What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-06 · 174 added, 460 removed, 402 unchanged (61% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

September 30, 2025

March 31, 2026

December 31, 2025

15 unchanged sentences

Income tax payable

Current portion of long-term debt

Total current liabilities

16 unchanged sentences

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share amounts)

Three Months Ended

September 30, 2025

September 30, 2024

Domestic sales

International sales

Cost of goods sold

Operating expenses

Selling, general and administrative

Restructuring charges

Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Total operating expenses

Operating loss

Other (expense) income

Interest income, net

Total other (expense) income, net

Loss before income tax

Income tax benefit

Other comprehensive income, net of tax:

Foreign currency translation adjustment

Unrealized gain (loss) on hedging activities

Other comprehensive income

Comprehensive income

Net loss per share:

Weighted average shares outstanding:

See accompanying notes to condensed consolidated financial statements.

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands, except per share amounts)

Nine Months Ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Domestic sales

5 unchanged sentences

Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Impairment of indefinite-lived intangible assets

Total operating expenses

3 unchanged sentences

Loss before income tax

Income tax benefit

Loss from continuing operations

Discontinued operations, net of tax

Net (loss) income

Income tax expense (benefit)

Other comprehensive income, net of tax:

Foreign currency translation adjustment

Unrealized (loss) gain on hedging activities

Unrealized loss on hedging activities

Other comprehensive income

Comprehensive (loss) income

Loss from continuing operations per share:

Net (loss) income per share:

Comprehensive loss

Net loss per share:

Weighted average shares outstanding:

3 unchanged sentences

(In thousands)

Nine Months Ended

September 30, 2025

September 30, 2024

Three Months Ended

March 31, 2026

March 31, 2025

Cash Flows From Operating Activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property and equipment

Amortization of other intangible assets

Impairment of indefinite-lived intangible assets

Loss (gain) on sale of businesses

Accretion of notes payable

Amortization of debt issuance costs

Loss (gain) on disposition of property and equipment

(Gain) loss on disposition of property and equipment

Noncash lease expense

Contingent consideration benefit

Stock-based compensation

Deferred income taxes

Changes in operating assets and liabilities, net of disposition:

Changes in operating assets and liabilities, net of dispositions:

Accounts receivable

4 unchanged sentences

Cash Flows From Investing Activities:

Proceeds from sale of businesses, net of cash

Proceeds from disposition of property and equipment

Purchase of intangible assets

Purchases of property and equipment

Net cash provided by investing activities

Net cash used in investing activities

Cash Flows From Financing Activities:

Proceeds from revolving credit facilities

Repayments on revolving credit facilities

Repayments on term loans and other debt

Proceeds from issuance of term loans and other debt

Purchase of treasury stock

Proceeds from exercise of options

Cash dividends paid

Net cash used in financing activities

Effect of foreign exchange rates on cash

Change in cash

Cash, beginning of year

Cash, end of period

Effect of foreign exchange rates on cash and restricted cash

Change in cash and restricted cash

Cash and restricted cash, beginning of year

Cash and restricted cash, end of period

Supplemental Disclosure of Cash Flow Information:

12 unchanged sentences

Balance, December 31, 2024

Other comprehensive loss

Other comprehensive income

Cash dividends ($ 0.025 per share)

3 unchanged sentences

Balance, March 31, 2025

Other comprehensive income

Cash dividends ($ 0.025 per share)

Stock-based compensation expense

Proceeds from exercise of options

Balance, June 30, 2024

Other comprehensive income

Cash dividends ($ 0.025 per share)

Stock-based compensation expense

Proceeds from exercise of options

Balance, September 30, 2024

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except per share amounts)

Treasury Stock

6 unchanged sentences

Stock-based compensation expense

Proceeds from exercise of options

Shares issued from restricted stock units

Balance, March 31, 2026

Other comprehensive income

Cash dividends ($ 0.025 per share)

Stock-based compensation expense

Balance, June 30, 2025

Other comprehensive income

Cash dividends ($ 0.025 per share)

Stock-based compensation expense

Balance, September 30, 2025

See accompanying notes to condensed consolidated financial statements .

3 unchanged sentences

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and its subsidiaries (which may be collectively referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 and 2024, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q, and Article 10 of Regulation S-X.

The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and its subsidiaries (which may be collectively referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q, and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments, except otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included.

