GPGI 10-K & 10-Q changes, risk factors and insider trading
GPGI, Inc. · NYSE · Finance Services · CIK 1823144 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our accounting is complex, and if it is erroneous or based on assumptions that change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price.”
New heading “Risks Related to the Management Agreements”
New heading “Our businesses are managed for a fee by Resolute Holdings, which has substantial influence over our businesses, operations and strategy and upon which our businesses are heavily reliant.”
New heading “The Management Agreements do not create a mutually exclusive relationship between Holdings, Husky Holdings, and Resolute Holdings.”
New heading “The Management Agreements may each be terminated by Resolute Holdings, on the one hand, or Holdings and Husky Holdings, on the other hand, as applicable, and a termination fee may be payable in certain circumstances.”
New heading “Resolute Holdings maintains a contractual as opposed to a fiduciary relationship with Holdings and Husky Holdings, and has limited liability under its respective Management Agreement for which it may be indemnified.”
New heading “Risks Related to the Business of CompoSecure”
New heading “Failure to retain existing customers or identify and attract new customers could adversely affect the business, financial condition and results of operations of our CompoSecure business.”
New heading “Disruptions at our CompoSecure business’ primary production facility may adversely affect the business, results of operations and/or financial condition of our CompoSecure business.”
New heading “The future growth of our CompoSecure business may depend upon its ability to develop and introduce new products.”
New heading “The results of operations of the Husky business are reliant on unpredictable customer purchasing trends.”
New heading “Growth in emerging markets may impact the sales of the Husky business.”
New heading “There is no certainty that the Husky business will be able to manage fluctuations in raw materials.”
New heading “Failure of suppliers to deliver in a timely and cost-effective manner would adversely impact our operations.”
New heading “The Husky business is subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. The Husky business could face serious consequences for violations, which could harm our business.”
New heading “The Husky business may face exposure to adverse movements in foreign currency exchange rates.”
New heading “The significant international operations of the Husky business subject us to risks inherent in doing business in foreign jurisdictions.”
New heading “If the Husky business is unable to continue the technological innovation and successful introduction of new products into the market, customers may delay their orders or turn to other manufacturers.”
New heading “If the use of plastic as a packaging material declines, it could materially adversely affect the business, financial condition or results of operations of our Husky business.”
New heading “If products offered by our Husky business fail to perform or fail to meet customer requirements or expectations, we could incur significant additional costs.”
New heading “The Husky business relies on the timely delivery of raw materials and components that meet our standards for the continued production and delivery of products and services, and any inability to obtain such raw materials and components could impede the ability of the Husky business to manufacture and deliver its products and services as it requires.”
New heading “New or increased taxes or other governmental regulations targeted to decrease the consumption of certain type of beverages may adversely affect our Husky business.”
New heading “Patents may not prevent competitors from making and selling products that are similar to the products of the Husky business.”
New heading “Some customers of our Husky business have been sued for patent infringement in connection with a specific design of products made using molds purchased from Husky, and in the future the Husky business could face similar lawsuits.”
New heading “Unanticipated changes in tax provisions, variability of quarterly and annual effective tax rates, the adoption of new tax legislation or exposure to additional tax liabilities could impact our financial performance.”
New heading “The Husky business is subject to other market risks.”
New heading “Our substantial indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness.”
New heading “We may not be able to generate sufficient cash flows from operations to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.”
New heading “Despite our high level of indebtedness, we and our subsidiaries are able to incur significant additional amounts of debt or we may pay dividends or make other payments in the future, which could further exacerbate the risks associated with our substantial financial leverage.”
New heading “Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.”
Removed heading “Failure to retain existing customers or identify and attract new customers could adversely affect our business, financial condition and results of operations.”
Removed heading “Disruptions at our primary production facility may adversely affect our business, results of operations and/or financial condition.”
Removed heading “We are dependent on certain distribution partners for distribution of our products and services. A loss of distribution partners could adversely affect our business.”
Removed heading “We face competition that may result in a loss of our market share and/or a decline in profitability.”
Removed heading “As consumers and businesses spend less, our business, operation outcomes, and financial state may be adversely affected.”
Removed heading “Pandemics or a resurgence of a pandemic may adversely affect our business, financial condition, liquidity or results of operations.”
Removed heading “Our business is managed for a fee by Resolute Holdings, which has substantial influence over our business, operations and strategy and upon which our business is heavily reliant.”
Removed heading “The Management Agreement does not create a mutually exclusive relationship between Holdings and Resolute Management.”
Removed heading “The Management Agreement may be terminated by Resolute Holdings or Holdings, and a termination fee may be payable in certain circumstances.”
Removed heading “Resolute Holdings maintains a contractual as opposed to a fiduciary relationship with Holdings, and has limited liability under the Management Agreement for which they may be indemnified.”
Removed heading “We have a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our business, financial condition and results of operations.”
Removed heading “Upon the occurrence of an event of default relating to our credit facility, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit.”
Removed heading “The debt outstanding under our existing credit facility has a variable rate of interest that is based on the SOFR which may have consequences for us that cannot be reasonably predicted and may increase our cost of borrowing in the future.”
Removed heading “Our credit facility contains restrictive covenants that may impair our ability to conduct business.”
Removed heading “We are a "controlled company" within the meaning of the Nasdaq listing rules and, as a result, qualify for and rely on certain exemptions from certain corporate governance requirements.”
Removed heading “As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our securities less attractive to investors.”
Removed heading “If we do not properly maintain and implement all required accounting practices and policies, including new accounting practices and policies, as applicable, we may be unable to provide the financial information required of a United States publicly traded company in a timely and reliable manner.”
Removed heading “Our Warrants may not remain in the money, and they may expire worthless.”
Removed heading “Our Warrants may be redeemed prior to their exercise at a time that is disadvantageous to the holders, thereby making such Warrants worthless.”
Removed heading “Warrants to purchase our Class A Common Stock are presently exercisable, which could increase the number of shares of Class A Common Stock eligible for future resale in the public market and result in dilution to our stockholders.”
Removed heading “We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002, which could have a material adverse effect on our business.”
Removed heading “Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as we are an “emerging growth company.””
Largest changes
We have administrative, technical, and physical security measures in place, and we have policies and procedures in place to both evaluate the security protocols and practices of our vendors and to contractually require service providers to whom we disclose data to implement and maintain reasonable privacy and security measures. However, although cybersecurity remains a high priority, our activities and investment may not sufficiently protect our system or network against cyber threats, nor sufficiently prevent or limit the damage from any future security breaches. As our businesses expand and these threats continue to evolve, we may be required to expend significant capital and other resources to protect against these security breaches or to alleviate problems caused by these breaches, including costs to deploy additional personnel and protection technologies, integrate cybersecurity programs and systems across businesses, train employees, and engage third-party experts and consultants, which could materially and adversely affect our business, financial condition and results of operations.see in full comparisonAlthoughThese threats continue to increase as the frequency, intensity and sophistication of attempted attacks and intrusions increase around the world. In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe. For example, in March 2023, the Husky business experienced a cybersecurity incident involving unauthorized access to certain systems and the exfiltration of certain data. Following the incident, the Husky business undertook response and remediation actions, including engaging external advisors, investigating the incident, restoring affected systems, and enhancing security controls. In connection with the incident, the Husky business made a payment to the threat actor. Extortion payments may alleviate the negative impact of a ransomware attack, but wemaintain cyber liability insurance, we cannotmay becertainunwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting payments, and there is always a risk thatourthecoveragethreat actor willbenotadequateadherefortoliabilitiesnegotiatedactually incurredterms or thatinsurancethreat actors willcontinueinitiatetootherbeattacks.availableAnytocybersecurityus on economically reasonable terms,incidents, oratabuseall.orFurthermore, any material breachmisuse of oursecurityinternalsystemsplatform controls and system tools, even if inadvertent, could result in potential legal liability and reputational damage to both the customers of our businesses and us, which could significantly and adversely harm ourcompetitivebusinessposition,andresultreputation. In addition, if it becomes necessary for our businesses to further restrict the availability or use of platform controls and system tools by employees inaresponselossto any abuse or misuse, the ability ofcustomerourtrustbusinesses to deliver high-quality andconfidence,timelyandcustomercause us to incur significant costs to mitigate or remedy any damage resulting from system or network disruptions, whether caused by cyberattacks, security breaches or otherwise, whichsupport couldultimatelybeadversely affect our business, financial condition and results of operations.impaired.
“Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.”see in full comparison
U.S. and international marketssee in full comparisonand,mayin particular, the rapidly evolving digital assets industry, are experiencingexperience uncertain and volatile economicconditions, including from the after-effects of the COVID-19 pandemic, the war in Ukraine, the conflict in Israel, Gaza and the surrounding areas, inflation, threats or concerns of recession, and supply chain disruptions.conditions. These conditions make it extremely difficult for us and our suppliers to accurately forecast and plan future business activities. Additionally, a significant downturn in the domestic or global economy may cause our existing customers to pause or delay orders and prospective customers to defer new projects.Together, these circumstances create an environment in which it is challenging for us to predict future operating results, particularly for our Arculus products and services.If these uncertain business, macroeconomic or political conditions continue or further decline, our business, financial condition and results of operations could be materially adversely affected.
“The Husky business is subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. The Husky business could face serious consequences for violations, which could harm our business.”see in full comparison
“Upon the occurrence of an event of default relating to our credit facility, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit.”see in full comparison
“Additionally, if we cannot make scheduled payments on our debt, we will be in default and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the New Credit Facility could terminate their commitments to loan additional money to us, the lenders could enforce or foreclose against the assets securing their borrowings and we could be forced into bankruptcy, liquidation or other form of insolvency proceeding.”see in full comparison
Full comparison: every changed paragraph (295)
•Risks Related to ourOur BusinessBusinesses
◦Failure to retain existing customers or identify and attract new customers could adversely affect our business, financial condition and results of operations.
◦We may not be able to recruit, retain and develop qualified personnel, including for areas of newer specialized technology which could adversely affect our ability to grow our business.
◦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.
◦A disruption in our operations or supply chain or the performance of our suppliers and/or development partners could adversely affect our business and financial results.
◦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.
◦Security markets, including the market for authentication solutions, are rapidly evolving to address increasing and challenging cyber threats, including identity theft, and the Company's Arculus Authenticate solutions may not achieve widespread market acceptance.
◦Our Arculus Authenticate solutions may not achieve widespread market acceptance or may not provide sufficient protection.
◦Production quality and manufacturing process disruptions could adversely affect our business.
•Risks Related to the Resolute Transaction
◦We are a controlled company following the completion of the Resolute Transaction, and are subject to the significant influence of Resolute, which may result in conflicts of interest and limit the governance protections available to other shareholders.
