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--- Meeting Date: Unknown Meeting Type: Other Note Type: Summary Attendees: - Amity Sendama - Scott Warner - Robert Hatfield - Michael Carlson --- ## 1. Meeting Summary I met with Amity and Mike to work through the open questions around the Shaper transition, specifically the NetSuite renewal, the accounting treatment of the entity merger, and the practical implications for ecommerce after close. The main issue was that there still does not appear to be one aligned understanding across the broader group on how the transaction is supposed to function operationally once Shaper stops operating as a standalone business. My view remains that if we are merging entities, there should be a clean closing balance sheet and a transfer of activity into our environment, with AR collection and any remaining post-close activity becoming our responsibility rather than continuing to run Shaper's systems as if it were still an active standalone company. Amity and Mike were aligned with that interpretation. We all questioned the logic behind keeping NetSuite running for an extended period if there are no ongoing standalone transactions that require it. The biggest unresolved dependency is ecommerce. That is the one area where NetSuite may still have indirect relevance if Shopify and related sales flows are currently tied into it, but even there the conclusion was that we should not assume NetSuite is required long term. I pulled Robert into the conversation, and he confirmed that while we still do not have a final ecommerce operating model, he does not see a reason NetSuite would need to remain functional after February 2027. His expectation is that, if necessary, we can continue using the Shopify front end and manage fulfillment/order entry manually into SAP rather than maintaining NetSuite. There was also concern about broader North America ecommerce capability. HQ is now signaling limited bandwidth to support additional ecommerce work, which creates execution risk. At the same time, there is separate pressure from marketing to move away from the current Shopify Plus environment, which Robert correctly flagged as risky given the revenue currently flowing through that platform. From a finance and audit standpoint, Mike does not see a compelling reason to maintain NetSuite beyond what is needed to support closing, reconciliation, and data retention. Amity also noted CLA expects a closing balance sheet as of 10/31 and did not see a need for the system beyond a reasonable post-close support period. We also surfaced that NetSuite may charge a separate fee to provide a data archive at termination, which needs to be clarified in the vendor discussion. Overall, the meeting clarified that the business, finance, and operating teams are generally aligned around minimizing the NetSuite renewal term, likely targeting a shorter extension rather than a full year, but we still need a tighter cross-functional decision with Casey and others because the ecommerce path and system implications are not yet fully settled. ## 2. Attendee List - Amity Sendama - Scott Warner - Robert Hatfield - Michael Carlson ## 3. Action Items - [Scott] Meet with NetSuite/vendor contact at 12:30 to begin negotiating the shortest practical renewal term, with a target well below a full-year commitment. - [Scott] Clarify with NetSuite the termination/data archive terms, including any fees required to export or receive a full archive of company data. - [Scott] Confirm confidentiality protections before discussing transition details with the external vendor contact and reinforce that the discussion must remain limited to call participants. - [Scott] Follow up after the vendor discussion with Amity and Mike on negotiation outcome and implications. - [Scott] Coordinate a follow-up discussion with Casey, Amity, and Mike so the group can align on transaction workflow, NetSuite duration, and post-close operating assumptions. - [Scott] Continue driving clarity on the post-close ecommerce model, including whether Shopify can remain in place while orders are handled outside NetSuite. - [Scott] Engage the right HQ stakeholders on ecommerce/system ownership, potentially including Stefan or other strategy/IT leaders, if additional alignment is needed. - [Robert] Finalize the Shaper sales plan by SKU, including which SKUs are appropriate for dealer distribution versus ecommerce-only fulfillment. - [Robert] Obtain additional SKU/channel detail from Philip to support the direct sales and ecommerce plan. - [Robert] Continue evaluating how Shopify orders could be managed operationally without relying on NetSuite. - [Michael] Assess accounting and reconciliation options if AR collections and other residual items are handled outside NetSuite after close. - [Amity] Reconnect with Casey after the vendor conversation so the team can align on the accounting treatment and system strategy. - [Amity] Continue coordination with CLA as needed regarding closing balance sheet expectations, audit scope, and timing. ## 4. Relevant Timelines - 10/31 - Expected operating close date for Shaper activity and closing balance sheet reference point. - 12/31 - Discussed as a potential legal/tax-effective timing consideration if needed for tax loss transfer and year-end treatment. - February 2027 - Current outer bound discussed for keeping NetSuite available; Robert and Mike both indicated they do not see a need beyond this point. - August - NetSuite/vendor appears to have contractual timing leverage through August, which affects negotiation posture. - End of quarter - Vendor appears motivated to close the renewal deal by quarter end, which may create negotiating pressure. - 12:30 today - Scott and Shawn scheduled to meet with the NetSuite/vendor contact to discuss renewal structure and related terms. - Thursday/tomorrow - Mike has a call related to valuation/audit planning. ## 5. Additional Notes - There is still a material disconnect between how some stakeholders are describing the transaction and how finance/operations believe it should actually work. That needs to be resolved quickly. - The strongest shared point in the meeting was that continuing NetSuite only makes sense if it is truly needed to support ecommerce or a specific operational dependency. No one in the discussion supported keeping it for a full year based on current facts. - The 60-day AR collection concept did not make sense in the context of a true entity merge. The assumption from our side is that collections would become our responsibility, not remain in a legacy operating environment. - Ecommerce remains the single biggest unresolved systems issue. We know the business intends to continue selling online, but we still do not have a clean answer for how. - Robert raised an important commercial point that some Shaper SKUs are unlikely to be supported well through the dealer channel and may need to remain ecommerce-only. - There is separate organizational risk around Shopify. Marketing may be trying to exit Shopify Plus for budget reasons, but that could disrupt a meaningful revenue stream if done without a real replacement plan. - HQ has reportedly said they do not currently have capacity to launch more ecommerce capability in North America, which may require local resourcing or manual workarounds. - We also touched briefly on valuation. My understanding is Germany's tax team may be handling the valuation work, and if so, CLA's role may be more focused on reviewing/testing valuation rather than performing a full Shaper audit. - I need to keep pressure on getting one integrated answer across finance, IT, commercial, and HQ because right now too many decisions are still being made based on assumptions rather than a confirmed operating model.
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