Clarus Corp

NOTE 1. 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, 2026 and December 31, 2025 and for the three and nine months ended September 30, 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 as 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, 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.

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.

Sale of PIEPS

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.

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 income (loss), and therefore results were not classified as discontinued operations.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. We continually evaluate our estimates and assumptions including those related to revenue recognition, income taxes and valuation of long-lived assets, goodwill and indefinite-lived intangible assets, and other intangible assets. We base our estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Restricted Cash

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 September 30, 2026 and December 31, 2025.

Changes in Laws and Regulations

In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs thereunder. In April 2026, U.S. Customs and Border Protection announced a new administrative process for importers to obtain refunds of certain tariffs imposed under IEEPA.

The Company has submitted eligible refund claims through the established refund process. In the three and nine months ended September 30, 2026, we recognized pre-tax benefits from tariff refunds received of $69 and $6,211, respectively, related to tariffs incurred in 2025 and 2026 at the Outdoor segment, and $495 in both the three and nine months ended September 30, 2026 related to tariffs incurred in 2025 and 2026 at the Adventure segment, all of which are recorded within Cost of goods sold in the condensed consolidated statements of comprehensive income (loss).

Recent Accounting Pronouncements

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.

NOTE 2. ACQUISITIONS

ONWRD

On June 18, 2026, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, entered into an Asset Purchase Agreement (the “ONWRD Purchase Agreement”) with ONWRD LLC (“ONWRD”) and Jared Peterson, Skyler Pinnick, and Ryan Price, pursuant to which the Company acquired certain assets of ONWRD (the “ONWRD Acquisition”),

including inventory, intellectual property, software, domain names and social media accounts. The Company assumed specified liabilities relating to the acquired assets, including obligations arising under certain assigned contracts from and after the closing of the ONWRD Acquisition on June 18, 2026.

Pursuant to the ONWRD Purchase Agreement, the purchase price paid and payable in connection with the ONWRD Acquisition includes (i) $375 paid in cash at closing, subject to adjustment as set forth in the ONWRD Purchase Agreement and (ii) additional contingent payments based on the achievement of specified net sales thresholds and royalty payments based on net sales of certain products (the “ONWRD Contingent Consideration”). The Company estimated the initial fair value of the ONWRD Contingent Consideration to be $499 and recorded the related liabilities within accrued liabilities and other long-term liabilities. See Note 9 for discussion regarding the valuation of the ONWRD Contingent Consideration as of September 30, 2026. The ONWRD Acquisition was accounted for as a business combination.

The following table summarizes the preliminary acquisition-date fair value of the consideration transferred in the ONWRD Acquisition and its allocation to the assets acquired and liabilities assumed, each of which has been estimated at fair value. The fair value estimates for the purchase price allocation for ONWRD 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 related to the ONWRD Acquisition are subject to change and the final purchase price allocation 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 ONWRD Acquisition. There wasno excess of consideration transferred over the assets acquired and liabilities assumed andno goodwill was recorded as a result of the ONWRD Acquisition.

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 ONWRD Acquisition, the Company acquired exclusive rights to all of ONWRD’s intangible assets. $646 was assigned to the product technologies class of intangible assets, all of which were assigned an average useful life ofthree years.

No pre-existing relationships existed between the Company and ONWRD or the other parties to the ONWRD Purchase Agreement prior to the ONWRD Acquisition. ONWRD revenue and operating income are included in the Adventure segment. Total revenue and net income of ONWRD from the date of the ONWRD Acquisition through September 30, 2026 were not material to the Company’s consolidated financial statements.

NOTE 3. INVENTORIES

Inventories, as of September 30, 2026 and December 31, 2025, were as follows:

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment, net, as of September 30, 2026 and December 31, 2025, were as follows:

Depreciation expense for the three months ended September 30, 2026 and 2025 was $1,079 and $894, respectively, and for the nine months ended September 30, 2026 and 2025 was $3,066 and $2,654, respectively.

NOTE 5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill by segment as of September 30, 2026 and December 31, 2025 was as follows:

Indefinite-Lived Intangible Assets

Trademarks classified as indefinite-lived intangible assets of $19,600 as of September 30, 2026 and December 31, 2025 were all related to the Black Diamond brand.

