Accrued expenses consisted of the following:


	As of September 30, 2026		As of June 30, 2026
Warranties	$	40,879	$	41,239
Dealer incentives	14,436		15,200
Accrued compensation	12,796		21,110
Current operating lease liabilities	4,909		4,899

Accrued legal and professional fees 1	10,099		25,569
Customer deposits	40,831		49,442
Government grant 2	4,089		4,089
Current contingent consideration 3	3,835		4,052
Other accrued expenses	3,593		2,537
Total accrued expenses	$	135,467	$	168,137

1 Accrued legal and professional fees include approximately $6.0 million and $21.0 million as of September 30, 2026 and June 30, 2026, respectively, in insurance coverage proceeds that are subject, in certain cases, to reservations of rights by the insurance carriers. The proceeds will be considered a liability in accrued expenses until the resolution of the litigation. During the three months ended September 30, 2026, the Company concluded that $15.0 million of insurance proceeds previously received from Starr Indemnity & Liability Company were no longer subject to a reservation of rights following Starr's dismissal from the related litigation. As a result, the Company derecognized the associated liability and recognized a $15.0 million reduction of general and administrative expense in the unaudited interim condensed consolidated statements of operations. For more information, refer to Note 17 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

2 Government grant includes approximately $4.1 million related to an Economic Development Grant paid by the State of Tennessee in relation to the Company's purchase of a production facility in Roane County, Tennessee and the moving production of certain models of Cobalt boats from Kansas to Tennessee. The grant requires the Company to create and maintain a specified number of jobs in order to retain the grant. The accrued liability will be relieved as the Company satisfies headcount requirements.

3 Contingent consideration related to the Saxdor acquisition is to be paid out in calendar year 2027, 2028, and 2029 based on the results of the remainder of calendar year 2026 and the subsequent two calendar years, respectively, if certain requirements are met. $3.8 million of the contingent consideration was recognized as a current liability given expected settlement within one year from the balance sheet date. The remaining $25.4 million is recognized in other long-term liabilities on our unaudited balance sheet as of September 30, 2026. See further details on the Saxdor acquisition in Note 4 — Acquisition.