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--- Meeting Date: Unknown Meeting Type: Call Note Type: Summary Attendees: - Scott Warner - Pascal Jehl - Casey Cavanaugh - Shawn Remick - Barbara Bement - Michael Carlson - Michael Belschner - Jon Buck - Jonathon Rosenberger - Gage Ller - GNDK --- # 1. Meeting Summary I walked the team through the current open-issues tracker for the Shaper / AdoptX transition and used it to align on risk areas, ownership, and where we need escalation. My overall takeaway is that we have workable plans forming in several areas, but a number of the most critical issues are still yellow or red because they depend on decisions from HQ, steering committee direction, or cross-functional coordination that is not yet complete. On asset valuation, Casey gave a helpful update that moved my confidence from red to yellow. The finance team is acting as the control point for resale estimates, and most asset valuation work is substantially complete aside from some remaining inputs and open questions around production tooling. We also clarified that bill of sale support, valuation method, and auditor alignment will be important for SAP treatment, particularly where certain assets may transfer at zero value. On legal structure, I reiterated that the working plan is to preserve the NOLs through TTS USA Holdings, convert Shaper into an LLC, and merge IP into Festool USA. That approach is still yellow for me because while there is a path, the full tax and legal treatment still needs to be finalized and documented. This legal entity decision also continues to block several downstream finance and operating model questions, including year-end reporting treatment and aspects of system and data transition. IT remains one of my biggest concern areas. General employee continuity is in reasonably good shape because many systems are cloud based, but backend systems continuity, cloud migration, HQ IT coordination, and customer/account-related data flows still require significant work. Shawn and Gage are advancing the technical side, including the developer server environment and Teams guest access, but much of the broader operating model still depends on decisions around how we will sell product, which systems we are retaining, and what alignment HQ expects. I remain particularly concerned about HQ IT coordination and customer data handling because those are high-impact issues where mistakes would be costly. We also spent meaningful time on customer data, ecommerce continuity, and account migration. The customer marketing database and My Shaper / My Festool account transition are strategically important because of the long purchase cycle and the role of post-purchase accessories and subscriptions in revenue retention. There appears to be a workable path, but I intentionally want that work to remain high priority because the legal and operational handling of the data needs to be done correctly. A major unresolved area is commercial continuity after 10/31 and through 1/1 and beyond. We still need much clearer direction on how tools, accessories, consumables, spare parts, hot swaps, financing, and software subscriptions will be sold and supported. Casey is going to push Matt again, and I agree this likely needs steering committee escalation. Pascal provided useful clarity that accessories, consumables, and spare parts are expected to be available through Lebanon by 1/1, but there are still open questions around Gen 2 tool sales and hot-swap logistics. On logistics and facilities, the move planning appears to be progressing reasonably well. Repair space in Lebanon is being prepared, travel arrangements are set, and the truck arrival / unpack timing is becoming clearer. There are still questions around onsite oversight, receiving, temporary storage, and final placement of non-repair items, but these feel more executable than conceptual. Casey also rightly pointed out the need for stronger financial control over asset tagging and receiving state before the physical move begins. Finally, we identified a few topics that need to be added or elevated on the tracker, especially subscription services, Avalara / tax processing impacts, banking updates for post-merger cash flow, and year-end reporting treatment. My sense at the end of the meeting was that we have the right list, but now need tighter prioritization, clearer flags for what requires group discussion, and stronger escalation on a handful of decisions that are gating too many other workstreams. # 2. Attendee List - Scott Warner - Pascal Jehl - Casey Cavanaugh - Shawn Remick - Barbara Bement - Michael Carlson - Michael Belschner - Jon Buck - Jonathon Rosenberger - Gage Ller - GNDK # 3. Action Items - [Scott] Update the open-issues spreadsheet after the meeting with current status changes and discussion outcomes. - [Scott] Develop