Unassociated Document

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PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets - June 30, 2009 (unaudited) and December 31, 2008	1

	Condensed Consolidated Statements of Operations (unaudited) - Three and six months ended June 30, 2009 and 2008	2

	Condensed Consolidated Statements of Cash Flows (unaudited) - Six months ended June 30, 2009 and 2008	3

	Notes to Unaudited Condensed Consolidated Financial Statements - June 30, 2009	4

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	13

Item 4.	Procedures and Controls	13

PART II	OTHER INFORMATION

Item 1A.	Risk Factors	14

Item 4.	Submission of Matters to a Vote of the Security Holders	14

Item 5.	Other Matters	15

Item 6.	Exhibits	15

SIGNATURES		15

EXHIBIT INDEX		16

	JUNE 30,			DECEMBER 31,
	2009			2008
	(unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	65,676		$	19,342
Marketable securities		18,614			66,670
Interest receivable		23			24
Prepaids and other current assets		179			109
Total current assets		84,492			86,145

PROPERTY AND EQUIPMENT, NET		860			1,032
TOTAL ASSETS	$	85,352		$	87,177

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	125		$	383
Total current liabilities		125			383

LONG-TERM LIABILITIES:
Deferred rent		421			410

Total liabilities		546			793

STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value; 5,000,000 shares authorized; none issued		—			—
Common stock, $.0001 par value; 100,000,000 shares authorized; 17,441,747 shares issued and 17,366,747 outstanding in 2009 and 2008, respectively		2			2
Additional paid-in capital		370,847			370,504
Accumulated deficit		(286,045	)		(284,523	)
Treasury stock, at cost		(2	)		(2	)
Accumulated other comprehensive income		4			403
Total stockholders' equity		84,806			86,384

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	85,352		$	87,177

	THREE MONTHS						SIX MONTHS
	ENDED JUNE 30,						ENDED JUNE 30,
	2009			2008			2009			2008
REVENUES:	$	—		$	—		$	—		$	—
Total revenues		—			—			—			—

OPERATING EXPENSES:
General and administrative		1,030			1,253			1,953			2,403
Depreciation		88			89			177			178
Total operating expenses		1,118			1,342			2,130			2,581

OPERATING LOSS		(1,118	)		(1,342	)		(2,130	)		(2,581	)
INTEREST INCOME		197			559			608			1,381
NET LOSS	$	(921	)	$	(783	)	$	(1,522	)	$	(1,200	)

Loss per common share:
Basic	$	(0.05	)	$	(0.05	)	$	(0.09	)	$	(0.07	)
Diluted	$	(0.05	)	$	(0.05	)	$	(0.09	)	$	(0.07	)

Weighted average shares outstanding:
Basic		16,867			16,867			16,867			16,867
Diluted		16,867			16,867			16,867			16,867

	SIX MONTHS
	ENDED JUNE 30,
	2009			2008
OPERATING ACTIVITIES:
Net loss	$	(1,522	)	$	(1,200	)
Adjustments to reconcile net loss to net cash used in Operating activities:
Depreciation on property and equipment		177			178
Amortization of equity compensation plans		343			397
Amortization of discount on securities, net		(436	)		(976	)
Loss on disposal of equipment		1			—
Changes in operating assets and liabilities:
Increase in interest receivable, prepaids and other current assets		(69	)		(6	)
Decrease in accounts payable and accrued liabilities		(258	)		(190	)
Increase in deferred rent		11			34
NET CASH USED IN OPERATING ACTIVITIES		(1,753	)		(1,763	)

INVESTING ACTIVITIES:
Purchases of marketable securities		(18,605	)		(76,293	)
Proceeds from maturity of marketable securities		66,698			53,100
Purchase of property and equipment		(6	)		(1	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		48,087			(23,194	)

FINANCING ACTIVITIES:

Proceeds from the exercises of stock options		—			—
NET CASH PROVIDED BY FINANCING ACTIVITIES		—			—
CHANGE IN CASH AND CASH EQUIVALENTS		46,334			(24,957	)

CASH AND CASH EQUIVALENTS, Beginning of Period		19,342			41,886
CASH AND CASH EQUIVALENTS, End of Period	$	65,676		$	16,929

SUPPLEMENTAL DISCLOSURE:

Cash paid for franchise and property taxes	$	220		$	327

The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and subsidiaries ("Clarus" or the "Company," which may be referred to as "we," "us," or "our") as of and for the three and six months ended June 30, 2009 and 2008, have been prepared in accordance with accounting principles generally accepted in the United States of America and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information in notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. The results of the three and six months ended June 30, 2009 are not necessarily indicative of the results to be obtained for the year ending December 31, 2009. The Company has evaluated subsequent events through the filing date. 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 Form 10-K for the fiscal year ended December 31, 2008, filed with the Securities and Exchange Commission.