•Risks Related to the Management AgreementAgreements
◦Risks associated with the management of our businesses for a fee by Resolute Holdings, which has substantial influence over our businesses, operations and strategy and upon which our businesses are heavily reliant.
•Risks Related to the Business of CompoSecure
◦Failure to retain existing customers or identify and attract new customers could adversely affect the business, financial condition and results of operations of our CompoSecure business.
◦The future growth of our CompoSecure business may depend upon its ability to develop and commercialize new products, and our CompoSecure business may be unable to introduce new products and services in a timely manner.
◦A disruption in the operations or supply chain of our CompoSecure business or the performance of its suppliers and/or development partners could adversely affect the business and financial results of our CompoSecure business.
◦Security markets, including the market for authentication solutions, are rapidly evolving to address increasing and challenging cyber threats, including identity theft, and our CompoSecure business’ Arculus Authenticate solutions may not achieve widespread market acceptance.
◦Regulatory changes or actions may restrict the use of the Arculus Cold Storage Wallet or digital assets in a manner that adversely affects the business, prospects or operations of our CompoSecure business.
◦Production quality and manufacturing process disruptions could adversely affect our CompoSecure business.
•Risks Related to the Business of Husky
◦The results of operations of the Husky business are reliant on unpredictable customer purchasing trends.
◦Growth in emerging markets may impact the sales of the Husky business.
◦There is no certainty that the Husky business will be able to manage fluctuations in raw materials.
◦Failure of suppliers to deliver in a timely and cost-effective manner would adversely impact our operations.
◦The significant international operations of the Husky business subject us to risks inherent in doing business in foreign jurisdictions.
◦New or increased taxes or other governmental regulations targeted to decrease the consumption of certain type of beverages may adversely affect our Husky business.
◦Our reliance on Resolute Holdings for management services under the Management Agreement exposes us to risks including those related to Resolute Holdings' substantial influence over our business, operations, and strategy.
◦Our substantial indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness.
◦We may not be able to generate sufficient cash flows from operations to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
◦Despite our high level of indebtedness, we and our subsidiaries are able to incur significant additional amounts of debt or we may pay dividends or make other payments in the future, which could further exacerbate the risks associated with our substantial financial leverage.
◦Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
◦Our indebtedness may limit our operating flexibility.
◦Upon the occurrence of an event of default in our credit facility, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit.
◦The debt outstanding under the Company's existing credit facility has a variable rate of interest that is currently based on the Secured Overnight Financing Rate (“SOFR”). These rates may have consequences that cannot be reasonably predicted and may increase the Company's cost of borrowing in the future.
•General Risks Related to the ownershipOwnership of ourOur Securities
◦Our only significant asset is our ownership of Holdings.our subsidiaries’ businesses. If the businessbusinesses of Holdingsour issubsidiaries are not profitably operated, Holdingsthey may be unable to make distributions to enable us to pay any dividends on our common stock or satisfy our other financial obligations.
◦Provisions in our chartercertificate of incorporation (the "Charter") and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.
◦We may be unable to satisfy the NYSE listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions.
◦As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.
◦Because certain significant stockholders control a significant percentage of our Class A Common Stock, such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our Class A Common Stock.
◦The warrants, each of which entitles the registered holder to purchase one share of the Company’s Class A Common Stock at a price of $7.97 per share (as adjusted effective February 28, 2025) (the "Warrants") may not remain in the money, and they may expire worthless.
Investing in our securities involves risks. Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Additionally, the risks and uncertainties described in this report, or in any document incorporated by reference herein, are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.
Risks Related to Our BusinessBusinesses
U.S. and international markets and,may in particular, the rapidly evolving digital assets industry, are experiencingexperience uncertain and volatile economic conditions, including from the after-effects of the COVID-19 pandemic, the war in Ukraine, the conflict in Israel, Gaza and the surrounding areas, inflation, threats or concerns of recession, and supply chain disruptions.conditions. These conditions make it extremely difficult for us and our suppliers to accurately forecast and plan future business activities. Additionally, a significant downturn in the domestic or global economy may cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results, particularly for our Arculus products and services. If these uncertain business, macroeconomic or political conditions continue or further decline, our business, financial condition and results of operations could be materially adversely affected.
Failure to retain existing customers or identify and attract new customers could adversely affect our business, financial condition and results of operations.
Our two largest customers are JPMorgan Chase and American Express. Together, these customers represented approximately 63% and 71% of our net sales for the years ended December 31, 2024 and 2023, respectively. Our ability to meet our customers’ high-quality standards in a timely manner is critical to our business success. If we are unable to provide our products and services at high quality and in a timely manner, our customer relationships may be adversely affected, which could result in the loss of customers.
Our ability to maintain relationships with our customers or attract new customers may be affected by several factors beyond our control, including more attractive product offerings from our competitors, widespread industry disruptions (such as adverse crypto market disruptions, adoption or enactment of new legislation or agency rules and the outcomes of regulatory enforcement actions and other major litigation), pricing pressures or the financial health of these customers, many of whom operate in competitive businesses and depend on favorable macroeconomic conditions. In addition, we may also be limited in the products we can offer and the pricing we can receive for such products due to restrictions present in certain of our customer contracts, which may negatively impact our ability to retain existing customers or attract new customers. If we experience difficulty retaining customers and attracting new customers, our business, financial condition and results of operations may be materially and adversely affected.
As part of our business strategy, we mayintend to, from time to timetime, seek to acquire businesses or interests in businesses, including non-controlling interests, or form joint ventures or create strategic alliances. The due diligence we undertake with respect to potential targets may not reveal or highlight all relevant facts that are necessary or helpful in evaluating the potential target, and we will incur expenses in connection with performing such due diligence whether or not an acquisition is ultimately completed. Whether we realize the anticipated benefits from such activities may depend, in part, upon the successful integration between the businesses involved, the performance and development of the underlying products, capabilities or technologies, our correct assessment of assumed liabilities and the management of the operations. Accordingly, our financial results could be adversely affected by unanticipated performance and liability issues, our failure to achieve synergies and other benefits we expected to obtain, transaction-related charges, amortization related to intangibles, and charges for impairment of long-term assets.
Our ability to realize the expected synergies and benefits of an acquisition may also be subject to, among other things, our ability to complete the timely integration of operations and systems, standards, controls, procedures, policies and technologies, difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the combination, and difficulties in managing the expanded operations of a significantly larger and more complex combined business.business, or difficulties in implementing our strategies, including the Resolute Operating System, at the acquired businesses.
Our information technology (“IT”) infrastructure’s ability to reliably and securely protect the sensitive confidential information of our customers, which include large financial institutions, is critical to our business. Security breaches have become more common across many industries. Cyber incidents have been increasing in sophisticationsophistication, including through the use of novel tools and strategies such as those that leverage AI, and can include third parties gaining access to employee or customer data using stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks, ransomware, card skimming code, and other deliberate attacks and attempts to gain unauthorized access. The occurrence of these types of incidents in our computer networks, databases or facilities could lead to the inappropriate use or disclosure of personal information, including sensitive personal information of customers and employees, which could harm our business and reputation, adversely affect consumers’ confidence in our business and products, result in inquiries and fines or penalties from regulatory or governmental authorities, cause a loss of customers, pose increased risks of lawsuits and subject us to potential financial losses.
We have administrative, technical, and physical security measures in place, and we have policies and procedures in place to both evaluate the security protocols and practices of our vendors and to contractually require service providers to whom we disclose data to implement and maintain reasonable privacy and security measures. However, although cybersecurity remains a high priority, our activities and investment may not sufficiently protect our system or network against cyber threats, nor sufficiently prevent or limit the damage from any future security breaches. As our businesses expand and these threats continue to evolve, we may be required to expend significant capital and other resources to protect against these security breaches or to alleviate problems caused by these breaches, including costs to deploy additional personnel and protection technologies, integrate cybersecurity programs and systems across businesses, train employees, and engage third-party experts and consultants, which could materially and adversely affect our business, financial condition and results of operations. AlthoughThese threats continue to increase as the frequency, intensity and sophistication of attempted attacks and intrusions increase around the world. In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe. For example, in March 2023, the Husky business experienced a cybersecurity incident involving unauthorized access to certain systems and the exfiltration of certain data. Following the incident, the Husky business undertook response and remediation actions, including engaging external advisors, investigating the incident, restoring affected systems, and enhancing security controls. In connection with the incident, the Husky business made a payment to the threat actor. Extortion payments may alleviate the negative impact of a ransomware attack, but we maintain cyber liability insurance, we cannotmay be certainunwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting payments, and there is always a risk that ourthe coveragethreat actor will benot adequateadhere forto liabilitiesnegotiated actually incurredterms or that insurancethreat actors will continueinitiate toother beattacks. availableAny tocybersecurity us on economically reasonable terms,incidents, or atabuse all.or Furthermore, any material breachmisuse of our securityinternal systemsplatform controls and system tools, even if inadvertent, could result in potential legal liability and reputational damage to both the customers of our businesses and us, which could significantly and adversely harm our competitivebusiness position,and resultreputation. In addition, if it becomes necessary for our businesses to further restrict the availability or use of platform controls and system tools by employees in aresponse lossto any abuse or misuse, the ability of customerour trustbusinesses to deliver high-quality and confidence,timely andcustomer cause us to incur significant costs to mitigate or remedy any damage resulting from system or network disruptions, whether caused by cyberattacks, security breaches or otherwise, whichsupport could ultimatelybe adversely affect our business, financial condition and results of operations.impaired.
Although we maintain cyber liability insurance, this insurance may be subject to limitations, exclusions, deductibles or coverage disputes, and we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Furthermore, any material breach of our security systems could result in material adverse consequences, including operational disruptions, loss or unauthorized disclosure of sensitive or confidential information, harm to our competitive position, result in a loss of customer trust and confidence, result in reputational harm, lead to litigation, regulatory inquiries or enforcement actions, and cause us to incur significant costs to mitigate or remedy any damage resulting from system or network disruptions, whether caused by cyberattacks, security breaches or otherwise, which could ultimately adversely affect our business, financial condition and results of operations.
SystemRisks associated with our technology systems, including system outages, data loss or other interruptions affecting our operationsothers, could adversely affect our business and reputation.
Additionally, new technologies, such as the use of AI and machine learning, present evolving and significant legal and operational risks for us and our third-party vendors. We have begun to use AI and machine learning technologies, including those licensed from third parties, in our processes and technologies. Our ability to continue to use such technologies at the scale necessary may depend on our ability to increase our investments in such technologies, and on our access to specific third-party software and infrastructure, some of which may not be available on terms we find commercially acceptable or at all. The availability of these tools is also subject to disruption, outages and vulnerabilities, and our use of these tools may subject us to additional risks, including misuse, information loss, reputational harm, intellectual property risks, and others. There can be no assurance that the usage of AI will enhance our strategies or initiatives, or enhance our products or services.
