cmpo-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 001-39687

CompoSecure, Inc.

(Exact name of registrant as specified in its charter)


Delaware						85-2749902
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

309 Pierce Street Somerset, New Jersey 08873

(908) 518-0500

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

CMPO

The Nasdaq Global Market

Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock

CMPOW

The Nasdaq Global Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes

☐ No ☒

As of May 07, 2025, there were approximately 102,317,852 shares of the registrant's Class A common stock outstanding .

Table of Contents


		Page
Part I.	Financial Information	2
Item 1.	Financial Statements	2
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Operations (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Unaudited)	5
	Consolidated Statements of Stockholders’ Deficit (Unaudited)	6
	Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
Part II.	Other Information	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	68
Signatures		71

EXPLANATORY NOTE REGARDING CHANGE TO EQUITY METHOD ACCOUNTING

Effective as of February 28, 2025, as a result of the spin-off (the "Spin-Off") of Resolute Holdings Management, Inc. ("Resolute Holdings") and the related Management Agreement (the "Management Agreement") between the Company's wholly-owned subsidiary, CompoSecure Holdings, L.L.C. ("Holdings") and Resolute Holdings, the results of operations of Holdings, and its operating company subsidiaries, are not consolidated in the Company's financial statements included in this Quarterly Report on Form 10-Q and, instead, are accounted for under the equity method of accounting. Under the equity method of accounting, Holdings’ accounts are not reflected within the Company’s consolidated balance sheets and statements of operations. The Company’s share of the earnings of Holdings is reported in the Company’s consolidated statements of operations as earnings from equity method investment. The Company’s carrying value in Holdings is reported on the Company’s consolidated balance sheets as equity method investment.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and the documents incorporated by reference herein, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although the Company believes that its plans, intentions, and expectations reflected in or suggested by these forward- looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning the Company’s possible or assumed future actions, business strategies, events, or results of operations, are forward- looking statements. In some instances, these statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect the Company’s future results and could cause those results or other outcomes to differ materially from those expressed or implied in the Company’s forward-looking statements:

•Risks of rapidly evolving domestic and global economic conditions, which are beyond our control;

•We may fail to retain existing customers or identify and attract new customers;

•Data and security breaches could compromise our systems and confidential information, cause reputational and financial damage and increase risks of litigation;

•System outages, data loss or other interruptions could affect our operations;

•We may not be able to recruit, retain and develop qualified personnel, including for areas of newer specialized technology;

•Our future growth may depend upon our ability to develop and commercialize new products, and we may be unable to introduce new products and services in a timely manner;

•Disruptions in our supply chain or the performance of our suppliers and/or development partners could occur;

•We have limited experience in the digital assets industry and may not succeed in fully commercializing the products and solutions derived from the Arculus technology;

•Risks related to the rapid evolution of the security markets, including that our Arculus Authenticate solutions may not achieve widespread market acceptance or may not provide sufficient protection;

•Our dependence on certain distribution partners and the risk of their loss;

•Risks to market share and profitability due to competition;

•Risks relating to the management of our business by Resolute Holdings, including our reliance on Resolute Holdings for management services under the Management Agreement, which gives Resolute Holdings substantial influence over our business, operations, and strategy;

•We may fail to successfully manage and integrate acquisitions or strategic transactions, which could negatively impact our financial performance and growth prospects;

•The outcome of any legal proceedings that may be instituted against the Company or others;

•Future exchange and interest rates; and

•other risks and uncertainties indicated in this report, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC.

These and other factors that could cause actual results to differ from those implied by the forward- looking statements in this report are more fully described in the “Risk Factors” section. The risks described in “Risk Factors” are not exhaustive. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Part 1 - Financial Statement

Item 1. Financial Statements


COMPOSECURE, INC.
Consolidated Balance Sheets
($ in thousands, except par value and share amounts)


	March 31, 2025		December 31, 2024
	Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	9,506	$	77,461
Accounts receivables	—		47,449
Inventories, net	—		44,833
Prepaid expenses and other current assets	1,321		4,159
Total current assets	10,827		173,902

Property and equipment, net	—		23,448
Right-of-use asset - operating leases	—		5,404
Deferred tax asset	266,652		264,815
Derivative asset - interest rate swap	—		2,749
Equity method investment	14,844		—
Deposits and other assets	—		3,600
Total assets	292,323		473,918

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	4,025		11,544
Accrued expenses	28,594		14,682
Bonus payable	—		8,466
Commission payable	—		2,563
Current portion of long-term debt	—		11,250
Current portion of lease liabilities - operating leases	—		2,113
Current portion of earnout consideration liability	9,303		20,533
Current portion of tax receivable agreement liability	5,171		5,171
Total current liabilities	47,093		76,322


Long-term debt, net of deferred financing costs	—		184,389
Warrant liability	84,003		104,231
Lease liabilities - operating leases	—		3,888
Tax receivable agreement liability	248,534		248,534
Total liabilities	379,630		617,364

Commitments and contingencies (Note 14)

Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding	—		—
Class A common stock, 0.0001 par value; 250,000,000 shares authorized,102,317,852 and 100,462,844 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	10		10
Class B common stock, $0.0001 par value; 75,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024	—		—
Additional paid-in-capital	206,477		361,379
Accumulated other comprehensive (loss) income	(206)		2,543
Accumulated deficit	(293,588)		(507,378)
Total stockholders' deficit	(87,307)		(143,446)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	292,323	$	473,918

The accompanying notes are an integral part of these financial statements.


COMPOSECURE, INC.
Consolidated Statements of Operations (Unaudited)
($ in thousands except per share amounts)


	Three Months Ended March 31,
	2025	2024

Net sales	59,824	104,010
Cost of sales	31,075	48,797
Gross profit	28,749

SEC Form 10-Q filed by CompoSecure Inc.