As part of our previously announced strategy to limit operating losses and enable the Company to redeploy its assets and use its substantial cash, cash equivalent assets and marketable securities to enhance stockholder value, on December 6, 2002, we sold substantially all of our electronic commerce business, which represented substantially all of our revenue-generating operations and related assets. During January 2003, we sold the assets relating to our Cashbook product representing the remainder of our operating assets.

We are currently working to identify suitable merger partners or acquisition opportunities. Although we are not targeting specific business industries for potential acquisitions, we plan to seek businesses with substantial cash flow, experienced management teams, and operations in markets offering substantial growth opportunities.

Basic net (loss) per share attributable to common stockholders is computed by dividing the net (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for each period. Diluted net (loss) per share attributable to common stockholders is computed by including the effect of all potentially dilutive securities, including options, warrants, restricted stock and redeemable convertible preferred stock. Potentially dilutive securities are excluded from the computation of diluted net (loss) per share attributable to common stockholders if their effect is anti-dilutive.

For the three and six months ended June 30, 2009, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders because all potentially dilutive securities were anti-dilutive in computing diluted net loss per share for the period. Options to acquire 1,845,000 shares of common stock and 500,000 shares of restricted stock during the three and six months ended June 30, 2009 were outstanding, but not included in the calculation of weighted average number of diluted shares outstanding because the option and stock grant prices were higher than the average market price of the Company's common stock during the period. In addition, diluted net loss per share attributable to common stockholders excludes the potentially dilutive effect of options to purchase 123,750 shares of the Company's common stock whose exercise prices were lower than the average market price of the Company's common stock during the three and six months ended June 30, 2009, as their inclusion would have been anti-dilutive because the Company incurred losses during the periods.

For the three and six months ended June 30, 2008, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders because all potentially dilutive securities were anti-dilutive in computing diluted net loss per share for the period. Options to acquire 965,000 shares of common stock during the three and six months ended June 30, 2008, were outstanding, but not included in the calculation of weighted average number of diluted shares outstanding because the option exercise prices were higher than the average market price of the Company's common stock during the period. In addition, diluted net loss per share attributable to common stockholders excludes the potentially dilutive effect of options to purchase 883,750 shares of the Company's common stock and 500,000 shares of restricted stock whose option and stock grant prices were lower than the average market price of the Company's common stock during the three and six months ended June 30, 2008, as their inclusion would have been anti-dilutive because the Company incurred losses during the periods.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Basic earnings per share calculation:
Net loss	$	(921	)	$	(783	)	$	(1,522	)	$	(1,200	)
Weighted average common shares – basic		16,867			16,867			16,867			16,867
Basic net loss per share	$	(0.05	)	$	(0.05	)	$	(0.09	)	$	(0.07	)

Diluted earnings per share calculation:
Net loss	$	(921	)	$	(783	)	$	(1,522	)	$	(1,200	)
Weighted average common shares – basic		16,867			16,867			16,867			16,867
Effect of dilutive stock options		—			—			—			—

Effect of dilutive restricted stock		—			—			—			—
Weighted average common shares diluted		16,867			16,867			16,867			16,867
Diluted net loss per share	$	(0.05	)	$	(0.05	)	$	(0.09	)	$	(0.07	)

The Company adopted the 2005 Stock Incentive Plan (the "2005 Plan"), which was approved by stockholders at the Company’s annual meeting in June 2005. Under the 2005 Plan, the Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees of the Company or its subsidiaries, directors, officers or consultants to the Company. The 2005 Plan provides for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. As of June 30, 2009, the number of shares authorized and reserved for issuance under the 2005 Plan is 4.8 million, subject to an automatic annual increase equal to 4% of the total number of shares of Clarus’ common stock outstanding. The aggregate number of shares of common stock that may be granted through awards under the 2005 Plan to any employee in any calendar year may not exceed 500,000 shares. The 2005 Plan will continue in effect until June 2015 unless terminated sooner. As of June 30, 2009, 748,750 stock options have been awarded under the plan of which 255,000 are unvested and 493,750 are vested and eligible for exercise.

