Risk Factors Update Summary

• The Company expects the total amount of unrecognized benefits to increase by approximately $1 million in the next twelve months.
• Elevated interest rates for prolonged periods could increase borrowing costs on variable rate debt. This change might result in higher interest expenses impacting financial results.
• The Company recognized a $2.4 million write-off to reduce inventory amounts to net realizable value. This change might result in improved financial accuracy.
• The new Clawback Policy requires repayment of Erroneously Awarded Compensation due to accounting restatements. This could significantly impact executive compensation structures.
• The company prohibits short sales of its securities, signaling a lack of confidence in performance.
• The company recognized non-cash impairment charges of $9.8 million related to property and equipment. This change might result in reduced asset valuations.
• Significant increases in inflation, particularly related to wages and raw materials, could adversely affect financial results. This change might lead to increased costs of production.
• The Company has state net operating loss carryforwards of $23 million, with $1.4 million expiring in varying years. This change might impact future tax liabilities.
• Transactions in options are banned to prevent insider trading and focus on long-term objectives.
• As of June 30, 2024, there were 848,175 shares available for issuance under the 2015 Plan.
• Cash and cash equivalents totaled $7.4 million as of June 30, 2024, a decrease of $12.4 million from $19.8 million in 2023.
• The Clawback Period is defined as the three completed fiscal years preceding the Restatement Date. This change may enhance accountability for executive compensation.
• The Company recorded total impairment charges of $9.8 million related to the Aviara reporting unit's property, plant, and equipment. This change indicates significant asset valuation concerns.
• A cooling-off period of 90 days is required for insiders after adopting a Trading Plan.
• The Company recorded a repurchase liability of $1.7 million and $1.6 million as of June 30, 2024 and 2023, respectively.
• The Policy mandates that recovery actions must be taken promptly after Erroneously Awarded Compensation is identified. This could lead to quicker financial adjustments for the company.
• The SEC's climate disclosure rule requires reporting of Scope 1 and Scope 2 emissions starting fiscal 2027, impacting future disclosures significantly.
• The introduction of the Balise brand in April 2024 aims to meet consumer demands. This strategic decision could enhance market competitiveness and sales potential.
• The Aviara Transaction is expected to close in the first quarter of fiscal 2025, impacting operations.
• The Company expects to recognize $2.5 million of contract liabilities during the year ending June 30, 2025. This change reflects anticipated revenue recognition from customer deposits.
• The company expects to complete an amendment to its Credit Agreement in Q1 fiscal 2025, affecting financial flexibility and liquidity.
• All officers must emphasize confidentiality when communicating material, non-public information to employees.
• The Aviara Transaction, expected to close in Q1 fiscal 2025, involves transferring brand rights and assets. This change may materially affect business operations and financial condition.
• The company reported a net income of $7.8 million for fiscal 2024, down from $68.9 million in 2023, indicating potential profitability concerns.
• The Chief Financial Officer should be consulted regarding reporting obligations and short-swing profits under Section 16.
• The Company intends to classify Aviara as discontinued operations beginning in the first quarter of fiscal 2025.
• Weakening demand for marine products could hurt dealer sales, impacting overall financial performance. This change highlights risks associated with retail demand fluctuations.
• The Company’s top ten dealers accounted for approximately 40% of net sales, with one dealer at $98.6 million. This change highlights dependency on key customers.
• The Company recognized a $1.1 million goodwill impairment charge within the Aviara segment. This change suggests potential challenges in segment performance.
• The Company’s cash payments for income taxes increased to $11,611 from $10,053, indicating a rising tax burden. This change may affect cash flow management.