Our patents, trade secrets and other intellectual property rights are critical to our business. Our ability to safeguard our proprietary product designs and production processes against misappropriation by third parties is necessary to maintain our competitive position within our industry. Therefore, we routinely enter into confidentiality agreements with our employees, consultants and strategic partners to limit access to, and distribution of, our proprietary information in an effort to safeguard our proprietary rights and trade secrets. However, such efforts may not adequately protect our intellectual property against infringement and misappropriation by unauthorized third parties. Such third parties could interfere with our relationships with customers if successful in attempts to misappropriate our proprietary information or copy our products designs, or portions thereof. Additionally, because some of our customers purchase products on a purchase order basis and not pursuant to a detailed written contract, where we do not have the benefit of written protections with respect to certain intellectual property terms beyond standard terms and conditions, we may be exposed to potential infringement of our intellectual property rights. Enforcing our intellectual property rights against unauthorized use may be expensive and cause us to incur significant costs, all of which could adversely affect our business, financial condition and results of operations. There is no assurance that our existing or future patents will not be challenged, invalidated or otherwise circumvented. The patents and intellectual property rights we obtain, including our intellectual property rights which are formally registered in the United States and abroad, may be insufficient to provide meaningful protection or commercial advantage. Moreover, we may have difficulty obtaining additional patents and other intellectual property protections in the future. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which we provide our products or services. Any of the foregoing factors may have a material adverse effect on our business.
Companies in the industries in which we operate have commenced litigation to properly protect their intellectual property rights. Any proceedings or litigation that we initiate to enforce our intellectual property rights, or any intellectual property litigation asserted against us, could be costly and divert the attention of managerial and other personnel and further, could result in an adverse judgment or other determination that could preclude us from enforcing our intellectual property rights or offering some of our products to our customers. Royalty or other payments arising in settlements could negatively impact our profit margins and financial results. If we are unable to successfully defend against claims that we have infringed the intellectual property rights of others, we may need to indemnify some customers and strategic partners related to allegations that our products infringe the intellectual property rights of others. Additionally, some of our customers, suppliers and licensors may not be obligated to indemnify us for the full costs and expenses of defending against infringement claims. We may also be required to defend against alleged infringement of the intellectual property rights of third parties because our products contain technologies properly sourced from suppliers or customers. We may be unable to determine in a timely manner or at all whether such intellectual property use infringes the rights of third parties. Any such litigation or other proceedings could adversely affect our business, financial condition and results of operations.
A portion of the raw materials used by our businesses to manufacture the products they produce are obtained, directly or indirectly, from companies located outside of the United States. There is currently significant uncertainty about the future relationship between the U.S. and various other countries with respect to trade policies and tariffs. Recently, tariffs have been imposed on imports from certain countries outside of the United States. For example, the Trump administration has instituted substantial changes to U.S. foreign trade policy with respect to China and other countries, including a significant increase in tariffs on goods imported into the U.S., and has signaled possibly imposing further restrictions on international trade. As a result, further trade restrictions and/or tariffs may be forthcoming. Certain international trade agreements may also be at risk, as the current U.S. administration has voiced some opposition in respect thereof. These factors may stagnate the economy, impact relationships with and access to suppliers, increase the costs of certain raw materials we purchase, and/or materially and adversely affect our business, financial condition and results of operations. These and future tariffs, as well as any other global trade developments, bring with them uncertainty. We cannot predict future changes to imports covered by tariffs or which countries will be included or excluded from such tariffs. The reactions of other countries and resulting actions on the United States and similarly situated companies could negatively impact our business, financial condition and results of operations.
Our accounting is complex, and if it is erroneous or based on assumptions that change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and also to apply many complex requirements and standards, some of which require significant judgment. We devote substantial resources to compliance with accounting requirements and we base our estimates on our best judgment, historical experience, information derived from third parties, and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources. However, various factors cause our accounting to become complex, including the management of our businesses by Resolute Holdings. Our operating results may be adversely affected if we make accounting errors or our judgments prove to be wrong, assumptions change or actual circumstances differ from those in our assumptions, or if we are required to make changes in the presentation of our financial statements due to the foregoing factors or otherwise, which could cause our operating results to fall below the expectations of securities analysts and investors or guidance we may have provided, resulting in a decline in our stock price and potential legal claims.
Management's Discussion & Analysis (MD&A)
New heading “Economic Conditions”
New heading “Year Ended December 31, 2025 Compared with Year Ended December 31, 2024”
New heading “(Loss) Income from Operations and Operating Margin”
New heading “Other Expenses, Net”
New heading “Earnings in Equity Method Investment”
New heading “Income Tax Expense”
New heading “(4) Husky Transaction costs for the year ended December 31, 2025 primarily include advisory, legal and other professional fees incurred in connection with the Husky business combination.”
New heading “(5) Tungsten Transactions costs for the year ended December 31, 2024 represent deal‑related expenses incurred in connection with the Tungsten Transactions completed on September 17, 2024.”
New heading “(6) Spin-Off costs for the years ended December 31, 2025 and December 31, 2024 represent deal‑related expenses incurred in connection with the Spin-Off completed on February 28, 2025.”
New heading “Net Cash (Used in) Provided by Operations”
New heading “Net Cash Used in Investing Activities”
New heading “Net Cash Provided by (Used in) Financing Activities”
New heading “(1)Includes principal only.”
New heading “(3)The Company is obligated to make payments under the tax receivable agreement to holders of interests in Holdings. See Notes 2 and 14 to the Consolidated Financial Statements.”
New heading “Outlook Following the Husky Transaction”
New heading “Change to Equity Method Accounting Presentation for Holdings”
Removed heading “Economic Conditions - globally and in the digital asset marketplace”
Removed heading “Year Ended December 31, 2023 Compared with Year Ended December 31, 2022”
Removed heading “Income from Operations and Operating Margin”
Removed heading “Other (Expenses) Income, Net”
Removed heading “Net Cash Provided by Operations”
Removed heading “Net Cash Used in Investing”
Removed heading “Net Cash Used in Financing”
Removed heading “(1)Includes principal only. See Note 6 to the Consolidated Financial Statements.”
Removed heading “(2)See Note 7 to the Consolidated Financial Statements.”
Removed heading “(3)The Company is obligated to make payments under the tax receivable agreement to holders of interests in Holdings. See Note 2 and 15 to the Consolidated Financial Statements.”
Largest changes
see in full comparisonU.S.Economic tensions and changes in internationalmarkets,trade policies, including new tariffs introduced by U.S. last year could impact the market for our products andparticularlyservices. In particular, a portion of therapidlyrawevolvingmaterialsdigitalusedassetsbyindustry,us to manufacture our products areexperiencingobtained,uncertaindirectlyandorvolatileindirectly,economicfromconditions,companiesincludinglocated outside of thewarUnitedin Ukraine, the ongoing conflict in Israel, Gaza and the surrounding areas, sustained inflation, threats or concerns of recession, and supply chain disruptions. These conditions make it extremely difficult for us and our suppliers to accurately forecast and plan future business activities.States. Additionally, a significant downturn in the domestic or global economy may cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. If these uncertain business, macroeconomic or political conditions continue or further decline, our business, financial condition and results of operations could be materially adversely affected.
“In connection with the closing of the Husky Transaction, the Company repaid in full all outstanding obligations under Holdings' existing credit facility and terminated all related commitments. No early termination penalties or prepayment premiums were incurred in connection with the payoff. This repayment represents the removal of our prior revolving and term loan structure and the associated interest expense, covenants, and liquidity considerations that were in place as of December 31, 2025. Additional information is included in Note 19 of the Consolidated Financial Statements.”see in full comparison
“The 2024 Credit Facility contains customary covenants, including among other things, certain restrictions or limitations on indebtedness, issuance of liens, investments, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of the Company’s assets, and affiliate transactions. …”see in full comparison
“Interest expense for the year ended December 31, 2023 increased $1.6 million, or 7%, to $24.2 million compared to $22.5 million for the year ended December 31, 2022. An interest rate swap which the Company entered in January 2022 provided a benefit of $4.9 million for the year ended December 31, 2023. See Liquidity and Capital Resources below for more detail on the existing credit facility. There was an overall increase in other expenses due to the reduction in favorable changes to the fair value of mark-to-market instruments compared to December 31, 2022. …”see in full comparison
“(5) Tungsten Transactions costs for the year ended December 31, 2024 represent deal‑related expenses incurred in connection with the Tungsten Transactions completed on September 17, 2024.”see in full comparison
“(4) Husky Transaction costs for the year ended December 31, 2025 primarily include advisory, legal and other professional fees incurred in connection with the Husky business combination.”see in full comparison
Full comparison: every changed paragraph (147)
GPGI, through its wholly owned subsidiary, Holdings, is a platform designed to acquire, operate, and scale high‑quality businesses across attractive end markets, consistent with its philosophy of building great positions in good industries.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company's audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Beginning February 28, 2025, the Company deconsolidated Holdings as a result of the Spin‑Off and the related CompoSecure Management Agreement. From that date, Holdings is accounted for under the equity method. Unless expressly stated, references to operating results, customers, products, debt and market risks pertain to Holdings; the Company’s results primarily reflect corporate‑level items (e.g., public company costs, fair‑value changes, taxes) and equity in earnings of Holdings. The discussion below does not reflect the results of operations of Husky, as the Husky Transaction was completed after the completion of the Company’s 2025 fiscal year.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company's audited consolidated financial statements and related notes included elsewhere in this annual report on Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere particularly in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this annual report on Form 10-K.
Prior to the Husky Transaction, the Company’s business consisted solely of the CompoSecure operations conducted through its wholly owned subsidiary, Holdings. The CompanyCompany, together with Holdings, and its operating subsidiaries, creates innovative, highly differentiated and customized financial payment card products for banks and other payment card issuers to support and increase their customer acquisition, customer retention and organic customer spend. The Company’s customers consist primarily of leading international and domestic banks and other payment card issuers primarily within the United States (“U.S.”), with additional direct and indirect customers in Europe, Asia, Latin America, Canada, and the Middle East. The Company is a platform for next generation payment technology, security, and authentication solutions. The Company maintains trusted, highly-embedded and long-term customer relationships with an expanding set of global issuers. The Company has established a niche position in the financial payment card market through over 20 years of innovation and experience and is focused primarily on this attractive subsector of the financial technology market. The Company serves a diverse set of direct customers and indirect customers, including some of the largest issuers of credit cards in the U.S.
