. The Company manages this risk primarily by using currency forward and option contracts. If the anticipated transactions are deemed probable, the resulting relationships are formally designated as cash flow hedges. The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the expected cash flow of the derivative offset, within a range, changes in the expected cash flow of the hedged item. At December 31, 2025, the Company’s derivative contracts had remaining maturities of less than one year . 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, 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 derivative counterparties have strong credit ratings and as a result, the Company does not require collateral to facilitate transactions. The Company held the following contracts designated as hedged instruments as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Notional ​ ​ ​ Latest ​ Amount ​ Maturity ​ ​ ​ ​ Foreign exchange contracts - Canadian Dollars $ 1,208 ​ February 2026 Foreign exchange contracts - Euros € 3,134 ​ February 2026 ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Notional ​ ​ ​ Latest ​ Amount ​ Maturity ​ ​ ​ ​ Foreign exchange contracts - Canadian Dollars $ 1,379 ​ February 2025 Foreign exchange contracts - Euros € 6,711 ​ August 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. (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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classification ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments in asset positions: ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts Prepaid and other current assets ​ $ - ​ $ 600 ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments in liability positions: ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts Accrued liabilities ​ $ 358 ​ $ - ​ ​ ​ 76 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss (“AOCI”) primarily consists of foreign currency translation adjustments and changes in our forward foreign exchange contracts. The components of AOCI, net of tax, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments ​ ​ ​ Unrealized Gains (Losses) on Cash Flow Hedges ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 $ ( 24,858 ) ​ $ 326 ​ $ ( 24,532 ) Other comprehensive income (loss) before reclassifications ​ 8,172 ​ ​ ( 1,530 ) ​ ​ 6,642 Amounts reclassified from other comprehensive income (loss) ​ - ​ ​ 1,201 ​ ​ 1,201 Net current period other comprehensive income ​ 8,172 ​ ​ ( 329 ) ​ ​ 7,843 Balance as of December 31, 2025 $ ( 16,686 ) ​ $ ( 3 ) ​ $ ( 16,689 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments ​ ​ ​ Unrealized Gains (Losses) on Cash Flow Hedges ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2023 $ ( 15,223 ) ​ $ ( 191 ) ​ $ ( 15,414 ) Other comprehensive (loss) income before reclassifications ​ ( 9,635 ) ​ ​ 949 ​ ​ ( 8,686 ) Amounts reclassified from other comprehensive (loss) income ​ - ​ ​ ( 432 ) ​ ​ ( 432 ) Net current period other comprehensive loss ​ ( 9,635 ) ​ ​ 517 ​ ​ ( 9,118 ) Balance as of December 31, 2024 $ ( 24,858 ) ​ $ 326 ​ $ ( 24,532 ) ​ 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 (losses) reclassified from AOCI to the Consolidated Statements of Comprehensive Loss Affected line item in the Consolidated Twelve Months Ended Statements of Comprehensive Loss December 31, 2025 ​ ​ ​ December 31, 2024 Foreign exchange contracts: ​ ​ ​ ​ ​ Sales $ ( 1,585 ) ​ $ 573 Less: Income tax (benefit) expense ​ ( 384 ) ​ ​ 141 Amount reclassified, net of tax $ ( 1,201 ) ​ $ 432 ​ ​ ​ ​ ​ ​ Total reclassifications from AOCI $ ( 1,201 ) ​ $ 432 ​ The Company’s policy is to classify reclassifications of cumulative foreign currency translation associated with continuing operations from AOCI to Other, net. 77 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 11. FAIR VALUE MEASUREMENTS We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 - inputs to the valuation methodology are quoted market prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 - inputs to the valuation methodology are based on prices or valuation techniques that are unobservable. Items Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ 358 ​ $ - ​ $ 358 Contingent consideration liabilities ​ $ - ​ $ - ​ $ 254 ​ $ 254 ​ ​ $ - ​ $ 358 ​ $ 254 ​ $ 612 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ 600 ​ $ - ​ $ 600 ​ ​ $ - ​ $ 600 ​ $ - ​ $ 600 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration liabilities ​ $ - ​ $ - ​ $ 609 ​ $ 609 ​ ​ $ - ​ $ - ​ $ 609 ​ $ 609 ​ Derivative financial instruments are recorded at fair value based on current market pricing models. The Company estimated the initial fair value of the contingent consideration liabilities primarily using the Monte-Carlo pricing model. Significant unobservable inputs used in the valuations of contingent consideration liabilities related to the acquisitions of RockyMounts and TRED included discount rates of 13.0 % and 11.5 %, respectively. Contingent consideration liabilities are subsequently remeasured at the estimated fair value at the end of each reporting period using financial projections of the acquired company, such as sales-based milestones and estimated probabilities of achievement, with the change in fair value recognized in contingent consideration (benefit) expense in the accompanying consolidated statements of comprehensive loss for such period. 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. 78 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RockyMounts ​ TRED ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2023 $ - ​ $ 129 ​ $ 129 ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase due to acquisition of RockyMounts ​ 609 ​ ​ - ​ ​ 609 Fair value adjustments ​ - ​ ​ ( 125 ) ​ ​ ( 125 ) Impact of foreign currency exchange rates ​ - ​ ​ ( 4 ) ​ ​ ( 4 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2024 $ 609 ​ $ - ​ $ 609 ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value adjustments ​ ( 355 ) ​ ​ - ​ ​ ( 355 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2025 $ 254 ​ $ - ​ $ 254 ​ As the contingent consideration liabilities are remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could have resulted in a significantly lower or higher fair value measurement. 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. Items Measured at Fair Value on a Non-Recurring Basis In assessing the recoverability of goodwill and indefinite-lived intangible assets, management estimates the fair value of each reporting unit using Level 3 inputs through a combination of the income approach based upon projected discounted cash flows of the reporting unit and the market approach. The fair value of indefinite-lived intangible assets is estimated using Level 3 inputs through the income approach, specifically the relief-from-royalty method. The fair values are based on revenue and cash flow projections, royalty rates, and discount rates. Impairment of goodwill was $ 3,804 , $ 36,264 , and $ 0 during the years ended December 31, 2025, 2024, and 2023, respectively. Impairment of indefinite-lived intangible assets was $ 27,634 , $ 8,545 , and $ 0 during the years ended December 31, 2025, 2024, and 2023, respectively. See Note 6 for additional information. NOTE 12. STOCKHOLDERS’ EQUITY On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $ 0.025 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $ 0.10 per share on an annualized basis. The declaration and payment of future Quarterly Cash Dividends is subject to the discretion of and approval of the Company’s Board of Directors. In 2025, 2024 and 2023 our total Quarterly Cash Dividends were $ 3,840 , $ 3,831 and $ 3,750 , respectively. On March 4, 2026 , the Company announced that its Board of Directors approved the payment on March 25, 2026 of the Quarterly Cash Dividend of $ 0.025 to the record holders of shares of the Company’s common stock as of the close of business on March 16, 2026 . NOTE 13. EARNINGS (LOSS) PER SHARE 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 79 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 38,393 ​ ​ 38,305 ​ ​ 37,485 Effect of dilutive stock awards ​ - ​ ​ - ​ ​ - Weighted average shares outstanding - diluted ​ 38,393 ​ ​ 38,305 ​ ​ 37,485 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from continuing operations per share: ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 1.21 ) ​ $ ( 2.31 ) ​ $ ( 0.42 ) Diluted ​ ( 1.21 ) ​ ​ ( 2.31 ) ​ ​ ( 0.42 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations per share: ​ ​ ​ ​ ​ ​ ​ ​ Basic $ - ​ $ 0.94 ​ $ 0.15 Diluted ​ - ​ ​ 0.94 ​ ​ 0.15 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 1.21 ) ​ $ ( 1.37 ) ​ $ ( 0.27 ) Diluted ​ ( 1.21 ) ​ ​ ( 