On May 28, and June 18, 2009, the Company issued 63,750 and 60,000 stock options, respectively, under the Company’s 2005 Plan, to directors of the Company. The options issued on May 28 were fully vested on the date of grant and the vesting period for the options granted June 18, 2009 is quarterly beginning June 30, 2009 over one year. 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:

The fair value of unvested options is determined based on the closing market price of our shares on the grant date and is recognized over the requisite service period of one to six years. As of June 30, 2009, there were 255,000 unvested shares and unrecognized compensation cost of $538,000 related to unvested stock options.

The Company utilizes SFAS No. 130 "Reporting Comprehensive Income." SFAS No. 130 establishes standards for reporting and presentation of comprehensive loss and its components of net loss and "Other Comprehensive Loss." "Other Comprehensive Loss" refers to revenues, expenses and gains and losses that are not included in net loss but rather are recorded directly in stockholders' equity. The components of comprehensive loss for the three and six months ended June 30, 2009 and 2008 were as follows:

In May 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, SFAS 165 provides: the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The company adopted SFAS 165 effective for the quarter ended June 30, 2009. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

In April of 2009, the FASB issued FASB Staff Position FAS 115-2 and FAS 124-2: Recognition and Presentation of Other-Than-Temporary Impairments. FSP FAS 115-2 and FAS 124-2 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The company adopted FSP FAS 115-2 and FAS 124-2 effective for the quarter ended June 30, 2009. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”) and requires enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, and how derivative instruments and related hedge items affect an entity’s financial position, financial performance, and cash flows. SFAS 161 also requires the disclosure of the fair values of derivative instruments and their gains and losses in a tabular format and requires cross-referencing within the footnote of important information about derivative instruments. SFAS 161 is effective for financial statements issued for fiscal years beginning on or after November 15, 2008. SFAS 161 has not changed the Company’s current practices and therefore it has not impacted preparation of the consolidated financial statements.

In December 2007, the FASB released SFAS No. 141(R), Business Combinations (revised 2007) (“SFAS 141(R)”), which changes many well-established business combination accounting practices and significantly affects how acquisition transactions are reflected in the financial statements. SFAS 141(R) must be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of this pronouncement had no impact on the Company’s consolidated financial statements and is not anticipated to affect the Company until an acquisition is completed.

In December 2007, the FASB released SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51 (“SFAS 160”), which establishes accounting and reporting standards for the noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interests and requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. Previously, net income attributable to the noncontrolling interest was reported as an expense or other deduction in arriving at consolidated net income. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this pronouncement had no impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which establishes a framework for reporting fair value and expands disclosures about fair value measurements. SFAS No. 157 (“SFAS 157”) was effective for the Company on January 1, 2008, with the exception that the applicability of SFAS No. 157’s fair value measurement requirements to nonfinancial assets and liabilities that are not required or permitted to be recognized or disclosed at fair value on a recurring basis has been delayed by the FASB for one year. The partial adoption of this pronouncement in 2008 had no impact on the Company’s consolidated financial statements. Adopting the remainder of the provision in 2009 did not have an impact on the Company’s consolidated financial statements.

In September 2003, the Company and Kanders & Company, Inc. (“Kanders & Company”) an entity owned and controlled by the Company's Executive Chairman, Warren B. Kanders, entered into a 15-year lease with a five-year renewal option, as co-tenants to lease approximately 11,500 square feet in Stamford, Connecticut. The Company and Kanders & Company have agreed to allocate the total lease payments of $38,958 per month on the basis of Kanders & Company renting 2,900 square feet for $9,739 per month, and the Company renting 8,600 square feet for $29,222 per month, which are subject to increases during the term of the lease. Rent expense is recognized on a straight line basis. The lease provides the co-tenants with an option to terminate the lease in years eight and ten in consideration for a termination payment. The Company and Kanders & Company agreed to pay for their proportionate share of the build-out construction costs, fixtures, equipment and furnishings related to preparation of the space. In connection with the lease, the Company obtained a stand-by letter of credit in the amount of $850,000 to secure lease obligations for the Stamford facility. Kanders & Company reimburses the Company for a pro rata portion of the approximately $5,000 annual cost of the letter of credit.