On September 27, 2024, Resolute Holdings was created as a wholly owned subsidiary of Holdings. On February 28, 2025, the Company completed the previously-announced spin-off (the "Spin-Off") of Resolute Holdings. In connection with the Spin-Off, Holdings entered into the CompoSecure Management Agreement, pursuant to which Resolute Holdings provides management and other related services to Holdings in exchange for payment of quarterly management fees based on 2.5% of Holdings last twelve-months' Adjusted EBITDA as defined in the CompoSecure Management Agreement, measured for the period ending on the fiscal quarter then ended (“CompoSecure Management Agreement Adjusted EBITDA”). CompoSecure Management Agreement Adjusted EBITDA reflects (a) Holdings’ earnings before interest, taxes, depreciation, depletion and amortization, extraordinary losses and expenses, one-time and non-recurring expenses, and the CompoSecure Management Fee, less (b) GPGI’s selling, general and administrative expenses, adjusted for the same items above (“Parent Allocated Expense”, as defined in the CompoSecure Management Agreement). Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of Holdings other than those expenses related to Resolute Holdings or its affiliates personnel who provide services to Holdings under the CompoSecure Management Agreement. Resolute Holdings determines, in its sole and absolute discretion, whether a cost or expense will be borne by Resolute Holdings or by Holdings. The Spin-Off of Resolute Holdings from the Company was achieved through the distribution of all outstanding shares of common stock, par value $0.0001 per share, of Resolute Holdings (the "Resolute Holdings Common Stock"), on a pro rata basis, to holders of record of the Company’s Class A Common Stock, par value $0.0001 per share (the “Common Stock”). Each holder of record of Common Stock received one share of Resolute Holdings Common Stock for every twelve shares of Common Stock held on February 20, 2025, the record date for the Spin-Off. In lieu of fractional shares of Resolute Holdings Common Stock, holders of Common Stock received cash. The distribution of shares of Resolute Holdings Common Stock in connection with the Spin‑Off was treated as a taxable dividend to the Company’s stockholders for U.S. federal income tax purposes.
The distribution of shares of Resolute Holdings Common Stock in connection with the Spin-Off constituted an Extraordinary Dividend as defined in the agreement governing the Company's previously outstanding warrants (the "warrant agreement"). As a result, the warrant price was decreased from $11.50 per share of Common Stock to $7.97 per share of Common Stock, and the redemption trigger price was decreased from $18.00 per share of Common Stock to $14.47 per share of Common Stock, effective as of February 28, 2025. On November 3, 2025, the Company issued a Notice of Redemption for all outstanding public warrants, resulting in substantially all then-outstanding warrants being exercised before the December 3, 2025 redemption date, with the remaining warrants redeemed for $0.01 per warrant. Accordingly, no warrants remained outstanding or subject to remeasurement as of December 31, 2025.
Historically, the Company operated and controlled the business and affairs of Holdings by virtue of its control of the board of managers of Holdings, and thus the financial results of Holdings were consolidated into the financial statements of the Company. As of and subsequent to the Spin-Off, and as a result of the execution of the CompoSecure Management Agreement, control of Holdings transferred to Resolute Holdings and the Company no longer consolidates Holdings. For periods subsequent to the completion of the Spin-Off, Holdings is treated as a variable interest entity and the results of operations of Holdings and its subsidiaries are no longer consolidated in the financial statements of the Company; rather, such results are consolidated in the financial statements of Resolute Holdings, and the Company accounts for the results of Holdings and its subsidiaries (including the CompoSecure and Husky businesses) using the equity method of accounting, with the Company’s statement of operations reflecting the Company’s share of earnings of Holdings as earnings from an equity method investment, and the Company’s consolidated balance sheets reflect its carrying value in Holdings as an equity method investment.
On June 11, 2024, the Company paid a special cash dividend to Class A shareholders of CompoSecure, Inc., and made a corresponding distribution to Class B unitholders of Holdings. As a result of the special cash dividend and distribution, the conversion price of the Exchangeable Notes was adjusted to $10.98 per share, which resulted in an adjustment to the exchange rate to 91.0972 shares of the Company’s Class A Common Stock per $1,000 principal amount of notes exchanged.
On August 7, 2024, all of the holders of Class B Common Stock of the Company and Resolute entered into stock purchase agreements, pursuant to which the selling stockholders would exchange their 51,908,422 Class B units (and corresponding shares of Class B Common Stock) for shares of Class A Common Stock, eliminating the Company's existing dual-share class structure. On September 17, 2024, the Resolute Transaction closed and Resolute became the majority owner of the Company by acquiring 49,290,409 shares of Class A Common Stock of the Company for an aggregate purchase price of approximately $372.1 million, or $7.55 per share, representing an approximately 60% voting interest, and, as of February 28, 2025, Resolute owned approximately 51% of the voting interest in the Company's Class A Common Stock. The Company was not party to the stock purchase agreements. Prior to these transactions, holders of Class B Common Stock held Class B units in Holdings. Subsequent to the Resolute Transaction, the Company owned 100% of Holdings. As a result of the Resolute Transaction, the Company no longer has shares of Class B Common Stock outstanding or a non-controlling interest as of December 31, 2024. The Company's tax receivable agreement liability and future payments thereunder increased as the Company realized an increase in tax basis of Holdings’ assets resulting from the exchange of Holdings' equity by unitholders in connection with the Resolute Transaction.
Effective September 19, 2024, Resolute’s acquisition of a majority of the Company’s Class A Common Stock caused a "Fundamental Change" as defined in the Indenture to the Exchangeable Notes (the "Indenture"). Triggering the Fundamental Change provision provided holders of the Exchangeable Notes a choice to: (1) exchange their Exchangeable Notes for shares of Class A Common Stock at a temporarily increased exchange rate of 104.5199 shares per $1,000 principal amount of Exchangeable Notes until November 27, 2024 (with the exchange rate then reverting to the existing 91.0972 shares per $1,000 principal amount of Exchangeable Notes). This temporary increase in the exchange rate resulted in an adjustment of the conversion price to $9.57 per share from September 19, 2024 to November 29, 2024. (2) have the Company repurchase for cash of all of such holder’s Exchangeable Notes on November 29, 2024 at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes to be repurchased plus accrued and unpaid interest; or (3) continue to hold the Exchangeable Notes. A notice was sent to all holders of Exchangeable Notes on October 9, 2024 providing details of these choices. Through December 31, 2024, an aggregate of $130.0 million of the Exchangeable Notes had been surrendered and exchanged for an aggregate of 13,587,565 newly-issued shares of Class A Common Stock. As of December 31, 2024 all of the Exchangeable Notes were exchanged into shares of Class A Common Stock.
On August 7, 2024, the Company entered into a Fourth Amended and Restated Credit Agreement with J.P. Morgan Change ("JPMC") and the lenders party thereto to refinance its senior secured indebtedness, which increased the maximum borrowing capacity of the credit facility to $330.0 million comprising of a term loan of $200.0 million and a revolving credit facility of $130.0 million. The senior credit facility is set to mature on August 7, 2029.
During the year ended December 31, 2024, the trading price of the Company's Class A Common Stock increased from $5.22 on January 2, 2024 to $15.33 on December 31, 2024. The increase in the stock price was a primary driver of changes in the fair value of the Company's aggregate earnout consideration liability and warrant liability of $171.8 million, which had a material effect on the Company's operating results included in this report.
As a result of the Business Combination discussed in Note 1 to the Company's audited consolidated financial statements, certainCertain of Holdings' former equity holders havehad the right to receive an aggregate of up to7,500,000 additional shares of the Company's Class A Common Stock in earnout consideration (See Note 18 in Notes to Consolidated Financial Statements in this Form 10-K for further discussion) (the "Earnout Shares") basedin onearnout the achievement of certain stock price thresholdsconsideration (collectively, the “Earnouts”). The Earnouts arewere subject to two stock price thresholds, with half of the Earnout Shares awarded upon the achievement of each threshold. As described elsewhere in this report, theThe first Earnout threshold was achieved,achieved on December 17, 2024, and approximately 3,600,0003.8 million Earnout Shares were issuedissued. The second Earnout threshold was achieved on DecemberSeptember 17,8, 20242025, (thisand representsapproximately one-half4.4 of the then-issuable7,500,000 shares of Class A Common Stock net of tax withholding for employee recipients). Holdings' equity holders will receive the balance of themillion Earnout Shares if(as adjusted for the applicableSpin-Off) volume-weightedwere average price per share threshold is met prior to December 26, 2025.issued.
On September 18, 2025, the Company transferred its listing from The Nasdaq Stock Market, LLC (“Nasdaq”) to the New York Stock Exchange (the “NYSE”).
On January 12, 2026, the Company, through Holdings, completed the Husky Transaction. In connection with the completion of the Husky Transaction, Husky entered into a management agreement (the "Husky Management Agreement") with Resolute Holdings, the terms of which are substantially identical to the terms of the CompoSecure Management Agreement. Under the Husky Management Agreement, Resolute Holdings provides ongoing management and operational oversight and is entitled to a quarterly management fee equal to 2.5% of the trailing twelve‑month Adjusted EBITDA as defined in the Husky Management Agreement of the Husky business, without duplication of any amounts payable under the CompoSecure Management Agreement. Consistent with the CompoSecure Management Agreement, the Husky Management Agreement includes an initial 10‑year term with automatic 10‑year renewal periods, reflecting the long‑term operating partnership established at closing.
Following the completion of the Husky Transaction, CompoSecure, Inc. rebranded to GPGI, Inc., and CompoSecure Holdings, L.L.C. rebranded to GPGI, Holdings, L.L.C. Beginning January 23, 2026, the Company’s common stock continued trading on the New York Stock Exchange, under the new ticker symbol “GPGI.”
On January 14, 2026, following completion of the Husky Transaction, Holdings refinanced approximately $2.1 billion of total indebtedness that was assumed in the Husky Transaction. The refinancing included the issuance of $900 million of 5.625% senior secured notes due 2033, the establishment of a new $1.2 billion term loan facility maturing in 2033, and $400 million of revolving credit commitments maturing in 2031. The proceeds from these new debt instruments were used to refinance Husky’s existing indebtedness and to pay related fees, costs, premiums, and expenses incurred in connection with the recapitalization of the combined company’s capital structure.
Economic Conditions
On February 28, 2025, the Company completed the Spin-Off of Resolute Holdings. The distribution of all shares of Resolute Holdings Common Stock to holders of the Company’s Class A Common Stock as a pro rata dividend occurred on February 28, 2025 and Resolute Holdings Common Stock began trading on Nasdaq on February 28, 2025 under the ticker “RHLD.” Holders of the Company's Class A Common Stock received one (1) share of Resolute Holdings Common Stock for every twelve (12) shares of Class A Common Stock held on February 20, 2025, the record date for the distribution. The distribution of shares of Resolute Holdings will give rise to a taxable gain to the Company and will be treated as a taxable dividend to all existing stockholders of the Company for U.S. federal and applicable state and local tax purposes. Investors should note that Resolute Holdings Management, Inc. is a distinct entity from Resolute Compo Holdings LLC, which acquired CompoSecure shares in September 2024, as described above.