The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be obtained for the year ending December 31, 2025.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments, except as otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included.

The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be obtained for the year ending December 31, 2026.

These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2026.

2 unchanged sentences

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

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

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

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

2 unchanged sentences

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 $ 410 , which is included in other , net in the condensed consolidated statements of comprehensive (loss) income.

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 condensed consolidated statements of comprehensive (loss) income, and therefore results were not classified as discontinued operations.

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 condensed consolidated statements of comprehensive loss, and therefore results were not classified as discontinued operations.

Use of Estimates

8 unchanged sentences

Restricted Cash

Included within cash in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, is restricted cash of $ 1,497 and $ 1,397 , respectively, primarily related to a long-term lease agreement.

Cash is restricted when withdrawal or general use is contractually or legally restricted.

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 condensed consolidated balance sheets.

The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows as of March 31, 2026 and December 31, 2025.

March 31, 2026

December 31, 2025

Restricted cash included in Other long-term assets

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

Recent Accounting Pronouncements

Accounting Pronouncements issued and not yet adopted

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

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

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

The guidance makes several other changes to the disclosure requirements.

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

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

Early adoption is permitted.

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

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

6 unchanged sentences

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

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

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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 endings December 31, 2025 and December 31, 2026, respectively (the “RockyMounts Contingent Consideration”).

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

See Note 11 for discussion regarding the valuation of the RockyMounts Contingent Consideration as of September 30, 2025.

The acquisition was accounted for as a business combination.

The Company believes the acquisition of RockyMounts provides the Company with a greater combined global revenue base, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses.

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

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

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

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

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

Goodwill for RockyMounts is included in the Adventure segment.

The goodwill consists largely of the growth and profitability expected from this acquisition.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

December 5, 2024

Estimated Fair Value

Contingent consideration

Total purchase consideration

Assets acquired and liabilities assumed

Accounts receivable

Prepaid and other current assets

Property and equipment

Other intangible assets

Accounts payable and accrued liabilities

Total liabilities

Net Book Value Acquired

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 acquisition, the Company acquired exclusive rights to RockyMounts’ 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:

Intangibles subject to amortization

Customer relationships

Product technologies

Non-compete agreements

The full amount of goodwill of $ 2,741 at RockyMounts is expected to be deductible for tax purposes.

No pre-existing relationships existed between the Company and RockyMounts or their sellers prior to the acquisition.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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.

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 segment have been segregated and reported as discontinued operations for the nine months ended September 30, 2024.

There was no activity in discontinued operations during the three months ended September 30, 2024.

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

Nine Months Ended

September 30, 2024

Cost of goods sold

Selling, general and administrative

Restructuring charges

Transaction costs

Interest expense, net

Loss from operations of discontinued operations

Gain on sale of discontinued operations

Income from discontinued operations before taxes

Income tax expense

Income from discontinued operations, net of tax

In connection with the sale of the Precision Sport segment, all interest expense related to 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 is allocated to discontinued operations in our condensed consolidated financial statements for the nine months ended September 30, 2024.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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

Nine Months Ended

September 30, 2024

Stock-based compensation

Purchase of property and equipment

Inventories, as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Inventories, as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

December 31, 2025

2 unchanged sentences

Raw materials and supplies

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

PROPERTY AND EQUIPMENT

Property and equipment, net, as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Property and equipment, net, as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

December 31, 2025

5 unchanged sentences

Less accumulated depreciation

Depreciation expense for continuing operations for the three months ended September 30, 2025 and 2024 was $ 894 and $ 980 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 2,654 and $ 3,051 , respectively.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Depreciation expense for the three months ended March 31, 2026 and 2025 was $ 987 and $ 883 , respectively.

GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the balances in goodwill by segment:

Accumulated goodwill impairments

Balance at December 31, 2024

Balance at September 30, 2025

Goodwill by segment as of March 31, 2026 and December 31, 2025 was as follows:

Gross value of goodwill

Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates

Indefinite-Lived Intangible Assets

The following table summarizes the changes in indefinite-lived intangible assets:

Balance at December 31, 2024

Decrease due to impairment

Decrease due to sale of PIEPS

Impact of foreign currency exchange rates

Balance at September 30, 2025

Management performs an interim 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.