The Company provides certain telecommunication, administrative and other office services as well as accounting and bookkeeping services to Kanders & Company that are reimbursed by Kanders & Company. Such services aggregated $45,400 during the three months ended June 30, 2009 and $37,700 during the three months ended June 30, 2008. For the six month periods ended June 30, 2009 and 2008, respectively, such services aggregated $102,900 and $75,700, respectively.

As of June 30, 2009, the Company had a net receivable of $26,600 from Kanders & Company. The amount due to and from Kanders & Company is included in prepaids and other current assets and accounts payable and accrued liabilities in the accompanying consolidated balance sheet. The outstanding amount was paid and received in July 2009. As of June 30, 2008, the Company had an outstanding net payable of $5,000 to Kanders & Company. The outstanding amount was paid and received in July 2008.

The Company provides certain telecommunication, administrative and other office services to Stamford Industrial Group, Inc., formerly known as Net Perceptions, Inc. (“SIG”) that are reimbursed by SIG. Warren B. Kanders, our Executive Chairman, also serves as the Non-Executive Chairman of SIG. Such services aggregated $7,400 during the three months ended June 30, 2009 and $10,600 during the three months ended June 30, 2008. For the six month period ended June 30, 2009 and 2008, respectively, such services aggregated $18,700 and $18,600, respectively.

As of June 30, 2009, the Company had outstanding a receivable of $7,400 due from SIG. The amount due from SIG is included in prepaids and other current assets in the accompanying consolidated balance sheet. The outstanding amount was paid in the third quarter of 2009. As of June 30, 2008, the Company had outstanding a receivable of $10,600 from SIG. The outstanding amount was paid by SIG in the third quarter of 2008.

During the three- and six-month periods ended June 30, 2009 and 2008, the Company incurred no charges to Kanders Aviation LLC, an affiliate of the Company’s Executive Chairman, Warren B. Kanders, relating to aircraft travel by directors and officers of the Company for potential redeployment transactions, pursuant to the Transportation Services Agreement, dated December 18, 2003 between the Company and Kanders Aviation LLC.

The Board of Directors has a general practice of requiring directors interested in a transaction not to participate in deliberations or to vote upon transactions in which they have an interest, and to be sure that transactions with directors, executive officers and major shareholders are on terms that align the interests of the parties to such agreements with the interests of the stockholders.

At June 30, 2009, the Company has net operating loss, research and experimentation credit and alternative minimum tax credit carryforwards for U.S. federal income tax purposes of approximately $230.8 million, $1.3 million and $56,000, respectively, which expire in varying amounts beginning in the year 2009. The Company's ability to benefit from certain net operating loss and tax credit carryforwards is limited under Section 382 of the Internal Revenue Code due to a prior ownership change of greater than 50%. Accordingly, approximately $226.8 million of the $230.8 million of U.S. net operating loss carryforward is currently available to offset taxable income that the Company may recognize in the future. Of the approximately $226.8 million of net operating losses available to offset taxable income, approximately $208.8 million does not expire until 2020 or later, subject to compliance with Section 382 of the Internal Revenue Code as indicated by the following schedule:

This report contains certain forward-looking statements, including information about or related to our future results, certain projections and business trends. Assumptions relating to forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. When used in this report, the words "estimate," "project," "intend," "believe," "expect" and similar expressions are intended to identify forward-looking statements. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any or all of the assumptions could prove inaccurate, and we may not realize the results contemplated by the forward-looking statements. Management decisions are subjective in many respects and susceptible to interpretations and periodic revisions based upon actual experience and business developments, the impact of which may cause us to alter our business strategy or capital expenditure plans that may, in turn, affect our results of operations. In light of the significant uncertainties inherent in the forward-looking information included in this report, you should not regard the inclusion of such information as our representation that we will achieve any strategy, objectives or other plans. The forward-looking statements contained in this report speak only as of the date of this report, and we have no obligation to update publicly or revise any of these forward-looking statements.

These and other statements, which are not historical facts, are based largely upon our current expectations and assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements. These risks and uncertainties include, among others, our planned effort to redeploy our assets and use our substantial cash, cash equivalents and marketable securities to enhance stockholder value following the sale of substantially all of our electronic commerce business, which represented substantially all of our revenue generating operations and related assets, and the risks and uncertainties as set forth in "Risk Factors" found in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and described below.

We cannot assure you that we will be successful in our efforts to redeploy our assets or that any such redeployment will result in Clarus’ future profitability. Our failure to redeploy our assets could have a material adverse effect on the market price of our common stock and our business, financial condition and results of operations.