In connection with the Spin-Off, Resolute Holdings and CompoSecure Holdings L.L.C., a wholly-owned subsidiary of the Company ("Holdings"), entered into a management agreement (the "Management Agreement") on the Distribution Date, pursuant to which Resolute Holdings is responsible for, among other things: establishing and monitoring Holdings’ objectives, financing activities and operating performance; selecting and overseeing Holdings’ management team and their operating performance; devising capital allocation strategies, plans and policies of Holdings; identifying, analyzing and overseeing the consummation of business opportunities and potential acquisitions, dispositions and other business transactions; and reviewing and approving Holdings’ compensation and benefit plans, programs, policies and agreements.
Holdings is required to pay Resolute Holdings a quarterly management fee equal to 2.5% of Holdings' last 12 months' Adjusted EBITDA, as defined in the Management Agreement. Holdings is also required to reimburse Resolute Holdings and its affiliates for their documented costs and expenses incurred on behalf of Holdings other than those expenses related to Resolute Holdings' or their affiliates' personnel who provide services to Holdings under the Management Agreement. The Management Agreement has an initial term of 10 years and shall automatically renew for successive ten-year terms unless terminated in accordance with its terms. Each of Holdings and Resolute Holdings may terminate the Management Agreement upon the occurrence of certain other limited events, and in connection with certain of these limited events, Resolute Holdings has the right to require us to pay a termination fee, which could be significant and may be paid in cash, shares of common stock or a combination of cash and stock. See “Business — Recent Developments.”
Economic Conditions - globally and in the digital asset marketplace
U.S.Economic tensions and changes in international markets,trade policies, including new tariffs introduced by U.S. last year could impact the market for our products and particularlyservices. In particular, a portion of the rapidlyraw evolvingmaterials digitalused assetsby industry,us to manufacture our products are experiencingobtained, uncertaindirectly andor volatileindirectly, economicfrom conditions,companies includinglocated outside of the warUnited in Ukraine, the ongoing conflict in Israel, Gaza and the surrounding areas, sustained inflation, threats or concerns of recession, and supply chain disruptions. These conditions make it extremely difficult for us and our suppliers to accurately forecast and plan future business activities.States. Additionally, a significant downturn in the domestic or global economy may cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. If these uncertain business, macroeconomic or political conditions continue or further decline, our business, financial condition and results of operations could be materially adversely affected.
The Company’s Arculus platform offers a broad range of secure authentication and digital asset storage solutions and enables our consumer Arculus Cold Storage Wallet for digital assets. We believe consumers can achieve enhanced protection by controlling their private keys with a cold storage wallet, such as the Arculus Cold Storage Wallet. At the same time, this market cycle has created uncertainty in timing for our anticipated Arculus ramp up, as some of our partners and targets have been impacted. Therefore, we have been taking a measured approach to better target the timing of our investments to support near-term and long-term opportunities.
Overview
Following the Spin‑Off on February 28, 2025, the Company no longer consolidates Holdings and instead accounts for its investment in Holdings under the equity method. The components of results of operations presented below primarily relate to the operations of Holdings prior to the Spin-Off, when the Company consolidated Holdings' operating results. The Husky Transaction closed on January 12, 2026, and therefore is not included in the results of operation for the year ended December 31, 2025.
Subsequent to the Spin-Off, the Company's activities have been limited to non-revenue generating functions such as its stock market listing, compliance with public company reporting obligations, obligations under the tax receivable agreement and income recognized from equity method investment.
Net Sales
Other Expense,Expenses, net
Year Ended December 31, 2025 Compared with Year Ended December 31, 2024
Net Sales
The Company’s net sales for the year ended December 31, 2025 decreased by $360.7 million, or 86%, to $59.8 million compared to $420.6 million for the year ended December 31, 2024. The decrease was driven by the deconsolidation of Holdings on February 28, 2025. Holdings generated $402.2 million of net sales during the period from February 28, 2025 to December 31, 2025, and is reflected within earnings from equity method investment rather than net sales following deconsolidation.
Domestic: The Company’s domestic net sales for the year ended December 31, 2025 decreased $289.0 million, or 84%, to $54.5 million compared to $343.5 million for the year ended December 31, 2024. Holdings generated $345.2 million of domestic net sales during the period from February 28, 2025 to December 31, 2025.
International: The Company’s international net sales for the year ended December 31, 2025 decreased $71.8 million, or 93%, to $5.3 million compared to $77.1 million for the year ended December 31, 2024. The international customer base is comprised of a larger population of smaller customers relative to the domestic customer base. Holdings generated $57.1 million of international net sales during the period from February 28, 2025 to December 31, 2025.
The Company’s gross profit for the year ended December 31, 2025 decreased $190.5 million, or 87%, to $28.7 million compared to $219.2 million for the year ended December 31, 2024, while the gross profit margin decreased from 52% to 48%. The decrease in gross profit was primarily driven by the deconsolidation of Holdings.
The Company’s operating expenses for the year ended December 31, 2025 decreased $69.1 million, or 62%, to $42.5 million compared to $111.6 million for the year ended December 31, 2024. The decrease was driven primarily by the deconsolidation of Holdings.
(Loss) Income from Operations and Operating Margin
During the year ended December 31, 2025, the Company had a loss from operations of $13.7 million compared to income from operations of $107.6 million for the year ended December 31, 2024. The Company’s operating margin for the year ended December 31, 2025 decreased to (23%) compared to 26% for the year ended December 31, 2024. The decrease in income from operations and operating margin was driven primarily by the deconsolidation of Holdings.
Other Expenses, Net
Other expenses for the year ended December 31, 2025 increased $23.5 million, or 12%, to $212.1 million compared to $188.6 million for the year ended December 31, 2024. The increase in other expenses was primarily due to changes in the fair value of earnout consideration liability and warrant liability resulting in non-cash expenses of $208.1 million for the year ended December 31, 2025, compared to $171.8 million in the year ended December 31, 2024. The increase was partially offset by a decrease in net interest expense of $15.1 million resulting from the conversion of all of the Company's previously-outstanding exchangeable notes (the "Exchangeable Notes") into shares of Common Stock during the fourth quarter of 2024 and the deconsolidation of Holdings. As a result of the deconsolidation, all interest on Holdings debt is reflected within earnings in equity method investment.
Earnings in Equity Method Investment
Beginning February 28, 2025, the Company recognizes its share of Holdings’ net income within “Earnings in equity method investment,” which totaled $128.8 million for 2025. The equity method investment resulted from the deconsolidation associated with the Spin-Off and related CompoSecure Management Agreement. Refer to Note 6 in the consolidated financial statements for the results of our equity method investment.
Income Tax Expense
The Company's income tax expense for the year ended December 31, 2025 was $39.0 million, compared to $2.2 million for the year ended December 31, 2024. The increase in tax expense was primarily related to the Company being subject to tax on 100% of Holdings’ taxable income following the Tungsten Transactions, along with a taxable gain on appreciated property resulting from the Spin-Off.
Net Sales
The Company’s net sales for the year ended December 31, 2024 increased by $29.9 million, or 8%, to $420.6 million compared to $390.6 million for the year ended December 31, 2023. The increase was driven by continued domestic growth in the Company’sCompoSecure business’ premium payment card business, which was up 7%, and international sales, which were up 11%.
Domestic: The Company’s domestic net sales for the year ended December 31, 2024 increased $22.0 million, or 7%, to $343.5 million compared to $321.5 million for the year ended December 31, 2023. The increase was primarily due to higheradded customer acquisitionaccounts by existing customers of the Company’sCompoSecure clientsbusiness as they continued to experience higher demand.
International: The Company’s international net sales for the year ended December 31, 2024 increased $7.9 million, or 11%, to $77.1 million compared to $69.2 million for the year ended December 31, 2023. The international customer base of the CompoSecure business is comprised of a larger population of smaller customers relative to theits domestic customer base. There were increased sales across the customer base driving growth in net sales during 2024.
In addition, the following table presents the Company’s net sales for the three months ended December 31, 2024 compared to December 31, 2023:
The Company’s net sales for the three months ended December 31, 2024 increased $1.0 million, or 1%, to $100.9 million compared to $99.9 million for the three months ended December 31, 2023.
The Company’s gross profit for the year ended December 31, 2024 increased $10.1 million, or 5%, to $219.2 million compared to $209.1 million for the year ended December 31, 2023, while the gross profit margin decreased from 54% to 52%. The decrease in gross margin was partially driven by initial production of new and innovative card constructions,constructions in the CompoSecure business, which resulted in lower production efficiencies, and the impact of inflationary pressure on wages and materials for the year ended December 31, 2024.
The Company’s operating expenses for the year ended December 31, 2024 increased $21.6 million, or 24%, to $111.6 million compared to $90.0 million for the year ended December 31, 2023. The increase was driven primarily by an increase in professional fees of $10.4 million associated with the ResoluteTungsten TransactionTransactions and Spin-Off, stock-based compensation of $3.7 million, salaries and employee benefits of $3.2 million, bonus expenses of $3.3 million, computer software supplies of $0.8 million and various other costs of $1.4 million. These increases were partially offset by decreases in commission expenses of $0.6 million and reductions in marketing expenses of $0.6 million.
Other (Expenses),Expenses, Net
Other expenses for the year ended December 31, 2024 increased $186.6 million, or 9,278%, to $188.6 million compared to $2.0 million for the year ended December 31, 2023. The increase in other expenses was primarily due to changes in the fair value of earnout consideration liability, warrant liability and make-whole liability resulting in non-cash expenses of $171.8 million for the year ended December 31, 2024, compared to income of $22.1 million in the year ended December 31, 2023, resulting in an increase in operating expense of $194.0 million. The increase in expense related to the changes in fair value was offset by lower interest expense resulting from principal payments made on the outstanding term loan and the conversion of all outstanding Exchangeable Notes into shares of Class A Common Stock resulting in reduced interest expense on the Exchangeable Notes.
The Company's income tax expense for the year ended December 31, 2024 was $2.2 million, compared to $4.6 million for the year ended December 31, 2023. The decrease in income tax expense was attributable to the valuation of non-cash items and the elimination of the Company's Up-C structure in connection with the Resolute Transaction during the third quarter of 2024.
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022
The Company’s net sales for the year ended December 31, 2023 increased by $12.2 million, or 3%, to $390.6 million compared to $378.5 million for the year ended December 31, 2022. The increase was primarily driven by continued domestic growth in the Company’s premium payment card business, which was up 9%. This was offset by lower international sales, which is a more variable market due to current global economic uncertainty, customer mix and a smaller sales base.
Domestic: The Company’s domestic net sales for the year ended December 31, 2023 increased $26.1 million, or 9%, to $321.5million compared to $295.4 million for the year ended December 31, 2022. The increase was primarily due to higher customer acquisition by the Company’s clients as they continued to experience higher demand.