and share a timeline for the merger-based corporate structure approach, including NOL preservation and tax treatment dependencies. - [Scott] Continue working with Germany / HQ colleagues on tax treatment validation for the merger structure. - [Scott] Follow up with Philip to confirm direction before broader communication on employee asset purchase / IT asset disposition. - [Scott] Continue educating HQ legal on US legal requirements related to customer data handling and merger execution. - [Scott] Nudge Lauren for legal entity clarity, which was expected by the end of the week. - [Scott] Coordinate with Shawn and Jonathon Rosenberger on inbound inventory, warehouse impact, and storage planning. - [Scott] Meet with Shawn and Gage to determine Festool-side onsite support needed for move-out day. - [Scott] Consider adding a column in the tracker to flag which items need live discussion in future meetings. - [Casey] Continue asset valuation work with Patrick's team and Christina to complete remaining resale estimates by end of week. - [Casey] Meet with Greg on asset valuation follow-up. - [Casey] Conduct a final sanity check / spot check on asset estimates with me and Shawn once the list is complete. - [Casey] Push Matt again for direction on post-10/31 and post-1/1 sales model decisions and escalate as needed to the steering committee. - [Casey] Review the document Pascal referenced regarding sellable items, accessories, consumables, and spare parts for future operating model understanding. - [Casey] Further define financial control checkpoints for the move, including asset list cleanup and possible tagging for easier receiving. - [Casey] Add software subscription continuity to the core issue list and continue coordinating on third-party vendor ownership questions. - [Shawn] Continue HQ IT coordination discussions, including the upcoming meeting with Catherine Earhart. - [Shawn] Continue backend systems continuity analysis based on future-state selling model and system dependency decisions. - [Shawn] Continue work to gain access to cloud infrastructure / systems with support from Philip. - [Shawn] Drive completion of the developer server environment transition once the server arrives. - [Shawn] Follow up with Greg on move resource planning and alignment before the move. - [Shawn] Continue coordination with Chip and Angela on video / session equipment disposition and timing. - [Shawn] Work with me and Jonathon Rosenberger on move receiving and warehouse planning. - [Shawn] Work with Casey on potential technology support for move-day asset control / tagging. - [Shawn] Share a more comprehensive move timeline and overview in next week's meeting. - [Shawn] Continue coordination on Avalara / tax processing implications tied to software subscriptions. - [Gage] Continue work on cabling, office changes, and repair-area IT setup in Lebanon. - [Gage] Continue working through Teams guest access issues for Shaper users with HQ. - [Gage] Coordinate with Pascal and GNDK on system setup and parts ordering requirements as needed. - [Gage] Meet with me and Shawn to align on onsite move support needs. - [Pascal] Share the existing item / SKU document covering sellable and non-sellable items, item numbers, costs, and future-state setup. - [Pascal] Take the parts setup and ordering timeline discussion offline with GNDK and me. - [Pascal] Send Michael Belschner the dealer sales list he referenced. - [Pascal] Continue weekly coordination with repair / factory teams on parts availability and timeline. - [Pascal] Provide support for move execution and repair-area setup in Lebanon once equipment arrives. - [Michael Carlson] Confirm SAP documentation requirements for transferred assets, especially those entered at zero value, subject to auditor support. - [Michael Carlson] Ensure banking information is updated before the merger so automatic deposits route correctly. - [Michael Carlson] Add year-end reporting / merger accounting treatment to the issue list and coordinate with corporate finance on approach. - [Michael Belschner] Own the trade show kit / booth asset workstream. - [Michael Belschner] Review available sales data and continue seeking dealer-level detail and display deployment information. - [Jon Buck / Angela] Support planning for My Shaper to My Festool account migration and continuity of customer marketing / account functionality. - [Jon Buck] Continue helping on software subscription continuity and customer-impact considerations. - [Jonathon Rosenberger] Continue warehouse planning for inbound Shaper inventory, including overflow / offsite storage assessment if needed. - [Jonathon Rosenberger] Coordinate with Shawn on where moved items will land and how they will be staged upon arrival. - [GNDK] Meet with Pascal to review part numbers, ordering requirements, and order timing. - [GNDK] Work through what