Other Intangible Assets, net

The following table summarizes the changes in gross other intangible assets:

Other intangible assets, net of amortization as of September 30, 2026 and December 31, 2025, were as follows:

Amortization expense for the three months ended September 30, 2026 and 2025, was $1,740 and $2,149, respectively, and for the nine months ended September 30, 2026 and 2025 was $5,583 and $6,586, respectively. Future amortization expense for other intangible assets as of September 30, 2026 is as follows:

NOTE 6. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES

Accrued liabilities as of September 30, 2026 and December 31, 2025, were as follows:

Other long-term liabilities as of September 30, 2026 and December 31, 2025, were as follows:

The Company entered into a lease agreement for a warehouse and distribution facility located in Utah, which commenced on June 1, 2026 with an initial term of 7.6 years. The Company classified this lease as an operating lease. Upon commencement, the Company recognized an ROU asset of $6,263 and corresponding lease liability of $6,419, measured using a discount rate of 6.65%.

NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS

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. dollar. 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 maintainedno derivative contracts as of September 30, 2026.

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

For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive loss and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains (losses) of $0 and ($641) were reclassified to sales during the three months ended September 30, 2026 and 2025, respectively, and $0 and ($1,068) were reclassified to sales during the nine months ended September 30, 2026 and 2025, respectively.

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

NOTE 8. 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, 2026:

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

The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2026:

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

There wereno unrealized gains on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2026. The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2025, were as follows:

NOTE 9. 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 that 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 September 30, 2026 and December 31, 2025 were as follows:

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

Pursuant to the purchase of ONWRD during the nine months ended September 30, 2026, the purchase price paid and payable in connection with the ONWRD Acquisition includes the payment of additional contingent consideration based on the achievement of specified net sales thresholds and royalty payments based on net sales of certain products of up to $499. The Company estimated the initial fair value of the contingent consideration liabilities using an income approach method. Significant unobservable inputs used in the valuation of contingent consideration liabilities related to the ONWRD Acquisition included a discount rate of 15.0%.

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 income (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.

The following table summarizes the changes in contingent consideration liabilities:

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. As of September 30, 2026, the net sales threshold required for the payment of the 2026 portion of the RockyMounts contingent consideration is not expected to be met during the measurement period ending December 31, 2026.

NOTE 10. 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. On November 4, 2026, the Company announced that its Board of Directors approved the payment on November 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 November 16, 2026.

NOTE 11. 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 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 net loss.

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

For the three months ended September 30, 2026 and 2025, equity awards of 4,398 and 4,685, respectively, and for the nine months ended September 30, 2026 and 2025, equity awards of 4,467 and 4,531, respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive.

NOTE 12. 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, andno further awards will be granted under it. Any remaining shares available for grant under the 2015 Plan were canceled. However,4,232 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 nine months ended September 30, 2026, the Company issued stock option awards for an aggregate of 80 shares of Common Stock under the Amended and Restated 2015 Plan to directors of the Company. The 80 stock options shall vest and become exercisable withinone year from the date of the grant. All of the issued stock options expireten 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, 2026

The grant date fair value of the stock options granted during the nine months ended September 30, 2026 was $101, which will be recognized over the vesting period of the options.

During the nine months ended September 30, 2026, the Company didnot issue any 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 September 30, 2026 and 2025 was $38 and $1,544, respectively, and for the nine months ended September 30, 2026 and 2025 was $1,460 and $4,568, respectively. For the three and nine months ended September 30, 2026 and 2025, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.

As of September 30, 2026, there were 90 unvested stock options and unrecognized compensation cost of $102 related to unvested stock options, as well as 1,000 unvested restricted stock unit awards and unrecognized compensation costs of $0 related to unvested restricted stock unit awards.

NOTE 13. 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 ended September 30, 2026 and 2025, the Company incurred $196 and $155, respectively, and during the nine months ended September 30, 2026 and 2025, the Company incurred $1,189 and $489, respectively, of restructuring charges related to these actions. The Company has incurred $7,327 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. Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the condensed consolidated statements of comprehensive income (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.

The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at September 30, 2026, which are included within accrued liabilities in the condensed consolidated balance sheets:

NOTE 14. COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

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. There is a 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 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 income (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 Product 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” 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 Product 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 letter dated October 12, 2023, the CPSC staff advised BDEL that it will recommend that the CPSC impose civil penalties of $16,025 for allegedly failing to timely report the alleged defect in certain models of avalanche transceivers switching unexpectedly out of “send” mode, and a $110 fine for an alleged material misrepresentation. By letter dated December 18, 2023, the CPSC staff advised BDEL that it will recommend that the CPSC impose a civil penalty of $9,000 for allegedly failing to timely report the alleged defect in certain models of avalanche transceivers switching unexpectedly out of “search” mode due to an electronic malfunction in the reed switch or foil laminate.