International: The Company’s international net sales for the year ended December 31, 2023 decreased $13.9 million, or 17%,to $69.2 million compared to $83.1 million for the year ended December 31, 2022. This decrease was primarily due to current global economic uncertainty and international markets being a more variable market due to customer mix and a smaller sales base.
What changed in the latest 10-Q
Risk Factors
New heading “Prior Risk Factors Updated to Reflect Corporate Reincorporation”
New heading “Certain provisions in our articles of incorporation, bylaws and Nevada law may discourage takeovers and limit the power of our stockholders.”
New heading “Our articles of incorporation provide that certain courts in the State of Nevada or the federal district courts of the United States are the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.”
New heading “Our articles of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities that may prevent us from receiving the benefit of certain corporate opportunities.”
New heading “Our articles of incorporation include a jury trial waiver that could limit the ability of our stockholders to bring or demand a jury trial for internal actions.”
Largest changes
“Our articles of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of the State of Nevada, in Clark County, Nevada (the “Eighth Judicial District Court”) is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or controlling stockholder in such capacity to us or our stockholders, any action asserting a claim arising pursuant to NRS Title 7, our articles of …”see in full comparison
“Our articles of incorporation provide that certain courts in the State of Nevada or the federal district courts of the United States are the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.”see in full comparison
“Our articles of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities that may prevent us from receiving the benefit of certain corporate opportunities.”see in full comparison
“Our articles of incorporation include a jury trial waiver that could limit the ability of our stockholders to bring or demand a jury trial for internal actions.”see in full comparison
“Certain provisions in our articles of incorporation, bylaws and Nevada law may discourage takeovers and limit the power of our stockholders.”see in full comparison
Full comparison: every changed paragraph (21)
Prior Risk Factors Updated to Reflect Corporate Reincorporation
Certain provisions in our articles of incorporation, bylaws and Nevada law may discourage takeovers and limit the power of our stockholders.
Our articles of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our Company or changes in our management that our stockholders may deem advantageous. In particular, our articles of incorporation and bylaws:
•establish a classified board of directors so that not all members are elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors (our “Board”);
•permit our Board to establish the number of directors and fill any vacancies (including vacancies resulting from an expansion in the size of our Board);
•establish limitations on the removal of directors;
•authorize the issuance of “blank check” preferred stock that our Board could use to implement a stockholder rights plan;
•provide that our Board is expressly authorized to make, alter or repeal our bylaws;
•restrict the forum for certain litigation against us to Nevada;
•provide that stockholders may not act by written consent following the time when Resolute Compo Holdings LLC and Resolute ManCo Holdings LLC (either individually or collectively, and together with their respective affiliates and associates, and any other individual or entity that may be deemed for any purpose to be a beneficial owner or otherwise have or share beneficial ownership of any of the foregoing, and their respective successors and assigns (other than the Company and its subsidiaries), collectively, “Investor”) cease to beneficially own at least 40% of the shares of our outstanding common stock, which time we refer to as the “Trigger Date,” which would require stockholder action to be taken at an annual or special meeting of our stockholders;
•prohibit stockholders from calling special meetings following the Trigger Date, which would delay the ability of our stockholders to force consideration of a proposal or to take action, including with respect to the removal of directors; and
•establish advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Sections 78.411 to 78.444 of the Nevada Revised Statutes (as amended, the “NRS”), inclusive (collectively, the “Nevada Combinations Statutes”), impose a moratorium of up to four years on a combination of a resident domestic corporation, which is a Nevada corporation that has 200 or more stockholders of record, with an interested stockholder, unless the combination is approved in a prescribed manner. An interested stockholder is a beneficial owner of 10% or more of the voting power of the resident domestic corporation or an affiliate or associate thereof who at any time within the two previous years was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the resident domestic corporation. However, NRS 78.437 provides that the Nevada Combinations Statutes do not apply to an interested stockholder who, among other things, first became an interested stockholder on the date that the resident domestic corporation first became a resident domestic corporation solely as a result of the corporation becoming a resident domestic corporation. In connection with our reincorporation from Delaware to Nevada, our Board unanimously approved resolutions which provide that, to the fullest extent permitted by the Nevada Combinations Statutes, at such time, if any, that the Company becomes subject to the Nevada Combinations Statutes, the Nevada Combinations Statutes will not apply to Investor or restrict any combination with the Company in any way involving or relating to Investor.
Any provision of our articles of incorporation, our bylaws or Nevada law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock and could also affect the price that some investors are willing to pay for our common stock.
Our articles of incorporation provide that certain courts in the State of Nevada or the federal district courts of the United States are the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our articles of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of the State of Nevada, in Clark County, Nevada (the “Eighth Judicial District Court”) is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or controlling stockholder in such capacity to us or our stockholders, any action asserting a claim arising pursuant to NRS Title 7, our articles of incorporation or our bylaws, including any internal action (as defined in NRS 78.046) or any action asserting a claim governed by the internal affairs doctrine. However, if the Eighth Judicial District Court lacks jurisdiction over such action, the action may be brought in another court of the State of Nevada or, if no court of the State of Nevada has jurisdiction, then in the United States District Court for the District of Nevada. Additionally, our articles of incorporation states that the foregoing provision will not apply to claims arising under the Securities Act, the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction. Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”). The exclusive forum provisions will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provisions will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. There is, however, uncertainty as to whether a court would enforce the exclusive forum provisions, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and, to the fullest extent permitted by law, to have consented to the provisions of our articles of incorporation described above. The choice of forum provision may result in increased costs for investors to bring a claim. Further, the choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders, which may discourage such lawsuits against us and our directors, officers, other employees or stockholders. The enforceability of similar forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings in Delaware; however, Nevada law expressly permits the articles of incorporation or bylaws of a corporation, to the extent not inconsistent with any applicable jurisdictional requirements and the laws of the U.S., to include such provisions.
Our articles of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities that may prevent us from receiving the benefit of certain corporate opportunities.
Under our articles of incorporation, neither Investor nor any of its affiliates, officers, directors, employees, agents, stockholders, members or partners will have any duty to refrain from engaging, directly or indirectly, in the same business activities, similar business activities or lines of business in which we or our managed companies operate. In addition, our articles of incorporation provides that, to the fullest extent permitted by law, no officer or director of ours who is also an officer, director, employee, agent, stockholder, member, partner or affiliate of Investor or their respective affiliates, instead of to us, or does not communicate information regarding a corporate opportunity to us that the officer, director, employee, agent, stockholder, member, partner or affiliate has directed to Investor or their respective affiliates. For example, certain directors of our Company who also serve as an officer, director, employee, agent, stockholder, member, partner or affiliate of Investor or its affiliates may pursue certain acquisitions or other opportunities that may be complementary to our business or the businesses of GPGI Holdings, Husky Holdings or our other managed companies from time to time and, as a result, such acquisition or other opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations or prospects if attractive corporate opportunities are allocated by Investor to itself or its affiliates instead of to us.
Our articles of incorporation include a jury trial waiver that could limit the ability of our stockholders to bring or demand a jury trial for internal actions.
Our articles of incorporation provide that, to the fullest extent permitted by the NRS and not inconsistent with any applicable laws of the U.S., any and all internal actions to be tried in any court of the State of Nevada must be tried before the presiding judge as the trier of fact, and not before a jury. Our articles of incorporation further provide that this requirement operates as a waiver of the right of trial by jury by each party to any internal action to which such requirement applies. However, this requirement does not limit or otherwise affect our stockholders’ right to a jury trial in any action, suit or proceeding that is not an internal action. This waiver is expressly authorized by statute in an amendment to NRS 78.046 enacted in May 2025 pursuant to Assembly Bill No. 239 adopted by the Nevada legislature, but the enforceability of this waiver has not yet been adjudicated in a court of competent jurisdiction.
Management's Discussion & Analysis (MD&A)
New heading “Income (Loss) from Operations and Operating Margin”
New heading “Earnings (Losses) in Equity Method Investment”
New heading “Income Tax (Expense) Benefit”
New heading “Six Months Ended June 30, 2026 compared with Six Months Ended June 30, 2025”
New heading “Gross Profit and Gross Margin”
New heading “Operating Expenses”
New heading “Income (Loss) from Operations and Operating Margin”
New heading “Other Income (Expense), net”
New heading “Earnings (Losses) in Equity Method Investment”
New heading “Income Tax (Expense) Benefit”
New heading “Net Cash Provided by (Used in) Investing”
Removed heading “Recent Developments”
Removed heading “Earnings in Equity Method Investment”
Removed heading “Net Cash Used in Investing”
Largest changes
“of the United States, and disruptions arising from geopolitical conflicts or heightened tensions in the Middle East have in the past and could in the future further affect global supply chains, transportation routes, or input costs. Additionally, a significant downturn in the domestic or global economy has in the past and may in the future cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. …”see in full comparison
Economic tensions and changes in international trade policies, including new tariffs introduced by the U.S. last year, as well as ongoing geopolitical instability in certain regions, including the Middle East, have in the past impacted and could in the future impact the market for our products and services. In particular, a portion of the raw materials used by us to manufacture our products are obtained, directly or indirectly, from companies located outsidesee in full comparisonof the United States, and disruptions arising from geopolitical conflicts or heightened tensions in the Middle East have in the past and could in the future further affect global supply chains, transportation routes, or input costs. Additionally, a significant downturn in the domestic or global economy has in the past and may in the future cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. If these uncertain business, macroeconomic, trade, or political conditions continue or further deteriorate, our business, financial condition, and results of operations could be materially adversely affected.
“Six Months Ended June 30, 2026 compared with Six Months Ended June 30, 2025”see in full comparison
Full comparison: every changed paragraph (90)
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company's audited consolidated financial statements and related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC.SEC on March 12, 2026 (the "2025 Annual Report"). In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere particularly in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.10-Q, the 2025 Annual Report and the Company's other filings with the SEC.
Beginning February 28, 2025, the Company deconsolidated GPGI Holdings as a result of the spin‑off of Resolute Holdings Management, Inc. ("Resolute Holdings") (the "Spin-Off") and execution of the CompoSecure Management Agreement, as defined below. From that date, GPGI Holdings is accounted for under the equity method. Unless expressly stated, references to operating results, customers, products, debt and market risks pertain to GPGI Holdings; the Company’s results primarily reflect corporate‑level items (e.g., public company costs, transaction expenses, fair‑value changes, taxestaxes, etc.) and earnings in equity method investment of GPGI Holdings.