AS PART OF OUR PREVIOUSLY ANNOUNCED STRATEGY TO LIMIT OPERATING LOSSES AND ENABLE THE COMPANY TO REDEPLOY ITS ASSETS AND USE ITS SUBSTANTIAL CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES TO ENHANCE STOCKHOLDER VALUE, ON DECEMBER 6, 2002, WE SOLD SUBSTANTIALLY ALL OF OUR ELECTRONIC COMMERCE BUSINESS, WHICH REPRESENTED SUBSTANTIALLY ALL OF OUR REVENUE GENERATING OPERATIONS AND RELATED ASSETS. RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND ANY FUTURE PERIODS PRIOR TO A REDEPLOYMENT OF OUR ASSETS ARE EXPECTED PRIMARILY TO REFLECT GENERAL AND ADMINISTRATIVE EXPENSES AND TRANSACTION EXPENSES ASSOCIATED WITH THE CONTINUING ADMINISTRATION OF THE COMPANY AND ITS EFFORTS TO REDEPLOY ITS ASSETS.

The Company's discussion of financial condition and results of operations is based on the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting periods. The Company continually evaluates its estimates and assumptions including those related to revenue recognition, allowance for doubtful accounts, impairment of long-lived assets, impairment of investments, and contingencies and litigation. The Company bases its estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

The Company believes the following critical accounting policies include the more significant estimates and assumptions used by management in the preparation of its consolidated financial statements. Our accounting policies are more fully described in Note 1 of our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

- The Company accounts for its marketable securities under the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (“SFAS 115”). Pursuant to the provisions of SFAS 115, the Company has classified its marketable securities as available-for-sale. Available-for-sale securities have been recorded at fair value and related unrealized gains and losses have been excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) until realized.

- The Company accounts for income taxes pursuant to Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under the asset and liability method specified thereunder, deferred taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities. Deferred tax liabilities are offset by deferred tax assets relating to net operating loss carryforwards, tax credit carryforwards and deductible temporary differences. Recognition of deferred tax assets is based on management’s belief that it is more likely than not that the tax benefit associated with temporary differences and operating and capital loss carryforwards will be utilized. A valuation allowance is recorded for those deferred tax assets for which it is more likely than not that the realization will not occur.

- On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payments” (“SFAS 123R”), requiring recognition of expense related to the fair value of stock option awards. The Company recognizes the cost of the share-based awards on a straight-line basis over the requisite service period of the award. Prior to January 1, 2006, the Company accounted for stock option plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations, as permitted by Statement of Financial Accounting Standard No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). Under SFAS 123R, compensation cost recognized during 2009 and 2008 would include: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R.

General and administrative expense include salaries and employee benefits, non-cash equity compensation, rent, insurance, legal, accounting, investment management fees and other professional fees, state and local non-income based taxes, board of director fees as well as public company expenses such as transfer agent and listing fees and expenses.

On December 6, 2002, the Company completed the disposition of substantially all its operating assets, and the Company is now evaluating alternative ways to redeploy its cash, cash equivalents and marketable securities into new businesses. The discussion below is therefore not meaningful to an understanding of future revenue, earnings, operations, business or prospects of the Company following such a redeployment of its assets.

General and administrative expenses decreased $223,000, or 18%, to $1,030,000 during the three months ended June 30, 2009, compared to $1,253,000 during the three months ended June 30, 2008. The decrease in general and administrative expense for the three months ended June 30, 2009, compared to the three months ended June 30, 2008, was primarily attributable to decreases in employment compensation and benefits, professional fees, investment management fees, and travel expenses offset by increases in franchise and property taxes and non-cash equity compensation expense. General and administrative expenses decreased $450,000, or 19%, to $1,953,000 during the six-month period ended June 30, 2009, compared to $2,403,000 during the same period ended June 30, 2008. The decrease in general and administrative expense for the six months ended June 30, 2009 was primarily attributable to decreases in employment compensation and benefits, non-cash equity compensation expense, franchise and property taxes, investment management fees, other professional fees and travel expenses. Management believes we will incur a net loss in 2009 as a result of our current level of expenses and due to lower projected investment yields on our investment portfolio. General and administrative expense includes salaries and employee benefits, rent, insurance, legal, accounting and other professional fees, state and local non income based taxes, board of director fees as well as public company expenses such as transfer agent and listing fees and expenses.