1.37 ) ​ ​ ( 0.27 ) ​ For the years ended December 31, 2025, 2024, and 2023, equity awards of 4,553 , 4,596 , and 5,424 , respectively, were outstanding and anti-dilutive and therefore not included in the calculation of net loss per share for these periods. NOTE 14. STOCK-BASED COMPENSATION PLAN 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, 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 80 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Number of options ​ 630 ​ 1,250 ​ 75 Option vesting period ​ 1 - 3 Years ​ 1 - 2 Years ​ 1 Year Grant price (per share) ​ $ 3.21 - $ 4.02 ​ $ 4.63 - $ 6.81 ​ $ 7.91 Dividend yield ​ 2.49 % - 3.12 % ​ 1.47 % - 2.16 % ​ 1.26 % Expected volatility (a) ​ 50.6 % - 53.2 % ​ 50.3 % - 53.1 % ​ 47.8 % Risk-free interest rate ​ 4.01 % - 4.17 % ​ 4.07 % - 4.57 % ​ 3.69 % Expected life (years) (b) ​ 5.50 - 6.69 ​ 5.19 - 5.75 ​ 5.31 Weighted average fair value (per share) ​ $ 1.32 - $ 1.74 ​ $ 1.99 - $ 3.12 ​ $ 2.48 ​ (a) Expected volatility is based upon the Company’s historical volatility. (b) The expected term was determined based upon the underlying terms of the awards and the category and employment history of employee award recipient. Using these assumptions, the fair value of the stock options granted during the years ended December 31, 2025, 2024, and 2023 was $ 1,046 , $ 3,818 , and $ 186 , respectively, which will be amortized as stock-based compensation expense over the vesting period of the options. Restricted Stock Awards Granted: On March 11, 2024, the Company issued and granted employees restricted stock awards of 100 restricted shares under the 2015 Plan, of which 50 and 50 shares will vest and become nonforfeitable on each March 11, 2025 and March 11, 2026, respectively. As these restricted stock awards vest over time, the fair value of the restricted stock was estimated as of the date of grant using the grant price of $ 6.75 per share. The grant date fair value of the restricted stock awards was approximately $ 675 which will be amortized over the expected term of 2 years . Market Condition Restricted Shares Granted: On March 14, 2023, the Company awarded the Executive Chairman 500 restricted shares under the 2015 Plan, of which 250 and 250 shares will vest if, on or before March 14, 2033, the Fair Market Value (as defined in the Plan) of the Company’s common stock shall have equaled or exceeded $ 15.00 and $ 18.00 per share for twenty consecutive trading days, respectively. 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. ​ 81 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ March 14, 2023 ​ ​ ​ Number issued ​ 500 Vesting period ​ $ 15.00 - $ 18.00 stock price target Grant price (per share) ​ $ 9.60 Dividend yield ​ 1.04 % Expected volatility ​ 45.2 % Risk-free interest rate ​ 3.64 % Expected term (years) ​ 2.56 - 3.22 Weighted average fair value (per share) ​ $ 7.84 - $ 8.34 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted stock awards $ 3,418 ​ $ 3,545 ​ $ 2,540 Stock options ​ 2,477 ​ ​ 2,279 ​ ​ 2,601 Total $ 5,895 ​ $ 5,824 ​ $ 5,141 ​ For the years ended December 31, 2025, 2024, and 2023, stock-based compensation costs were classified as selling, general and administrative expense. A summary of changes in outstanding options and restricted stock awards during the year ended December 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options ​ Weighted Average Exercise Price ​ Aggregate Intrinsic Value ​ Restricted Stock Awards Outstanding at December 31, 2024 ​ 3,132 ​ $ 10.18 ​ $ - ​ ​ 1,100 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted ​ 630 ​ ​ 1.66 ​ ​ ​ ​ ​ - Exercised or vested ​ - ​ ​ - ​ ​ ​ ​ ​ ( 50 ) Expired ​ ( 140 ) ​ ​ 13.18 ​ ​ ​ ​ ​ - Cancelled ​ - ​ ​ - ​ ​ ​ ​ ​ - Forfeited ​ ( 55 ) ​ ​ - ​ ​ ​ ​ ​ - Outstanding at December 31, 2025 ​ 3,567 ​ $ 9.01 ​ $ - ​ ​ 1,050 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at December 31, 2025 ​ 2,544 ​ ​ 10.53 ​ $ - ​ ​ ​ ​ 82 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The following table summarizes the exercise price range, weighted average exercise price, and remaining contractual lives by significant ranges for options outstanding and exercisable as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining Life In Years ​ Weighted Average Exercise Price Range Outstanding ​ Exercisable ​ Outstanding ​ Exercisable ​ Exercise