As described above, 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

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

our Outdoor reporting unit exceeded its estimated related fair value, thus an impairment of the PIEPS trademark of $ 1,565 was recorded.

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

Trademarks classified as indefinite-lived intangible assets by brand as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

December 31, 2024

Black Diamond

Trademarks classified as indefinite-lived intangible assets of $ 19,600 as of March 31, 2026 and December 31, 2025 were all related to the Black Diamond brand.

Other Intangible Assets, net

1 unchanged sentence

Gross balance at December 31, 2025

Decrease due to sale of PIEPS

Impact of foreign currency exchange rates

Gross balance at September 30, 2025

Other intangible assets, net of amortization as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Gross balance at March 31, 2026

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Other intangible assets, net of amortization as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

Accumulated Amortization

4 unchanged sentences

Non-compete agreements

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

December 31, 2025

4 unchanged sentences

Core technologies

Amortization expense for continuing operations for the three months ended September 30, 2025 and 2024, was $ 2,149 and $ 2,416 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 6,586 and $ 7,316 , respectively.

Future amortization expense for other intangible assets as of September 30, 2025 is as follows:

Amortization expense for the three months ended March 31, 2026 and 2025, was $ 1,937 and $ 2,224 , respectively.

Future amortization expense for other intangible assets as of March 31, 2026 is as follows:

Years Ending December 31,

Amortization Expense

2025 (excluding the nine months ended September 30, 2025)

2026 (excluding the three months ended March 31, 2026)

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES

Accrued liabilities as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Accrued liabilities as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

December 31, 2025

10 unchanged sentences

Restructuring liabilities

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Other long-term liabilities as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Other long-term liabilities as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

December 31, 2025

Long-term lease liabilities

Contingent consideration liabilities

LONG-TERM DEBT

Long-term debt as of September 30, 2025 and December 31, 2024, was as follows:

September 30, 2025

December 31, 2024

Revolving credit facility (a)

Other debt (b)

Term loan (c)

Less current portion

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

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

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

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

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

As of September 30, 2025 and December 31, 2024, the borrowing rate was 6.5 % .

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

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

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

At September 30, 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 $ 1,143 as of September 30, 2025.

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

As of September 30, 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 hedging instruments as of September 30, 2025 and December 31, 2024:

September 30, 2025

Foreign exchange contracts - Canadian Dollars

February 2026

Foreign exchange contracts - Euros

February 2026

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

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

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

If the anticipated transactions were deemed probable, the resulting relationships were formally designated as cash flow hedges.

The Company accounted for these contracts as cash flow hedges and tested 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.

The Company maintained no derivative contracts as of March 31, 2026.

The Company held the following contracts designated as hedging instruments as of December 31, 2025:

December 31, 2025

2 unchanged sentences

Foreign exchange contracts - Euros

February 2026

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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

Gains (losses) of ($ 641 ) and $ 14 were reclassified to sales during the three months ended September 30, 2025 and 2024, respectively, and ($ 1,068 ) and $ 231 were reclassified to sales during the nine months ended September 30, 2025 and 2024, respectively.

The following table presents the balance sheet classification and fair value of derivative instruments as of September 30, 2025 and December 31, 2024:

Gains of $ 0 and $ 76 were reclassified to sales during the three months ended March 31, 2026 and 2025, respectively.

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

Classification

September 30, 2025

December 31, 2025

Derivative instruments in asset positions:

Designated forward exchange contracts

Prepaid and other current assets

Derivative instruments in liability positions:

1 unchanged sentence

Accrued liabilities

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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 following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2025:

Foreign Currency Translation Adjustments

Unrealized Gains (Losses) on Cash Flow Hedges

Balance as of June 30, 2025

Other comprehensive income before reclassifications

Amounts reclassified from other comprehensive income

Net current period other comprehensive income

Balance as of September 30, 2025

The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2024:

The following table sets forth the changes in AOCI, net of tax, for the three months ended March 31, 2026:

Foreign Currency Translation Adjustments

Unrealized Gains (Losses) on Cash Flow Hedges

Balance as of June 30, 2024

Other comprehensive income (loss) before reclassifications

Amounts reclassified from other comprehensive income (loss)

Net current period other comprehensive income (loss)

Balance as of September 30, 2024

The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2025:

Balance as of December 31, 2025

Current period other comprehensive income

Balance as of March 31, 2026

The following table sets forth the changes in AOCI, net of tax, for the three months ended March 31, 2025:

Foreign Currency Translation Adjustments

4 unchanged sentences

Net current period other comprehensive income (loss)

Balance as of September 30, 2025

Balance as of March 31, 2025

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2024:

Foreign Currency Translation Adjustments

Unrealized Gains (Losses) on Cash Flow Hedges

Balance as of December 31, 2023

Other comprehensive income before reclassifications

Amounts reclassified from other comprehensive income (loss)

Net current period other comprehensive income

Balance as of September 30, 2024

The effects on net income of amounts reclassified from unrealized gains (losses) on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2025 and 2024, were as follows:

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

There were no unrealized gains on cash flow hedges for foreign exchange contracts for the three months ended March 31, 2026.

The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three months ended March 31, 2025, were as follows:

Gains reclassified from AOCI to the Consolidated Statements of Comprehensive Loss

Affected line item in the Consolidated

Three Months Ended

Nine Months Ended

Statements of Comprehensive (Loss) Income

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Statements of Comprehensive Loss

March 31, 2025

Foreign exchange contracts:

Income tax (benefit) expense

Income tax expense

Amount reclassified, net of tax

6 unchanged sentences

Level 3 - inputs to the valuation methodology are based on prices or valuation techniques that are unobservable.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Items Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 were as follows:

September 30, 2025

Designated forward exchange contracts

Assets and liabilities measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

Contingent consideration liabilities

2 unchanged sentences

Contingent consideration liabilities

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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

Pursuant to the purchase of RockyMounts during the year ended December 31, 2024, the purchase price paid for the RockyMounts assets included the payment of additional contingent consideration of up to $ 2,000 in cash if certain net sales thresholds are met for the years ending December 31, 2025 and December 31, 2026, respectively.

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 valuation of contingent consideration liabilities related to the acquisition of RockyMounts included a discount rate of 13.0 %.

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 in the accompanying consolidated statements of comprehensive (loss) income 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.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The following table summarizes the changes in contingent consideration liabilities:

1 unchanged sentence

Fair value adjustments

Balance at September 30, 2025

Balance at March 31, 2026

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.

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

As of September 30, 2025, the net sales threshold required for the payment of the 2025 portion of the RockyMounts contingent consideration is not expected to be met during the measurement period ending December 31, 2025.

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.

STOCKHOLDERS’ EQUITY

1 unchanged sentence

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

On November 5, 2025 , the Company announced that its Board of Directors approved the payment on November 26, 2025 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 November 17, 2025 .

On May 6, 2026 , the Company announced that its Board of Directors approved the payment on May 27, 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 May 18, 2026 .

EARNINGS (LOSS) PER SHARE

1 unchanged sentence

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

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

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

CLARUS CORPORATION

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Weighted average shares outstanding - basic

1 unchanged sentence

Weighted average shares outstanding - diluted

Loss from continuing operations per share:

Income from discontinued operations per share:

Net (loss) income per share:

For the three months ended September 30, 2025 and 2024, equity awards of 4,685 and 5,762 , respectively, and for the nine months ended September 30, 2025 and 2024, equity awards of 4,531 and 5,217 , respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive.

Net loss per share:

For the three months ended March 31, 2026 and 2025, equity awards of 4,533 and 4,265 , respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive.

STOCK-BASED COMPENSATION PLAN

7 unchanged sentences

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.

During the three months ended March 31, 2026, the Company did no t issue any stock options or restricted stock unit awards under the Amended and Restated 2015 Plan to directors and employees of the Company.

The total non-cash stock compensation expense related to grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted stock unit awards recorded by the Company for the three months ended March 31, 2026 and 2025 was $ 1,154 and $ 1,469 , respectively.

For the three months ended March 31, 2026 and 2025, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.

As of March 31, 2026, there were 50 unvested stock options and unrecognized compensation cost of $ 56 related to unvested stock options, as well as 1,000 unvested restricted stock unit awards and unrecognized compensation costs of $ 250 related to unvested restricted stock unit awards.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Options Granted:

During the nine months ended September 30, 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 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:

Options Granted During the Nine Months Ended September 30, 2025

Number of options

Option vesting period

Grant price (per share)

$ 3.21 - $ 4.02

Dividend yield

2.49 % - 3.12 %

Expected volatility (a)

50.6 % - 53.2 %

Risk-free interest rate

4.01 % - 4.17 %

Expected life (years) (b)

Weighted average fair value (per share)

$ 1.32 - $ 1.74

(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.