Depreciation expense decreased $1,000, or 1%, to $88,000 in the three months ended June 30, 2009, compared to $89,000 in the same period ended June 30, 2008. For the six months ended June 30, 2009, depreciation expense decreased $1,000, or 1%, to $177,000, compared to $178,000 in the same period ended June 30, 2008. The decrease is primarily attributable to less depreciation for office equipment and minimal purchase of new fixed assets.

Interest income decreased $362,000, or 65%, to $197,000 for the quarter ended June 30, 2009, from $559,000 in the quarter ended June 30, 2008. Interest income for the quarters ended June 30, 2009 and 2008, includes $111,000 and $382,000 in discount accretion and premium amortization, respectively. The decrease in interest income was due primarily to lower rates of return on investments. The weighted average interest rate for our investments for the three-month period ended June 30, 2009, was 0.94% compared to 2.60% for same period in 2008.

During the six months ended June 30, 2009, interest income decreased $773,000, or 56%, to $608,000 from $1,381,000 during the six months ended June 30, 2008. Interest income for the six-month periods ended June 30, 2009 and 2008, includes $436,000 and $976,000, respectively, in discount accretion and premium amortization, respectively. The decrease in interest income was due primarily to lower rates of return that we received on our cash, cash equivalent assets and marketable securities. The weighted average interest rate for our investments for the six months ended June 30, 2009 was 1.44% compared to 3.20% for same period in 2008.

The overall combined decrease of $1.7 million in cash, cash equivalents and marketable securities from $86.0 million to $84.3 million is primarily due to the decrease in interest income for the six month period ended June 30, 2009. The Company's cash and cash equivalents increased to $65.7 million at June 30, 2009 from $19.3 million at December 31, 2008 due to a shift in the composition of the investment portfolio from marketable securities. Cash and cash equivalents are investments with a shorter duration, less than three months, under accounting principles generally accepted in the United States of America. Marketable securities decreased to $18.6 million at June 30, 2009 from $66.7 million at December 31, 2008.

Cash used by operating activities was approximately $1.8 million during the six months ended June 30, 2009, compared to cash used by operating activities of approximately $1.8 million during the six months ended June 30, 2008. The $1.8 million consisted primarily of the Company's net loss, discount amortization, a decrease in accounts payables and accrued liabilities and an increase in interest receivable, prepaids and other current assets offset by non-cash expenses.

Cash provided by investing activities was approximately $48.1 million during the six months ended June 30, 2009. The cash was provided by the maturity of marketable securities partially offset by the purchase of marketable securities. Cash used by investing activities was approximately $23.2 million during the six months ended June 30, 2008. The cash was used by the purchase of marketable securities partially offset by the maturity of marketable securities. Capital expenditures were approximately $6,000 for the six-month period ended June 30, 2009, compared to $1,000 for the same period in 2008.

At June 30, 2009, the Company has net operating loss, research and experimentation credit and alternative minimum tax credit carryforwards for U.S. federal income tax purposes of approximately $230.8 million, $1.3 million and $56,000, respectively, which expire in varying amounts beginning in the year 2009. The Company's ability to benefit from certain net operating loss and tax credit carryforwards is limited under section 382 of the Internal Revenue Code due to a prior ownership change of greater than 50%. Accordingly, approximately $226.8 million of the $230.8 million of U.S. net operating loss carryforward is currently available to offset taxable income that the Company may recognize in the future. Of the approximately $226.8 million of net operating losses available to offset taxable income, approximately $208.8 million does not expire until 2020 or later, subject to compliance with Section 382 of the Internal Revenue Code.

Clarus is currently in the process of reducing its level of operating expenses and is taking a number of steps to reduce its expected annual cash expenses on a go forward basis, including reducing and deferring executive and other compensation and related costs, headcount reductions, eliminating discretionary bonuses and reducing professional fees and other costs.

The Company's management carried out an evaluation, under the supervision and with the participation of the Company's Executive Chairman of the Board of Directors and Chief Financial Officer, its principal executive officer and principal financial officer, respectively, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2009, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, the Company's Executive Chairman of the Board of Directors and Chief Financial Officer concluded that the Company's disclosure controls and procedures as of June 30, 2009 are effective.