Price $ 3.21 - $ 3.71 ​ 80 ​ ​ 60 ​ ​ 9.4 ​ ​ 9.4 ​ $ 3.21 $ 3.71 - $ 27.65 ​ 3,487 ​ ​ 2,484 ​ ​ 4.9 ​ ​ 4.7 ​ $ 10.71 ​ ​ 3,567 ​ ​ 2,544 ​ ​ 5.1 ​ ​ 4.9 ​ $ 10.53 ​ The intrinsic value of options exercised was $ 0 , $ 160 , and $ 351 during the years ended December 31, 2025, 2024, and 2023, respectively. The intrinsic value of restricted stock awards vested was $ 206 , $ 722 , and $ 1,891 during the years ended December 31, 2025, 2024, and 2023, respectively. Total fair value of options vested during the years ended December 31, 2025, 2024, and 2023 was $ 1,721 , $ 1,050 , and $ 3,461 , respectively. Total fair value of restricted stock awards vested during the years ended December 31, 2025, 2024, and 2023 was $ 338 , $ 877 , and $ 1,438 , respectively. The fair value of unvested restricted stock awards is determined based on the market price of our shares of common stock on the grant date or using the Monte-Carlo pricing model. As of December 31, 2025, there were 1,023 unvested stock options and unrecognized compensation cost of $ 539 related to unvested stock options, as well as 1,050 unvested restricted stock awards and unrecognized compensation cost of $ 921 related to unvested restricted stock awards. Unrecognized compensation cost of unvested stock options and restricted stock awards are expected to be recognized over the weighted average period of 0.4 years and 0.3 years, respectively. NOTE 15. RESTRUCTURING Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. 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 $ 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. 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 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. 83 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at December 31, 2025, which are included within accrued liabilities in the consolidated balance sheets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ Adventure ​ Corporate ​ Total Balance at December 31, 2024 ​ $ 541 ​ $ - ​ $ - ​ $ 541 Charges to expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee termination benefits ​ ​ 569 ​ ​ 368 ​ ​ - ​ ​ 937 Exit costs ​ ​ 30 ​ ​ - ​ ​ - ​ ​ 30 Total restructuring charges ​ $ 599 ​ $ 368 ​ $ - ​ $ 967 Cash payments and non-cash charges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash payments ​ ​ ( 733 ) ​ ​ ( 368 ) ​ ​ - ​ ​ ( 1,101 ) Balance at December 31, 2025 ​ $ 407 ​ $ - ​ $ - ​ $ 407 ​ ​ NOTE 16. COMMITMENTS AND CONTINGENCIES As a consumer goods manufacturer and distributor, the Company faces the risk of product liability and related lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or other returns of goods. The Company is therefore vulnerable to various personal injury and property damage lawsuits relating to its products and incidental to its business. The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the ordinary course of business. Anticipated costs related to litigation matters are accrued when it is both probable that a liability has been incurred and the amount can be reasonably estimated. 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 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; however, the actual amounts of such possible losses cannot currently be reasonably estimated by the Company. It is possible that, as additional information becomes available, the Company may subsequently determine that it may incur losses from such contingencies materially in excess of the amounts initially accrued by the Company which could have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows. See Item 3. “Legal Proceedings.” and Item 1A. “Risk Factors.” Legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive loss except as described below. U.S. Consumer Product Safety Commission In January 2021, Black Diamond Equipment, Ltd. (“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. The proposed new cradle solution was designed to improve transceiver safety by locking the transceiver into “send” mode prior to use so that it would not switch unexpectedly out of “send” mode. BDEL also requested approval for the CPSC Fast-Track Program for a voluntary product recall to implement this cradle solution. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in March 2021. 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” 84 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (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. 