Prior to the Husky Transaction, as defined below, the Company’s business consisted solely of the CompoSecure operations conductedof throughCompoSecure, L.L.C. and its whollysubsidiaries owned(collectively, subsidiary, GPGI Holdings."CompoSecure"). CompoSecure, founded in 2000, and headquartered in Somerset, New Jersey,Jersey is the global leader in the design and manufacturing of premium metal payment cards and secure authentication solutions. The company pioneered the use of metal in payment cards dating back to 2003 and combines industry-leading innovation, advanced materials science, and proprietary manufacturing processes to deliver highly differentiated products to its customers. CompoSecure’s metal payment cards integrate a metal core with EMV® (acronym representing Europay, Mastercard, and Visa) chips, magnetic stripes, and contactless payment technology, while meeting stringent certification requirements from global payment networks. CompoSecure’s metal cards deliver a distinctive weight, a premium aesthetic, and enhanced durability for consumers, while its issuer customers benefit from the ability to attract higher-value consumers, reduce cardholder churn, and unlock higher customer spend relative to traditional plastic cards.
Husky Holdings LLC (together with its subsidiaries, "Husky"), a wholly owned subsidiary of GPGI Holdings, founded in 1953, and headquartered in Bolton, Ontario, Canada, is the leading global manufacturer of highly engineered injection molding equipment and aftermarket tooling and services. Husky has focused on developing highly technical precision technologies instrumental in the delivery of food, beverages, medical devices, and other applications including general packaging and closures, thinwall packaging, and consumer products. Husky delivers its integrated capabilities through a combination of systems, tooling, and aftermarket parts and services to create value for customers throughout the entire lifecycle of its solutions.
Recent Developments
On February 28, 2025, the Company completed the Spin-Off of Resolute Holdings. In connection with the Spin-Off, GPGI Holdings entered into a management agreement (the "CompoSecure Management Agreement"), pursuant to which Resolute Holdings provides management and other related services to GPGI Holdings in exchange for payment of quarterly management fees, payable in arrears, in a cash amount equal to 2.5% of GPGI Holdings' last twelve-months' Adjusted EBITDA as defined in the CompoSecure Management Agreement, measured for the period ending on the fiscal quarter then ended (“CompoSecure Management Agreement Adjusted EBITDA”). CompoSecure Management Agreement Adjusted EBITDA reflects (a) GPGI Holdings’ earnings before interest, taxes, depreciation, depletion and amortization, extraordinary losses and expenses, one-time and non-
interest, taxes, depreciation, depletion and amortization, extraordinary losses and expenses, one-time and non-recurringrecurring expenses, and the CompoSecure Management Fee, less (b) GPGI’s selling, general and administrative expenses, adjusted for the same items above (“Parent Allocated Expense” as defined in the CompoSecure Management Agreement). CompoSecure Management Agreement Adjusted EBITDA is calculated without duplication of Husky Management Agreement Adjusted EBITDA (as defined below) and its share of Parent Allocated Expense. GPGI Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of GPGI Holdings other than those expenses related to Resolute Holdings' or its affiliates' personnel who provide services to GPGI Holdings under the CompoSecure Management Agreement. Resolute Holdings determines, in its sole and absolute discretion, whether a cost or expense will be borne by Resolute Holdings or by GPGI Holdings.
On November 2, 2025, GPGI entered into a Share Purchase Agreement with entities affiliated with Platinum Equity, LLC (“Platinum Equity”) pursuant to which GPGI, through GPGI Holdings, would combine with Husky Technologies Limited for an enterprise value of approximately $4.976 financed with debt, cash, and shares of GPGI’s Class A Common Stock (“Husky Transaction”). On January 12, 2026, the Company completed the business combination ("Husky Transaction Date").
Certain of GPGI Holdings' former equity holders had the right, pursuant to the agreement and plan of merger that governed CompoSecure's initial business combination completed in December 2021, to receive additional shares of Class A common stock ("Earnout Shares") in earnout consideration (collectively, the “Earnouts”). The Earnouts were subject to two stock price thresholds, with half of the Earnout Shares awarded upon the achievement of each threshold. The first Earnout threshold was achieved on December 17, 2024, and approximately 3.8 million Earnout Shares were issued. The second Earnout threshold was achieved on September 8, 2025, and approximately 4.4 million Earnout Shares (as adjusted for the Spin-Off) were issued.
On November 2, 2025, GPGI entered into a Share Purchase Agreement with entities affiliated with Platinum Equity, LLC (“Platinum Equity”) pursuant to which GPGI, through GPGI Holdings, would combine with Husky Technologies Limited for an enterprise value of approximately $4.976 billion, financed with debt, cash, and share of GPGI’s Class A Common Stock (“Husky Transaction”). On the January 12, 2026, the Company completed the business combination ("Husky Transaction Date"). In connection with the completion of the Husky Transaction, Husky entered into a management agreement (the "Husky Management Agreement") with Resolute Holdings, the terms of which are substantially identical to the terms of the CompoSecure Management Agreement. Under the Husky Management Agreement, Resolute Holdings is responsible for managing the day-to-day business and operations, and overseeing the strategy of, Husky Holdings and its subsidiaries, and receives a quarterly management fee equal to 2.5% of the trailing twelve‑month Adjusted EBITDA as defined in the Husky Management Agreement of the Husky business ("Husky Management Agreement Adjusted EBITDA"), without duplication of any amounts payable under the CompoSecure Management Agreement. Consistent with the CompoSecure Management Agreement, the Husky Management Agreement includes an initial 10‑year term with automatic 10‑year renewal periods, reflecting the long‑term operating partnership established at closing.
On January 14, 2026, following completion of the Husky Transaction, GPGI Holdings refinanced approximately $2.1 billion$2,100 of total indebtedness that was assumed in the Husky Transaction. The refinancing included the issuance of $900 million of 5.625% senior secured notes due 2033, and the establishment of a new $1.2 billion$1,200 term loan facility maturing in 2033, and $400 million of revolving credit commitments maturing in 2031. The proceeds from these new debt instruments were used to refinance Husky’s existing indebtedness and to pay related fees, costs, premiums, and expenses incurred in connection with the recapitalization of the Company’s capital structure.
fees, costs, premiums, and expenses incurred in connection with the recapitalization of the combined company’s capital structure.
Economic tensions and changes in international trade policies, including new tariffs introduced by the U.S. last year, as well as ongoing geopolitical instability in certain regions, including the Middle East, have in the past impacted and could in the future impact the market for our products and services. In particular, a portion of the raw materials used by us to manufacture our products are obtained, directly or indirectly, from companies located outside of the United States, and disruptions arising from geopolitical conflicts or heightened tensions in the Middle East have in the past and could in the future further affect global supply chains, transportation routes, or input costs. Additionally, a significant downturn in the domestic or global economy has in the past and may in the future cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. If these uncertain business, macroeconomic, trade, or political conditions continue or further deteriorate, our business, financial condition, and results of operations could be materially adversely affected.
of the United States, and disruptions arising from geopolitical conflicts or heightened tensions in the Middle East have in the past and could in the future further affect global supply chains, transportation routes, or input costs. Additionally, a significant downturn in the domestic or global economy has in the past and may in the future cause our existing customers to pause or delay orders and prospective customers to defer new projects. Together, these circumstances create an environment in which it is challenging for us to predict future operating results. If these uncertain business, macroeconomic, trade, or political conditions continue or further deteriorate, our business, financial condition, and results of operations could be materially adversely affected.
Following the Spin‑Off on February 28, 2025, the Company no longer consolidates GPGI Holdings and instead accounts for its investment in GPGI Holdings under the equity method. The components of results of operations presented below primarily relate to the operations of GPGI Holdings prior to the Spin-Off when the Company consolidated GPGI Holdings' operating results. Subsequent to the Spin‑Off, theGPGI, Company’sInc.’s activities werehave been limited primarily to non‑revenue‑generating functions, including maintaining its stock market listing, compliance with public company reporting obligations, obligations under the tax receivable agreement ("TRA"), warrant liability remeasurement, earnout considerations,consideration, transaction expenses, and income recognized from its equity method investment.
Husky’s results of operations have been included in GPGI Holdings' results from the Husky Transaction Date through MarchJune 31,30, 2026 as an equity method investment in GPGI Holdings. Husky’s results are not included in the results of operations for the three and six months ended MarchJune 31,30, 2025, or for the portion of the quarter ended March 31, 2026 prior to the completion of the Husky Transaction (January 1, 2026 through January 11, 2026, inclusive) which limits comparability between periods.
The Company’s cost of sales associated with CompoSecure and Husky, which are equity method accounted, includesinclude the direct and indirect costs related to manufacturing products and providing related services. Product costs include the cost of raw materials and supplies, including various metals, purchased components such as cabinets, EMV® chips, holograms, adhesives, magnetic stripes, and NFC assemblies; the cost of labor; equipment and facilities; operational overhead; warranty; depreciation and amortization; leases and rental charges; shipping and handling; and freight and insurance costs. Cost of sales can be impacted by many factors, including volume, operational efficiencies, procurement costs, and promotional activity.
Other income (expense) primarily consists of changes in fair value of warrant liability, earnout consideration liabilityliability, loss on remeasurement of the tax receivable agreement liability, and interest expense, net of any interest income.
Net income (loss) consists of the Company’s income (loss) from operations, less other expenses and income tax provisionexpense or benefit.benefit, plus earnings (losses) in equity method investment.
Three Months Ended MarchJune 31,30, 2026 compared with Three Months Ended MarchJune 31,30, 2025
The Company’s net sales for the three months ended MarchJune 31,30, 2026 decreasedand by2025 $59.8were million,$— or 100%,due to $0.0. The decrease was driven by the deconsolidation of GPGI Holdings on February 28, 2025. GPGI Holdings generated $407.8 million$473.2 of net sales for the three months ended MarchJune 31,30, 2026, which increased by $303.9 million,$353.6, or 292%295.7% from $103.9 million$119.6 of net sales for the three-monthsthree months ended MarchJune 31,30, 2025. The increase was driven by the incremental revenues generated from Husky from the Husky Transaction Date.business.
The Company’s gross profit for the three months ended March 31, 2026 decreased $28.7 million, or 100%, to $0.0, while the gross profit margin decreased from 48% to 0%. The decrease in gross profit was due to the deconsolidation of GPGI Holdings as a result of the Spin-Off on February 28, 2025. GPGI Holdings generated
$155.6The millionCompany’s gross profit and gross margin for the three months ended June 30, 2026 and 2025 were $— and —% due to the deconsolidation of GPGI Holdings on February 28, 2025. GPGI Holdings generated $165.0 of gross profit for the three months ended MarchJune 31,30, 2026, compared to $54.5 million$68.8 of gross profit for the three months ended MarchJune 31,30, 2025. The increase was driven by the incremental gross profit generated from Husky from the Husky Transaction Date.business.