There have not been any changes in the Company’s internal control over financial reporting that have come to management’s attention during the second quarter ended June 30, 2009 evaluation that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

We held our annual meeting of stockholders on June 18, 2009. Of the 17,366,747 shares of common stock entitled to vote at the meeting, 15,020,894 shares of common stock were present in person or by proxy and entitled to vote. Such number of shares represented approximately 86.49% of our outstanding shares of common stock. Listed below is the matter voted upon at our Annual Meeting of Stockholders and the voting results:

ITEM 5. OTHER MATTERS

As part of our efforts to reduce our level of operating expenses, pending consummation of an asset redeployment transaction, Warren B. Kanders, our Executive Chairman, agreed with the Company and its board of directors pursuant to a letter dated August 6, 2009, to defer his $250,000 annual salary until the consummation of an asset redeployment transaction, at which time all such deferred salary will be paid to him. A copy of the letter reflecting this agreement is attached to this Quarterly Report as Exhibit 10.1 and is incorporated herein by reference as though fully set forth herein. The foregoing summary description of the letter agreement is not intended to be complete and is qualified in its entirety by the complete text of the letter agreement.

As part of additional efforts to reduce our level of operating expenses, Philip A. Baratelli, our Chief Financial Officer, agreed in a letter dated August 6, 2009 to a ten percent (10%) reduction of his current base salary of $200,000. A copy of the letter reflecting this agreement is attached to this Quarterly Report as Exhibit 10.2 and is incorporated herein by reference as though fully set forth herein. The foregoing summary description of the letter agreement is not intended to be complete and is qualified in its entirety by the complete text of the letter agreement.

Exhibit
Number		Exhibit

10.1		Letter Agreement dated August 6, 2009, between Clarus Corporation and Warren B. Kanders.

10.2		Letter Agreement dated August 6, 2009, between Clarus Corporation and Philip A. Baratelli.

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Number		Exhibit

10.1		Letter Agreement dated August 6, 2009, between Clarus Corporation and Warren B. Kanders.

10.2		Letter Agreement dated August 6, 2009, between Clarus Corporation and Philip A. Baratelli.

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Delaware		58-1972600
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

Options Granted	May 28, 2009			June 18, 2009

Option Vesting Period	Immediate			One year
Grant Price	$	4.06		$	4.00
Dividend Yield		0.00	%		0.00	%
Expected volatility		33.83	%		31.51	%
Risk-free interest rate		0.97	%		2.86	%
Expected life	1.50 years			5.31 years
Weighted average fair value	$	0.69		$	1.36

	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Restricted Stock	$	67,000	$	67,000	$	134,000	$	134,000
Stock Options	$	136,829	$	131,250	$	208,622	$	262,500
Total	$	203,829	$	198,250	$	342,622	$	396,500

				Weighted
				Average
	Options			Exercise Price
Outstanding at December 31, 2008		1,908,750		$	7.17
Granted		123,750		$	4.03
Exercised		—			—
Forfeited/Expired		(63,750	)	$	5.99
Outstanding at June 30, 2009		1,968,750		$	7.04

Options exercisable at June 30, 2009		1,713,750		$	7.22

							Weighted
					Remaining Life		Average
Exercise Price Range	Outstanding		Exercisable		In Years		Exercise Price
$3.85 - $ 4.07		123,750		78,750		6.4	$	4.03
$4.08 - $10.00		1,845,000		1,635,000		6.3	$	7.25
Total		1,968,750		1,713,750		6.3	$	7.04

	Net Operating Loss
Expiration Dates December 31,	Amount (000’s)

2009		1,911
2010		7,417
2011		7,520
2012		5,157
2020		29,533
2021		50,430
2022		115,000
2023		5,712
2024		3,566
2025		1,707
2026		476
2028		1,360
2029		1,029
Total		230,818
Section 382 limitation		(4,030	)
After Limitations	$	226,788

	FOR		WITHHELD
Election of Directors:
Burtt R. Ehrlich		12,832,885		2,188,009
Donald L. House		12,890,504		2,130,390
Warren B. Kanders		14,310,657		710,237
Nicholas Sokolow		12,832,885		2,188,009

	CLARUS CORPORATION

Date: August 6, 2009

	/s/ Warren B. Kanders
	Warren B. Kanders,
	Executive Chairman of the Board of Directors
	(Principal Executive Officer)

	/s/ Philip A. Baratelli
	Philip A. Baratelli,
	Chief Financial Officer
	(Principal Financial and
	Chief Accounting Officer)