is needed in the system to support parts ordering once timelines are confirmed. # 4. Relevant Timelines - End of this week - [Casey / Patrick's team / Christina] Target to make remaining asset resale estimates relatively complete. - [Scott] Expected timing for legal entity clarity from Lauren. - Tomorrow - [Casey] Meeting with Greg on asset valuation topic. - Next week - [Scott / Shawn] Meeting with Catherine Earhart on HQ IT alignment. - [Shawn] Planned sharing of a more complete move timeline and overview in the next team meeting. - [R&D / engineering team] Expected meeting to define required lab / development equipment to retain in the US. - April 8 - [Shawn / Gage] Cabling work for repair and office changes expected to occur around this date. - April 13 - [Shawn / Gage] Target completion date for developer server environment setup, dependent on server arrival. - April 6 - [Greg / Shaper team] Packing begins and repair / related areas will no longer be touched after that point. - One to two weeks before truck arrival - [Pascal / facilities / local team] Window to complete Lebanon repair-area modifications, including flooring changes. - Friday truck arrival, with setup beginning the following Tuesday - [Pascal / repair team / Shaper team] Move-in and setup sequence for repair operations in Lebanon. - Late August / September - [GNDK / Pascal] Earliest timeframe when parts orders would begin flowing through the system unless earlier action is required for availability planning. - November 1 - Current understanding is that tool sales stop after 10/31 until Festool go-live, but accessories / consumables / spare parts may still need continuity. - [Pascal / HQ teams] Target for system and operational readiness to support spare parts, accessories, and consumables through Lebanon. - [Repair team] Need support capability for hot-swap replacement tools even if they are not sold traditionally. - January 1 - [Pascal / HQ / supply chain / SAP teams] Goal for Lebanon to be able to sell and ship spare parts, accessories, and consumables. - Q3 - [Angela / Chip / Shawn / Casey] Session equipment disposition expected to become a Q3 topic for final decisions. - 2026 year-end / 2027 - [Michael Carlson / Casey / finance] Need decision on whether merger accounting is handled in 2026 close or beginning in 2027. # 5. Additional Notes - I used Copilot to help build the initial red / yellow / green issue list, then validated it with Shawn and Casey. The list is current enough to serve as the working control document, but we need to start assigning owners more aggressively and closing items. - Asset valuation is improving, but production tooling remains the most material open valuation issue due to uncertain fair value and future use. - Auditor alignment matters for any zero-value transfers into SAP, even where assets are fully depreciated. - The legal entity / merger structure is a central dependency. Until that is fully resolved, multiple finance, tax, data, and operational items remain partially blocked. - HQ IT coordination remains one of my top concerns. There is still too much ambiguity around system ownership, transition requirements, and support model. - Customer data handling is strategically high stakes. Marketing data is valuable not just for current revenue but because the purchase cycle can run 12+ months, meaning today's leads may drive 2027 sales. - My Shaper account migration and customer registration continuity are critical both for marketing and for functional product support. - DTC checkout and financing continuity are business-critical. Jon noted that roughly half of sales are DTC and that a large majority of those transactions use financing, so losing financing would materially affect conversion and order value. - Software subscriptions should now be treated as a core continuity issue, not a secondary one. This includes vendor ownership, revenue recognition, tax processing through Avalara, and banking updates after merger. - Lebanon repair setup appears to be progressing well, including office moves, floor remediation, travel planning, and physical space readiness. - On the move itself, the biggest remaining logistics questions are final staging, short-term storage, and clean receiving control rather than whether the move can happen. - Pascal confirmed that most repair-related equipment should be put to use quickly after arrival, especially the racking and workbenches, which helps limit long-term storage burden. - Barbara clarified that vendor setup in Wendlingen does not automatically mean vendors are set up in the US legal entity, which remains an important distinction. - Shawn suggested we add a tracker field to identify which topics actually need live meeting discussion. I agree that would help make future meetings more efficient.
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