The Company’s operating expenses for the three months ended MarchJune 31,30, 2026 increased $32.9 million,$6.8, or 145%,261.5%, to $55.6 million$9.4 compared to $22.7 million$2.6 for the three months ended MarchJune 31,30, 2025. The increase was driven primarily by higher stock-based compensation expense from independent contractors now being recognized by the deconsolidationCompany after the loss of GPGIcommon control with Resolute Holdings assubsequent a result ofto the Spin-Off on February 28, 2025 and Husky Transaction costs of $49.8 million.Date. GPGI Holdings incurred $170.0 million$139.0 of operating expenses for the three months ended MarchJune 31,30, 2026, compared to $27.9 million$27.8 of operating expenses for the three months ended MarchJune 31,30, 2025. The increase was driven by the incremental operating expenses associated with the Husky business from the Husky Transaction Date.business.
Income (Loss) from Operations and Operating Margin
During the three months ended MarchJune 31,30, 2026, the Company had loss from operations of $55.6 million$9.4 compared to income from operations of $6.0 million$2.6 for the three months ended MarchJune 31,30, 2025. The Company’s operating margin forwas the three months ended March 31, 2026 decreased to 0% compared to 10%0.0% for the three months ended MarchJune 31,30, 2026 and June 30, 2025 due to the deconsolidation of GPGI Holdings on February 28, 2025. The decrease in income from operations was associated with an increase in selling, general and operatingadministrative marginexpenses wasprimarily drivendue byto theprofessional deconsolidationfees ofand GPGIstock-based Holdingscompensation as a result of the Spin-Off on February 28, 2025.expense. GPGI Holdings had aan lossincome from operations of $14.4 million$26.0 for the three months ended MarchJune 31,30, 2026 compared to aan gainincome from operations of $26.6 million$41.0 for the three months ended MarchJune 31,30, 2025. The changedecrease fromin income to loss from operations was primarily driven by thea incremental$22.7 operatingloss expensesfrom operations associated with the Husky business from the Husky Transaction Date.business.
Other expenses for the three months ended March 31, 2026 was $21.7 million as compared to other income $27.7 million for the three months ended March 31, 2025. The change from other income to other expenses of $49.3 million was due to the loss of remeasurement of the TRA liability of $21.9 million and the prior year revaluation of the warranty and earnout consideration liabilities of $29.1 million that were not repeated. GPGI Holdings had other expenses of $136.5 million for the three months ended March 31, 2026. The increase was largely driven by the loss of extinguishment of debt incurred in conjunction with the series of refinancing transactions discussed below.
Earnings in Equity Method Investment
Beginning February 28, 2025, the Company recognizes its share of GPGI Holdings’ net income within "Earnings (losses) in equity method investment" which totaled a loss of $154.1 million for the three months ended March 31, 2026 as compared to $14.8 million for the three months ended March 31, 2025. The increase in losses was due to the Husky Transaction. Refer to Note 3 in the unaudited condensed consolidated financial statements for the results of our equity method investment.
Other Income Tax(Expense), Expensenet
Other expenses for the three months ended June 30, 2026 was $6.2 as compared to other expenses of $64.2 for the three months ended June 30, 2025. The decrease in other expenses of $58.0 was due to the prior year revaluation of the warrant liability of $53.5 and liability associated with earnout consideration of $10.7 that were not repeated. GPGI Holdings had other income of $63.2 for the three months ended June 30, 2026 compared to other expenses of $2.1 for the three months ended June 30, 2025. The increase in other income was predominantly driven by a $96.2 gain on debt extinguishment recognized pursuant to a fair value measurement period adjustment on the debt assumed as part of the Husky Transaction.
Earnings (Losses) in Equity Method Investment
Beginning February 28, 2025, the Company recognizes its share of GPGI Holdings’ net income within "Earnings (losses) in equity method investment" which totaled earnings of $67.1 for the three months ended June 30, 2026 as compared to $38.9 for the three months ended June 30, 2025. The increase in earnings was primarily due to incremental earnings associated with a $96.2 gain on debt extinguishment. Refer to Note 3 in the unaudited condensed consolidated financial statements for the results of our equity method investment.
Income Tax (Expense) Benefit
The Company's income tax expense for the three months ended MarchJune 31,30, 2026 was $3.6 million,$(1.2) compared to $27.0an millionincome tax benefit of $1.8 for the three months ended MarchJune 31,30, 2025.
Six Months Ended June 30, 2026 compared with Six Months Ended June 30, 2025
Reflecting the change to equity method accounting after the Spin-Off, the following table presents the Company’s results of operations for the periods indicated:
The Company’s net sales for the six months ended June 30, 2026 decreased by $59.8, or 100.0%, to $0.0. The decrease was driven by the deconsolidation of GPGI Holdings on February 28, 2025. GPGI Holdings generated $881.0 of net sales for the six months ended June 30, 2026, which increased by $657.5, or 294.2% from $223.5 of net sales for the six months ended June 30, 2025. The increase was driven by the incremental revenues generated by Husky from the Husky Transaction Date.
Gross Profit and Gross Margin
The Company’s gross profit for the six months ended June 30, 2026 decreased $28.7, or 100.0%, to $0.0, while the gross profit margin decreased from 48.0% to 0.0%. The decrease in gross profit was due to the deconsolidation of GPGI Holdings as a result of the Spin-Off on February 28, 2025. GPGI Holdings generated $320.6 of gross profit for the six months ended June 30, 2026, compared to $123.3 of gross profit for the six months ended June 30, 2025. The increase was driven by the incremental gross profit generated by Husky from the Husky Transaction Date.
Operating Expenses
The Company’s operating expenses for the six months ended June 30, 2026 increased $39.7 or 156.9%, to $65.0 compared to $25.3 for the six months ended June 30, 2025. The increase was driven primarily by higher stock-based compensation expense from independent contractors now being recognized by the Company after loss of common control with Resolute Holdings subsequent to the Husky Transaction Date and Husky Transaction costs of $49.8. GPGI Holdings incurred $309.0 of operating expenses for the six months ended June 30, 2026 compared to $55.7 of operating expenses for the six months ended June 30, 2025. The increase was driven by the incremental operating expenses associated with the Husky business of $247.3 from the Husky Transaction Date.
Income (Loss) from Operations and Operating Margin
During the six months ended June 30, 2026, the Company had a loss from operations of $65.0 compared to income from operations of $3.4 for the six months ended June 30, 2025. The Company’s operating margin for the six months ended June 30, 2026 decreased to 0.0% compared to 5.7% for the six months ended June 30, 2025 . The decrease in income from operations and operating margin was driven by the deconsolidation of GPGI Holdings as a result of the Spin-Off on February 28, 2025. GPGI Holdings had a gain from operations of $11.6 for the six months
ended June 30, 2026 compared to a gain from operations of $67.6 for the six months ended June 30, 2025. The decrease in income from operations was primarily driven by a $79.0 loss from operations from the Husky business.
Other Income (Expense), net
Other expenses for the six months ended June 30, 2026 was $27.9 as compared to other expenses of $36.5 for the six months ended June 30, 2025. The decrease in other expenses of $8.6 primarily relates to the loss on remeasurement of the tax receivable agreement liability of $28.1 for the six months ended June 30, 2026 as compared to the revaluation of the warranty liability of $35.6 for the six months ended June 30, 2025. GPGI Holdings had other expenses of $73.3 for the six months ended June 30, 2026 compared to other expenses of $4.5 for the six months ended June 30, 2025. The increase was largely driven by higher interest expense of $62.5.
Earnings (Losses) in Equity Method Investment
The Company recognizes its share of GPGI Holdings’ net income (loss) within "Earnings (losses) in equity method investment" which totaled a loss of $87.0 for the six months ended June 30, 2026 as compared to earnings of $53.7 for the period from the Spin-Off date of February 28, 2025 to June 30, 2025. The decline in earnings was due to the impact of the Husky Transaction. Refer to Note 3 in the unaudited condensed consolidated financial statements for the results of our equity method investment.
Income Tax (Expense) Benefit
The Company's income tax expense for the six months ended June 30, 2026 was $(4.8) compared to $(25.2) for the six months ended June 30, 2025.
The following unaudited table presents the reconciliation of net income (loss) to Adjusted EBITDA for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.
(1) Includes amortization of deferred financing costs for the three months ended MarchJune 31,30, 2026.2026 and June 30, 2025.
(2) The presented adjustments include amounts related to both the Company and its equity method investment in GPGI Holdings for the three months ended March 31, 2025.
(32) Includes the changes in fair value of warrant liability,liability and derivativeearnout liabilitiesliability for the three months ended MarchJune 31,30, 2025.
(43) Husky Transaction costs for the three months ended MarchJune 31,30, 2026 primarily include advisory, legal and other professional fees incurred in connection with the Husky business combination.Transaction.
(54) Spin-Off costs for the three months ended MarchJune 31,30, 2025 represent deal‑related expenses incurred in connection with the Spin-Off completed on February 28, 2025.
(65) Depreciation and amortization includes $46.8 million$50.3 of acquisition‑related fair value step‑ups related to the Husky Transaction for the three months ended MarchJune 31,30, 2026.
(6) There were measurement period adjustments reflected in the condensed consolidated statements of operations in the current period related to the Husky Transaction.
The following unaudited table presents the Adjusted EPS and reconciliation of GAAP net income (loss) to non-GAAP Adjusted EPSEBITDA for the periodssix indicatedmonths belowended toJune reflect30, current2026 and deferredJune income30, tax2025, expenses. The belowrespectively.
GPGI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 5 Form 4 filings (5 insiders, 5 trade dates, 105,237 shares, about $1.2M) and open-market sales in 0 filings. Net open-market shares: 105,237 (purchases minus sales); net value about $1.2M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-11 | Knott Thomas R. |
Open-market purchase | 85,250 | $11.67 | $994.9K |
| 2026-05-26 | Moriarty Kevin M |
Open-market purchase | 3,956 | $12.64 | $50.0K |
| 2026-05-14 | Mikkilineni Krishna |
Open-market purchase | 8,106 | $12.34 | $100.0K |
| 2026-05-13 | Schoen Kurt |
Open-market purchase | 4,000 | $12.58 | $50.3K |
| 2026-05-12 | Loree Rebecca Corbin |
Open-market purchase | 3,925 | $12.87 | $50.5K |
Well-known investors holding GPGI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Leon Cooperman | 2026-06-30 | 11,384,508 | $180.4M | 5.09% | New position |
| Starboard Value (Jeff Smith) | 2026-06-30 | 5,027,028 | $79.7M | 1.76% | No change |
| Bridgewater Associates | 2026-06-30 | 115,013 | $1.8M | 0.01% | New position |
| Renaissance Technologies | 2026-06-30 | 44,229 | $756.3K | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 47,463 | $752.3K | 0.0% | Reduced 54% |
| Polen Capital Management | 2026-06-30 | 33,406 | $571.2K | — | Sold out |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 18,654 | $295.7K | 0.0% | Reduced 65% |