The grant date fair value of the stock options granted during the nine months ended September 30, 2025 was $ 1,046 , which will be recognized over the vesting period of the options.

During the nine months ended September 30, 2025, the Company did no t issue any restricted stock unit awards under the Amended and Restated 2015 Plan and the 2015 Plan to directors and employees of the Company.

The total non-cash stock compensation expense for continuing operations related to grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted stock unit awards recorded by the Company for the three months ended September 30, 2025 and 2024 was $ 1,544 and $ 1,547 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 4,568 and $ 4,253 , respectively.

For the three and nine months ended September 30, 2025 and 2024, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.

As of September 30, 2025, there were 1,053 unvested stock options and unrecognized compensation cost of $ 1,180 related to unvested stock options, as well as 1,050 unvested restricted stock unit awards and unrecognized compensation costs of $ 1,639 related to unvested restricted stock unit awards.

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 three months

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

ended September 30, 2025 and 2024, the Company incurred $ 155 and $ 478 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred $ 489 and $ 1,009 , respectively, of restructuring charges related to these actions.

During the three months ended March 31, 2026 and 2025, the Company incurred $ 853 and $ 173 , respectively, of restructuring charges related to these actions.

The Company has incurred $ 6,991 of cumulative restructuring charges since the commencement of our restructuring actions in 2023.

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

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

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

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

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

We estimate that we will continue to incur restructuring costs related to employee-related costs and facility exit costs during the year ending December 31, 2025;

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

The Company anticipates completing these restructuring activities in the year ending December 31, 2025.

The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at September 30, 2025, which are included within accrued liabilities in the condensed consolidated balance sheets:

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.

The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at March 31, 2026, which are included within accrued liabilities in the condensed consolidated balance sheets:

Balance at December 31, 2025

4 unchanged sentences

Cash payments

Balance at September 30, 2025

Balance at March 31, 2026

COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

7 unchanged sentences

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 Part II, Item 1.

“Legal Proceedings.”

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive (loss) income except as described below.

stock price, consolidated financial position, results of operations and/or cash flows.

See Part II, Item 1.

“Legal Proceedings.”

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.

Consumer Product Safety Commission

In January 2021, Black Diamond Equipment, Ltd.

(“BDEL”) wrote to the U.S.

(“BDEL”) filed a Section 15(b) report with the U.S.

Consumer Product Safety Commission (“CPSC”) outlining its new cradle solution for certain models of its avalanche beacon transceivers to prevent such transceivers from switching unexpectedly out of “send” mode.

10 unchanged sentences

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 in the October 12, 2023 and December 18, 2023 letters, including the amount of any potential penalties.

On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions, including the amount of any potential penalties.

The CPSC ultimately disagreed with our position and the agency voted to refer the matter to the U.S.

5 unchanged sentences

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

Walbrecht and pay his legal fees 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.

Walbrecht and pay his legal fees in connection with the occurrences described above, and he has provided an

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

On January 23, 2025, 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 this investigation.

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, as well as grand jury subpoenas for documents to an advisory entity and to the Company’s former public relations firm and asked to speak with the successor to Mr.

Vance’s position.

The Company’s Board of Directors has approved indemnity and payment of legal fees for current and former employees subpoenaed by the DOJ, in the same manner and subject to the same conditions described above for Mr.

On March 13, 2025, the Company received a letter from the CPSC requesting various categories of documents and information in connection with an investigation into whether BDEL sold products that were subject to a recall.

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

The Company has heard nothing further from the CPSC regarding the matters in the CPSC’s March 13, 2025 letter.

On January 28, 2026, the CPSC closed its investigation into this specific matter 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.

2 unchanged sentences

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) income.

therefore the low-end of the range was recorded as an accrued liability during the first quarter of 2024 and a corresponding expense was 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.

1 unchanged sentence

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 three months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 322 and $ 194 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 2,050 and $ 579 , 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) income.

During the three months ended March 31, 2026 and 2025, the Company incurred legal expenses of $ 802 and $ 578 , 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.

3 unchanged sentences

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 filed its opening brief on July 18, 2025.