On November 20, 2023 and February 8, 2024, respectively, BDEL submitted opposition statements disputing the CPSC staff’s 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. To the extent the civil penalty matters remain pending, the Company and BDEL intend to vigorously defend against any claims which may be asserted against them by the Department of Justice or the CPSC. Any potential loss contingency for BDEL relating to either of these matters is not determinable or reasonably estimable.

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 that the beacons in question contained a defect. 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 advance his legal fees, and he has provided an undertaking to repay those expenses if it is ultimately determined that he was not entitled to indemnification. On August 26, 2024, Mr. Walbrecht’s independent counsel denied the allegations and rejected the proposed 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 cooperated with the investigation and produced all relevant

documents. The DOJ had 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 also had 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. With respect to current and former employees, the Company’s Board of Directors has authorized indemnity to the same extent permitted by the Company’s by-laws for officers and directors, including payment of legal fees for independent counsel.

On June 4, 2026, the Company received a letter from the DOJ advising that based on information presently known to the government and the principles of federal prosecution, the DOJ has closed this investigation as to the Company and BDEL. On the same date, Messrs. Walbrecht and Vance received similar letters from the DOJ advising each of them that the DOJ had closed the investigation as to them. By letters dated November 3, 2026, the CPSC advised the Company that it was removing a number of recalls from active monitoring status. The Company will continue to implement any Corrective Action Plan in place for recalled products and maintain toll-free numbers for consumers to call for information.

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 concluded this investigation without finding any wrongdoing on the part of the Company.

During the three months ended September 30, 2026 and 2025, the Company incurred legal (benefits) expenses of ($20) and $322, respectively, and during the nine months ended September 30, 2026 and 2025, the Company incurred legal expenses of $1,886 and $2,050, respectively, in connection with the above investigation. During the nine months ended September 30, 2026, the Company reversed its previously accrued liability of $2,500 for the CPSC regulatory matter. These legal expenses and the reversal are included in legal and regulatory matter costs in the consolidated statements of comprehensive income (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. The Court of Appeals has invited the Securities and Exchange Commission (“SEC”) 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.

During the three months ended September 30, 2026 and 2025, the Company incurred legal expenses of $83 and $679, respectively, and during the nine months ended September 30, 2026 and 2025, the Company incurred legal expenses of $757 and $1,413, respectively, in connection with the various legal proceedings. These legal expenses are included in legal and regulatory matter costs in the consolidated statements of comprehensive income (loss).

NOTE 15. INCOME TAXES

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 of 11.5% for the three months ended September 30, 2026, and the U.S. federal statutory tax rate of 21% was primarily due to the Company’s U.S. pre-tax income, which includes the discrete tariff refunds, being offset by a corresponding change in the U.S. valuation allowance and R&D credits. These differences are partially offset by Australian losses that receiveno tax benefit due to a full valuation allowance, and by income in foreign jurisdictions with statutory rates above 21%.

The difference between the Company’s estimated effective tax rate of 12.5% for the nine months ended September 30, 2026, and the U.S. federal statutory tax rate of 21% was primarily due to the Company’s U.S. pre-tax income, which includes the discrete tariff refunds, being offset by a corresponding change in the U.S. valuation allowance and R&D credits. These differences are partially offset by Australian losses that receiveno tax benefit due to a full valuation allowance, and by income in foreign jurisdictions with statutory rates above 21%.

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, 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. Part of the Company’s deferred tax assets consist of net operating loss carryforwards (“NOLs”) for federal tax purposes. If a change in control were to occur, these could be limited under Section 382 of the Internal Revenue Code of 1986 (“Code”), as amended.

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 interim reporting period.

As of December 31, 2025, the Company had 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.

NOTE 16. SEGMENT INFORMATION

We operate our business structure withintwo 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:

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:

There were no intersegment sales between the Outdoor and Adventure segments for the three and nine month periods presented. The selling, general, and administrative costs for the three and nine months ended September 30, 2026 include $150 and $450, respectively, of expense paid to Corporate for the lease of the Salt Lake City headquarters. Corporate costs are reduced by the same amount in the respective periods.

Total assets by segment, as of September 30, 2026 and December 31, 2025, were as follows:

Capital expenditures, depreciation and amortization by segment is as follows.