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. BDEL responded to the CPSC’s investigation by letter dated March 31, 2023, accompanied with documents responsive to the CPSC’s requests. 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, 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. Department of Justice for further proceedings. 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. John C. 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 fine against Mr. Walbrecht personally. Pursuant to the Company’s by-laws, the Company has agreed to indemnify Mr. 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, 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. Walbrecht. 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. Department of Justice. During the year ended December 31, 2024, the Company recorded a liability of $ 2,500 representing the low end of the range of our estimated exposure. The Company does not have a better estimate of the loss; therefore the low-end of the range was recorded as an accrued liability during the first quarter of 2024 and a corresponding expense is included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss. 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, 85 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (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. 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, 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. HAP Trading, LLC and Harsh A. Padia 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. 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. Williams v. Caption Management, LLC, et al. / Clarus Corporation v. Caption Management, LLC, et al. 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. 86 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) NOTE 17. INCOME TAXES Consolidated loss from continuing operations before income taxes consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. operations ​ $ ( 26,711 ) ​ $ ( 34,575 ) ​ $ ( 19,929 ) Foreign operations ​ ​ ( 30,378 ) ​ ​ ( 36,010 ) ​ ​ ( 150 ) Loss from continuing operations before income tax ​ $ ( 57,089 ) ​ $ ( 70,585 ) ​ $ ( 20,079 ) ​ The components of the benefit for income taxes attributable to continuing operations consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Current: ​ ​ ​ ​ ​ ​ ​ ​ Federal $ 79 ​ $ - ​ $ - State and local ​ 234 ​ ​ 26 ​ ​ 90 Foreign ​ 460 ​ ​ 2,642 ​ ​ 833 ​ ​ 773 ​ ​ 2,668 ​ ​ 923 Deferred: ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ 372 ​ ​ 25,835 ​ ​ ( 4,972 ) State and local ​ ( 48 ) ​ ​ ( 1,271 ) ​ ​ 300 Foreign ​ ( 11,630 ) ​ ​ ( 9,380 ) ​ ​ ( 542 ) ​ ​ ( 11,306 ) ​ ​ 15,184 ​ ​ ( 5,214 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax (benefit) expense $ ( 10,533 ) ​ $ 17,852 ​ $ ( 4,291 ) ​ The allocation of income tax (benefit) expense between continuing and discontinued operations was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations $ ( 10,533 ) ​ $ 17,852 ​ $ ( 4,291 ) Discontinued operations ​ - ​ ​ 479 ​ ​ 2,024 ​ $ ( 10,533 ) ​ $ 18,331 ​ $ ( 2,267 ) ​ The Company’s foreign operations that are considered to be permanently reinvested have statutory tax rates of approximately 19 % to 30 %. The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the Company’s financial statements: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ ​ ​ ​ ​ ​ U.S. Federal statutory income tax benefit $ ( 11,990 ) ​ ( 21.0 ) % 87 Table of Contents 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) ​ ( 211 ) ​ ( 0.4 ) ​ Foreign tax effects ​ ​ ​ ​ ​ Australia ​ ​ ​ ​ ​ Statutory tax rate difference between Australia and U.S. ​ ( 2,844 ) ​ ( 5.0 ) ​ Changes in valuation allowances ​ 1,328 ​ 2.3 ​ Other ​ ( 223 ) ​ ( 0.4 ) ​ Austria ​ ​ ​ ​ ​ Sales Gain/Loss ​ ( 1,376 ) ​ ( 2.4 ) ​ Other ​ 322 ​ 0.6 ​ Other foreign jurisdictions ​ 60 ​ 0.1 ​ Tax Credit ​ ​ ​ ​ ​ Research and development tax credits ​ ( 448 ) ​ ( 0.8 ) ​ Changes in valuation allowances ​ 4,109 ​ 7.2 ​ Nontaxable or nondeductible items ​ ​ ​ ​ ​ Executive compensation limitation ​ 927 ​ 1.6 ​ Other ​ 236 ​ 0.4 ​ Changes in unrecognized tax benefits ​ ( 157 ) ​ ( 0.3 ) ​ Other adjustments ​ ( 266 ) ​ ( 0.4 ) ​ Income tax benefit $ ( 10,533 ) ​ ( 18.5 ) % ​ (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, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Statutory income tax benefit ​ ( 21.0 ) % ​ ( 21.0 ) % Increase (decrease) in income taxes resulting from: ​ ​ ​ ​ ​ ​ Foreign taxes ​ ( 1.6 ) ​ ​ 0.6 ​ State income taxes, net of federal income taxes ​ ( 0.2 ) ​ ​ ( 1.9 ) ​ Income tax credits ​ ( 5.0 ) ​ ​ ( 6.6 ) ​ Stock options ​ 1.1 ​ ​ 1.2 ​ Change in effective state rate ​ ( 1.8 ) ​ ​ - ​ Deferred tax asset write-offs ​ - ​ ​ 13.0 ​ Executive compensation limitation ​ 1.4 ​ ​ 4.4 ​ Change in valuation allowance ​ 41.7 ​ ​ ( 13.0 ) ​ Impairment of goodwill ​ 10.8 ​ ​ - ​ Research and development expenditure ​ 0.6 ​ ​ 1.9 ​ Other ​ ( 0.7 ) ​ ​ - ​ Income tax expense (benefit) ​ 25.3 % ​ ( 21.4 ) % ​ 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. 88 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Deferred income tax assets and liabilities are determined based on the difference between the financial reporting carrying amounts and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. Significant components of the Company’s existing deferred income tax assets and liabilities as of December 31, 2025 and 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ Deferred tax assets: ​ ​ ​ ​ ​ Net operating loss, capital loss and research & experimentation credit carryforwards $ 16,493 ​ $ 6,358 Capitalized research and development costs ​ 8,950 ​ ​ 9,221 Capitalized costs to self-constructed property ​ 790 ​ ​ 5,411 Non-cash compensation ​ 2,233 ​ ​ 2,064 Accrued liabilities ​ 1,629 ​ ​ 1,878 Reserves and other ​ 4,898 ​ ​ 6,493 Depreciation ​ 231 ​ ​ - Lease liabilities ​ 2,832 ​ ​ 3,472 Business Interest Limitation ​ 2,244 ​ ​ 761 ​ ​ 40,300 ​ ​ 35,658 Valuation allowance ​ ( 29,315 ) ​ ​ ( 23,344 ) Net deferred tax assets ​ 10,985 ​ ​ 12,314 Deferred tax liabilities: ​ ​ ​ ​ ​ Depreciation ​ - ​ ​ ( 1,155 ) Intangibles ​ ( 9,253 ) ​ ​ ( 18,983 ) Right-of-use assets ​ ( 2,485 ) ​ ​ ( 3,046 ) Other ​ ( 610 ) ​ ​ ( 1,304 ) ​ ​ ( 12,348 ) ​ ​ ( 24,488 ) ​ ​ ​ ​ ​ ​ Total $ ( 1,363 ) ​ $ ( 12,174 ) ​ Certain deferred income tax balances are not netted as they represent deferred amounts applicable to different taxing jurisdictions. The Company has provided a full valuation allowance against all of the U.S. deferred tax assets as of December 31, 2025, because the ultimate realization of those assets does not meet the more-likely-than-not criteria. In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and net operating loss and credit carryforwards expire. The estimates and judgments associated with the Company’s valuation allowance on deferred tax assets are considered critical due to the amount of deferred tax assets recorded by the Company on its consolidated balance sheets and the judgment required in determining the Company’s future taxable income. The need for a valuation allowance is reassessed at each reporting period. 89 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) The net change in the valuation allowance for deferred income tax assets was $ 5,971 , $ 22,630 , and ($ 2,609 ) during the years ended December 31, 2025, 2024, and 2023, respectively. A roll forward of our valuation allowance for deferred income tax assets for the years ended December 31, 2025, 2024, and 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at Beginning of Year ​ Charged to Costs and Expenses ​ Other Adjustments ​ Balance at End of Year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 $ 3,323 ​ $ 26 ​ $ ( 2,635 ) ​ $ 714 2024 $ 714 ​ $ 21,038 ​ $ 1,592 ​ $ 23,344 2025 $ 23,344 ​ $ 7,204 ​ $ ( 1,233 ) ​ $ 29,315 ​ As of December 31, 2025, the Company has net operating loss carryforwards (“NOLs”) and research and experimentation credit for U.S. 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. The Company conducts its business globally. As a result, the Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions and are subject to examination for the open tax years in the U.S. 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 (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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning of year $ 2,863 ​ $ 890 ​ $ 813 Additions for current year tax positions ​ 1,713 ​ ​ 1,815 ​ ​ 98 Additions for prior year tax positions ​ 305 ​ ​ 310 ​ ​ 8 Reductions for prior year tax positions ​ ( 27 ) ​ ​ ( 16 ) ​ ​ - Reductions due to statute expirations ​ ( 106 ) ​ ​ ( 136 ) ​ ​ ( 29 ) Balance, end of year $ 4,748 ​ $ 2,863 ​ $ 890 ​ 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. As a result, the Company classified $ 4,202 and $ 2,438 of its unrecognized tax benefit as a reduction to deferred tax assets as of December 31, 2025 and 2024, respectively. Interest and penalty expense recognized related to uncertain tax positions were not significant during the years ending December 31, 2025, 2024, and 2023, respectively. Total accrued interest and penalties as of December 31, 2025 and 2024, were not significant. 90 Table of Contents 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, ​ 2025 ​ ​ ​ Federal $ - State ​ ​ Missouri ​ ( 106 ) Other state ​ ( 22 ) Foreign ​ ​ Australia ​ 962 Austria ​ 96 Other foreign ​ 6 Total income tax paid $ 936 ​ ​ NOTE 18. SEGMENT INFORMATION We operate our business structure within two segments. These segments are defined based on the internal financial reporting used by our chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s CODM is the Executive Chairman and Director (Principal Executive Officer). The CODM allocates resources based on revenue and operating income primarily through the annual budget and periodic forecasting process. The CODM considers budget-to-actual variances when making decisions about allocating capital and personnel to the segments. 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: ● 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: high-performance, activity-based apparel (such as shells, insulation, midlayers, pants, and logowear); rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear); technical backpacks and high-end day packs; trekking poles; headlamps and lanterns; and gloves and mittens. 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, 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. While there are multiple products sold, the terms and nature of revenue recognition policy is similar for all segments. 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: ​ 91 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 88,743 ​ $ 17,380 ​ $ 106,123 International sales ​ 88,120 ​ ​ 56,197 ​ ​ 144,317 Total sales ​ 176,863 ​ ​ 73,577 ​ ​ 250,440 Cost of goods sold ​ 115,468 ​ ​ 47,546 ​ ​ ​ Inventory fair value of purchase accounting ​ - ​ ​ 120 ​ ​ ​ Other inventory reserves ​ 949 ​ ​ 3,381 ​ ​ ​ Selling, general and administrative ​ 56,295 ​ ​ 35,067 ​ ​ ​ Restructuring charges ​ 599 ​ ​ 368 ​ ​ ​ Transaction costs ​ 614 ​ ​ 40 ​ ​ ​ Contingent consideration benefit ​ - ​ ​ ( 355 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 2,825 ​ ​ - ​ ​ ​ Impairment of goodwill ​ - ​ ​ 3,804 ​ ​ ​ Impairment of indefinite-lived intangible assets ​ 1,565 ​ ​ 26,069 ​ ​ ​ Segment operating loss $ ( 1,452 ) ​ $ ( 42,463 ) ​ $ ( 43,915 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 15,766 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 619 Other, net ​ ​ ​ ​ ​ ​ ​ 1,973 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 57,089 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 91,202 ​ $ 14,543 ​ $ 105,745 International sales ​ 92,366 ​ ​ 66,204 ​ ​ 158,570 Total sales ​ 183,568 ​ ​ 80,747 ​ ​ 264,315 Cost of goods sold ​ 116,522 ​ ​ 48,611 ​ ​ ​ Inventory fair value of purchase accounting ​ - ​ ​ 61 ​ ​ ​ Other inventory reserves ​ 4,192 ​ ​ 2,310 ​ ​ ​ Selling, general and administrative ​ 59,351 ​ ​ 37,212 ​ ​ ​ Restructuring charges ​ 1,349 ​ ​ 599 ​ ​ ​ Transaction costs ​ 65 ​ ​ 396 ​ ​ ​ Contingent consideration benefit ​ - ​ ​ ( 125 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 3,088 ​ ​ - ​ ​ ​ Impairment of goodwill ​ - ​ ​ 36,264 ​ ​ ​ Impairment of indefinite-lived intangible assets ​ - ​ ​ 8,545 ​ ​ ​ Segment operating loss $ ( 999 ) ​ $ ( 53,126 ) ​ $ ( 54,125 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 16,254 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 1,467 Other, net ​ ​ ​ ​ ​ ​ ​ ( 1,673 ) Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 70,585 ) 92 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 99,031 ​ $ 13,354 ​ $ 112,385 International sales ​ 105,022 ​ ​ 68,613 ​ ​ 173,635 Total sales ​ 204,053 ​ ​ 81,967 ​ ​ 286,020 Cost of goods sold ​ 135,165 ​ ​ 48,910 ​ ​ ​ Inventory fair value of purchase accounting ​ - ​ ​ 64 ​ ​ ​ Other inventory reserves ​ 4,370 ​ ​ - ​ ​ ​ Selling, general and administrative ​ 66,443 ​ ​ 33,311 ​ ​ ​ Restructuring charges ​ 2,754 ​ ​ 306 ​ ​ ​ Transaction costs ​ - ​ ​ 30 ​ ​ ​ Contingent consideration expense ​ - ​ ​ ( 1,565 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 476 ​ ​ - ​ ​ ​ Segment operating (loss) income $ ( 5,155 ) ​ $ 911 ​ $ ( 4,244 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 16,863 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 67 Other, net ​ ​ ​ ​ ​ ​ ​ 961 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 20,079 ) ​ There were no intercompany sales between the Outdoor and Adventure segments for the periods presented. Total assets by segment, as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ Outdoor $ 145,902 ​ $ 137,062 Adventure ​ 84,086 ​ ​ 120,063 Corporate ​ 19,040 ​ ​ 36,969 ​ $ 249,028 ​ $ 294,094 ​ 93 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Capital expenditures, depreciation and amortization by segment is as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 Capital expenditures: ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 4,682 ​ $ 4,059 ​ $ 1,542 Adventure ​ 480 ​ ​ 1,779 ​ ​ 2,080 Total capital expenditures $ 5,162 ​ $ 5,838 ​ $ 3,622 Depreciation: ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 2,177 ​ $ 2,588 ​ $ 2,848 Adventure ​ 1,464 ​ ​ 1,446 ​ ​ 1,302 Total depreciation $ 3,641 ​ $ 4,034 ​ $ 4,150 Amortization: ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 973 ​ $ 1,142 ​ $ 1,057 Adventure ​ 7,767 ​ ​ 8,642 ​ ​ 9,658 Total amortization $ 8,740 ​ $ 9,784 ​ $ 10,715 ​ Total long-lived assets by geographic region, as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ United States $ 14,698 ​ $ 17,302 Australia ​ 7,877 ​ ​ 9,353 China ​ 2,174 ​ ​ 1,431 Austria ​ 3,872 ​ ​ 2,435 Other countries ​ 1,111 ​ ​ 910 ​ $ 29,732 ​ $ 31,431 ​ ​ ​ NOTE 19. LEASES The Company has entered into leases for certain facilities, vehicles and other equipment. Our leases have remaining contractual terms of up to ten years , some of which include options to extend the leases for up to five years . Our lease costs are primarily related to facility leases for inventory warehousing, administration offices and vehicles. The Company’s finance leases are immaterial. Lease ROU assets and liabilities as of December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Classification ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ Lease ROU assets ​ Other long-term assets ​ $ 11,477 ​ $ 13,825 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ Current lease liabilities ​ Accrued liabilities ​ $ 3,021 ​ $ 3,470 Noncurrent lease liabilities ​ Other long-term liabilities ​ $ 9,266 ​ $ 11,288 ​ 94 Table of Contents CLARUS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (in thousands, except per share amounts) Lease costs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Affected line item in the Consolidated ​ Year Ended ​ ​ Statements of Comprehensive Loss ​ December 31, 2025 ​ December 31, 2024 Lease costs ​ Cost of goods sold, Selling, general and administrative ​ $ 3,712 ​ $ 3,956 Variable lease costs ​ Cost of goods sold, Selling, general and administrative ​ ​ 1,877 ​ ​ 900 Short-term lease costs ​ Cost of goods sold, Selling, general and administrative ​ ​ 438 ​ ​ 635 ​ ​ ​ ​ $ 6,027 ​ $ 5,491 ​ The maturity of lease liabilities as of December 31, 2025 are as follows: ​ ​ ​ Years Ending December 31, Lease Payments 2026 $ 3,505 2027 ​ 2,786 2028 ​ 2,807 2029 ​ 2,657 2030 ​ 1,097 Thereafter ​ 804 Total future lease payments ​ 13,656 Less: amount representing interest ​ ( 1,369 ) Present value of future lease payments ​ 12,287 Less: current lease obligations ​ ( 3,021 ) Long-term lease obligations $ 9,266 ​ ​ ​ ​ As of December 31, 2025, our leases have a weighted-average remaining lease term of 4.67 years and a weighted-average discount rate of 4.42 %. ​ NOTE 20. RELATED PARTY TRANSACTIONS As part of the TRED Acquisition, on October 9, 2023, the Company paid a fee in the amount of $ 150 to Kanders & Company, Inc. (“Kanders & Company”) in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, performing due diligence and negotiating the TRED Acquisition. Mr. Warren B. 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. ​ ​ ​ ​ 95 Table of Contents CLARUS CORPORATION ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​