Clarus Corporation v.

Caption Management, LLC, et al.

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

Defendants filed a motion to dismiss and on March 24, 2025, the Court issued an Order and Opinion denying the motion to dismiss and directing the defendants to answer the Complaint and proceed to discovery.

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.

The Court of Appeals has invited the Securities and Exchange Commission (“SEC”)

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

During the three months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 679 and $ 200 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 1,413 and $ 716 , 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) income.

to submit an amicus curiae brief, but the SEC declined to do so.

We are currently waiting for the Court of Appeals to issue its decision.

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.

On April 11, 2026, the stockholder’s attorney whose case was dismissed filed a lawsuit against the Company in the New York State Supreme Court seeking legal fees for his role in bringing an action against Caption.

The Company intends to defend that action and argue that any fees he may recover are limited to services performed prior to the Company’s direct action against Caption.

During the three months ended March 31, 2026 and 2025, the Company incurred legal expenses of $ 577 and $ 47 , 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.

The Company’s U.S.

federal statutory tax rate is 21 % and its foreign operations have statutory tax rates of approximately 23 % in Austria, 28 % in New Zealand, and 30 % in Australia.

The difference between the Company’s estimated effective tax rate benefit of 58.1 % for the three months ended September 30, 2025, and the U.S.

federal statutory tax rate of 21 % was primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits in the third quarter of 2025.

The difference between the Company’s estimated effective tax rate benefit of 20.2 % for the nine months ended September 30, 2025, and the U.S.

The difference between the Company’s estimated effective tax rate of - 7.3 % for the three months ended March 31, 2026, and the U.S.

federal statutory tax rate of 21 % was primarily due to the impact of jurisdictional losses in the U.S.

and Australia that presently do not provide future tax benefit.

As of December 31, 2025, the Company’s gross deferred tax asset was $ 40,300 .

The Company has recorded a valuation allowance of $ 29,315 , resulting in a net deferred tax asset of $ 10,985 , before deferred tax liabilities of $ 12,348 .

As of September 30, 2025 and December 31, 2024, the Company has provided a full valuation allowance against all of the U.S.

As of March 31, 2026 and December 31, 2025, the Company has provided a full valuation allowance against all of the U.S.

deferred tax assets because the ultimate realization of those assets did not meet the more-likely-than-not criteria.

2 unchanged sentences

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 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

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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.

2 unchanged sentences

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

On July 4, 2025, H.R.1 (the “Tax Reform Act of 2025”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions.

The legislation did not have a material impact on our income tax expense or our financial position, results of operations, or cash flows for the three months ended September 30, 2025, and we do not expect it to materially change our effective income tax rate for 2025.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

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.

SEGMENT INFORMATION

16 unchanged sentences

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

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

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

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

4 unchanged sentences

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:

Three Months Ended September 30, 2025

Domestic sales

International sales

Cost of goods sold

Selling, general and administrative

Restructuring charges

Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Segment operating income (loss)

Corporate costs

Interest income, net

Loss before income tax

Three Months Ended September 30, 2024

Three Months Ended March 31, 2026

Domestic sales

1 unchanged sentence

Cost of goods sold

PFAS and other inventory reserves

Selling, general and administrative

1 unchanged sentence

Legal costs and regulatory matter expenses

Segment operating income (loss)

Segment operating loss

Corporate costs

1 unchanged sentence

Loss before income tax

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2025

Domestic sales

2 unchanged sentences

Inventory fair value of purchase accounting

Other inventory reserves

Selling, general and administrative

1 unchanged sentence

Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Impairment of indefinite-lived intangible assets

Segment operating loss

Corporate costs

Interest income, net

Loss before income tax

Nine Months Ended September 30, 2024

Domestic sales

International sales

Cost of goods sold

PFAS and other inventory reserves

Selling, general and administrative

Restructuring charges

Contingent consideration benefit

Legal costs and regulatory matter expenses

Segment operating loss

Segment operating income (loss)

Corporate costs

5 unchanged sentences

(in thousands, except per share amounts)

Total assets by segment, as of September 30, 2025 and December 31, 2024, were as follows:

September 30, 2025

Total assets by segment, as of March 31, 2026 and December 31, 2025, were as follows:

March 31, 2026

December 31, 2025

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Capital expenditures:

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements