Resolute Holdings Management, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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FY2024 · Filed Mar 31, 2025
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Item 1. Business
Unless the context otherwise requires, all references in this subsection to the “Company,” “Resolute Holdings,” “we,” “us,” “our,” and similar terms refer to Resolute Holdings Management, Inc.
Overview
We are a newly formed Delaware corporation organized to provide operating management services to CompoSecure Holdings L.L.C. (“CompoSecure Holdings,” and which solely for the purposes of this section, includes its controlled affiliates), a wholly-owned subsidiary of CompoSecure, Inc. (“CompoSecure”), and any other companies we may manage in the future, both in the United States and internationally. We expect to earn management fees from CompoSecure Holdings, including any additional businesses that CompoSecure Holdings may acquire from time to time, pursuant to a long-term management contract that we entered into with CompoSecure Holdings (the “CompoSecure Management Agreement”) on February 28, 2025 (the “Distribution Date”), in connection with the completion of our spin-off from our former parent, CompoSecure, Inc. (the “Spin-Off”). We expect to enter into additional agreements to manage additional companies in the future. On the Distribution Date, our common stock began regular-way trading on The Nasdaq Stock Market LLC under the ticker symbol “RHLD.”
Our management team, led by David Cote and Tom Knott, has a proven track record of sourcing, executing and integrating businesses and then growing and developing those businesses profitably. David Cote brings more than 40 years of operating experience across a wide range of industries. Following a variety of senior executive positions at GE and TRW, Mr. Cote served as Executive Chairman of the Board and Chief Executive Officer of Honeywell from 2002 to 2017. While at Honeywell, Mr. Cote led a profound shift in strategy characterized by a focus on profitable growth, consistent margin improvement and the development of a results-oriented culture. Mr. Cote also implemented a disciplined acquisition framework, using M&A to build Honeywell’s divisions to leading positions in their respective industries and to optimize Honeywell’s portfolio of businesses. Mr. Cote’s efforts yielded significant improvements in operating and financial performance that led to meaningful and consistent value creation for stockholders. Under his leadership, from 2003 to 2017, Honeywell reported revenues increased by 83% and significant segment profit margin expansion and adjusted earnings per share growth. From January 1, 2003 to April 18, 2018, Honeywell’s total stockholder return (calculated as the capital gain plus dividends) was 797% compared to 321% for the S&P 500 (Mr. Cote served as Chairman and Chief Executive Officer of Honeywell until March 2017, and as non-executive Chairman of the Board at Honeywell until April 2018). Honeywell’s market capitalization also grew from $20 billion on January 1, 2003, to approximately $112 billion on April 18, 2018, after distributing in excess of $17 billion of dividends, thereby creating in excess of $109 billion of value for Honeywell’s stockholders. Most recently, Mr. Cote has served since February 2020 as the Executive Chairman of the Board of Vertiv, the stock price of which increased 716% during his tenure (as of March 26, 2025). Since September 17, 2024, Mr. Cote has also served as the Executive Chairman of the Board of CompoSecure, and from September 25, 2024 until the transfer of his employment to us in connection with the completion of the Spin-Off on February 28, 2025, served as Co-Chief Investment Officer of CompoSecure. Tom Knott brings more than 14 years of investment experience across a variety of assets classes and investment structures. Most recently, he led the Permanent Capital Strategies group at Goldman Sachs, where his efforts were focused on developing a platform to combine long-term capital and a disciplined acquisition strategy with best-in-class operating capabilities. While at Goldman Sachs, Mr. Knott successfully led the initial public offering of special purpose acquisition companies GS Acquisition Holdings Corp (“GSAH I”) and GS Acquisition Holdings Corp II (“GSAH II”) through to their respective mergers with Vertiv and Mirion Technologies. From September 17, 2024 until the transfer of his employment to us in connection with the completion of the Spin-Off on September 28, 2025, Mr. Knott was employed as Co-Chief Investment Officer of CompoSecure, following which he serves as CompoSecure’s Chief Investment Officer.
We believe the CompoSecure Management Agreement, as well as the additional management agreements we may enter into in the future with additional managed companies, will provide us with recurring, long-duration management fees, and that our substantial growth prospects and scalable operating platform will position us as an industry leading operating manager. Our aspiration to become an industry-leading operations manager is based on our differentiated approach of value creation through the systematic deployment of the Resolute Operating System (“ROS”) along with management’s history of successfully building businesses into leading positions in their respective industries. We believe that the ROS will drive performance at businesses we manage and will create value at both the underlying managed businesses, including the business of CompoSecure, and at Resolute Holdings. We believe this operationally driven approach combined with our M&A and capital markets expertise is a competitive advantage that will enable us to maximize stockholder value in both companies over time.
Currently, we are party to a single management agreement, the CompoSecure Management Agreement, pursuant to which we manage the day-to-day business and operations and oversee the strategy of the business of CompoSecure, which is operated through CompoSecure Holdings. Founded in 2000, CompoSecure is an integral technology partner to market-leading payment card issuers, emerging Fin Techs and global consumers enabling trust at the point of transaction. The company is a leading designer and manufacturer of premium metal, composite, and proprietary financial payments cards. CompoSecure creates innovative, highly differentiated and customized quality financial payment 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 within the United States, with additional direct and indirect customers in Europe, Asia, Latin America, Canada and the Middle East. With over 20 years of innovation and experience, CompoSecure has the leading market share in premium metal payment card manufacturing and has relationships with 125 customers globally, including nine of the 10 largest U.S. card issuers.
CompoSecure is also an emergent player in secure authentication and digital asset storage through its Arculus platform. Formed in 2021, the Arculus 3-factor authentication solution is a stand-alone business within CompoSecure. Arculus leverages three-factor authentication to confirm a user’s identity with biometrics, entry of numeric PIN and a proprietary metal key card that requires a physical tap to a phone to authenticate a transaction. Arculus Authenticate is a hardware-bound PassKey authenticator that supports new device authentication, customer support authentication, step-up authentication for highly secure transactions and secure login on mobile devices. Arculus Cold Storage is a digital asset hardware cold storage wallet that generates, stores and secures key for self-custody of cryptocurrencies.
THE COMPOSECURE Management Agreement
Effective as of the completion of the Spin-Off, we entered into the CompoSecure Management Agreement with CompoSecure Holdings, pursuant to which we are responsible for managing the day-to-day business and operations, and overseeing the strategy, of CompoSecure Holdings and its subsidiaries. The CompoSecure Management Agreement provides that Resolute Holdings will use its reasonable best efforts to present CompoSecure Holdings with continuing and suitable management and M&A advisory services in exchange for the payment of a quarterly management fee, payable in arrears, in a cash amount equal to 2.5% of CompoSecure Holdings’ last 12 months’ Adjusted EBITDA, measured for the period ending on the fiscal quarter then ended as calculated in accordance with the CompoSecure Management Agreement. The summary below of the CompoSecure Management Agreement is qualified by reference to the full text of the CompoSecure Management Agreement, which is filed as Exhibit 10.1 to this Annual Report.
Our Responsibilities under the Management Agreement
Under the CompoSecure Management Agreement, in connection with our managing the day-to-day business and operations and overseeing the strategy of CompoSecure Holdings (which, for purposes of this section, means CompoSecure Holdings and its controlled affiliates), we are responsible for, among other things, the following services and activities to the fullest extent permitted by Delaware law, the Securities Exchange Act of 1934 (the “Exchange Act”), the Securities Act of 1933 (the “Securities Act”), the listing rules of The Nasdaq Stock Market LLC (the “Nasdaq listing rules”) and any other applicable rule or regulation:
| ● | establishing and monitoring CompoSecure Holdings’ objectives, financing activities and operating performance; |
| ● | selecting and overseeing CompoSecure Holdings’ management team and their operating performance; |
| ● | reviewing and approving CompoSecure Holdings’ compensation and benefit plans, programs, policies and agreements, including with respect to any grants of equity awards to persons providing services to CompoSecure Holdings; |
| ● | devising capital allocation strategies, plans and policies of CompoSecure Holdings; |
| ● | setting the budget parameters and expense guidelines of CompoSecure Holdings and monitoring compliance therewith; |
| ● | identifying, analyzing and overseeing the consummation of business opportunities and potential acquisitions, dispositions and other business combinations; |
| ● | originating and recommending opportunities to form or acquire, and structuring and managing, any joint ventures; |
| ● | overseeing negotiations with potential participants in any business opportunity under CompoSecure Holdings’ consideration and determining (or delegating to any officer of CompoSecure Holdings the decision to determine) if and when to proceed; |
| ● | engaging and supervising, on CompoSecure Holdings’ behalf, independent contractors and third-party service providers; |
| ● | setting the budget parameters and expense guidelines of CompoSecure Holdings; |
| ● | communicating on behalf of CompoSecure Holdings with the holders of any securities of CompoSecure Holdings (i) as required to satisfy any reporting and other requirements of any governmental authority having jurisdiction over CompoSecure Holdings and (ii) to maintain effective relations with such holders; |
| ● | overseeing all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which CompoSecure Holdings may be involved or to which CompoSecure Holdings may be subject arising out of CompoSecure Holdings’ day-to-day activities (other than with us or our affiliates); |
| ● | counselling CompoSecure Holdings in connection with decisions required by Delaware law to be made by the CompoSecure Board; and |
| ● | performing such other services from time to time in connection with the management of the business and affairs of CompoSecure Holdings and its activities as the CompoSecure Board shall reasonably request and/or we shall deem appropriate under the particular circumstances. |
Management Fee
CompoSecure Holdings agreed to pay us a quarterly management fee (the “CompoSecure Management Fee”), payable in arrears, in a cash amount equal to 2.5% of CompoSecure Holdings’ last 12 months’ Adjusted EBITDA, measured for the period ending on the fiscal quarter then ended, as defined in the CompoSecure Management Agreement. In the case that CompoSecure Holdings’ Adjusted EBITDA for any period is equal to or lower than zero, no CompoSecure Management Fee will be payable to us in respect of such period. We may elect not to receive, or to discount, the CompoSecure Management Fee for a given quarterly period, but any such election will, for the avoidance of doubt, be ignored in calculating the CompoSecure Termination Fee (as defined below) and will not constitute a waiver or discount of the CompoSecure Management Fee in any future periods.
Reimbursement of Costs and Expenses
CompoSecure Holdings is responsible for all of its costs and expenses and will reimburse us or our affiliates for our or our affiliates’ documented costs and expenses incurred on behalf of CompoSecure Holdings other than expenses related to our or our affiliates’ personnel who provide services to CompoSecure Holdings under the CompoSecure Management Agreement. We will determine, in our sole and absolute discretion, whether a cost or expense will be borne by us or CompoSecure Holdings. We may elect not to seek reimbursement for certain expenses during a given quarterly period but any such determination will not constitute a waiver of reimbursement for such expenses, or similar expenses, in future periods.
Term
The CompoSecure Management Agreement has an initial term of ten years and the term will automatically renew for successive and additional ten-year terms, unless the CompoSecure Management Agreement is terminated in accordance with its terms, as described below.
Termination and Termination Fee
We have the right to terminate the CompoSecure Management Agreement:
| ● | upon 180 days’ written notice before the last day of the initial term or a renewal term to CompoSecure Holdings for any reason; |
| ● | upon 60 days’ written notice before the last day of the initial term or a renewal term to CompoSecure Holdings in the event of: |
| o | a default by CompoSecure Holdings in the performance or observance of any material term, condition or covenant contained in the CompoSecure Management Agreement that continues for a period of 30 days after delivery by us of a written notice to CompoSecure Holdings specifying the default and requesting that it be remedied in the same 30-day period (and the CompoSecure Termination Fee (as defined below) will be payable in accordance with the terms of the CompoSecure Management Agreement); or |
| o | a termination of that certain Letter Agreement, by and between CompoSecure and Resolute Holdings, dated as of the Distribution Date (and the CompoSecure Termination Fee will be payable in accordance with the terms of the CompoSecure Management Agreement); |
| ● | at any time upon CompoSecure Holdings becoming required to register as an investment company under the Investment Company Act of 1940. |
CompoSecure Holdings has the right to terminate the CompoSecure Management Agreement:
| ● | upon 180 days’ written notice before the last day of the initial term or a renewal term and payment of the CompoSecure Termination Fee, if two-thirds of the independent directors of CompoSecure (who have not recused themselves with respect to such vote) determine the CompoSecure Management Fee is not fair and the parties fail to reach an understanding on the fee following consultation and mediation procedures set forth in the CompoSecure Management Agreement; |
| ● | upon 30 days’ prior written notice at any time during the initial term or a renewal term, without payment of the CompoSecure Termination Fee, if any of the following events occur (each, a “CompoSecure Kick-Out Event”): |
| o | final judgment (which is not stayed or vacated within 30 days) that Resolute Holdings has committed a felony or material violation of securities laws that has a material adverse effect on CompoSecure Holdings’ business or ability of Resolute Holdings to perform its duties under the CompoSecure Management Agreement; |
| o | final judgment (subject to a 30-day cure period) that Resolute Holdings has committed fraud against CompoSecure Holdings, misappropriated or embezzled funds of CompoSecure Holdings, acted or failed to act in a manner constituting bad faith, willful misconduct, gross negligence or reckless disregard of its duties; or |
| o | the bankruptcy or dissolution of Resolute Holdings. |
As used in this summary, the term “CompoSecure Termination Fee” means an amount equal to the greatest of:
| ● | as of the effective termination date, the fair market value of the aggregate CompoSecure Management Fee then payable or that would become payable if the CompoSecure Management Agreement were automatically renewed and remained in effect in perpetuity; |
| ● | as of the effective termination date, the net present value of the aggregate CompoSecure Management Fee then payable or that would become payable if the CompoSecure Management Agreement were automatically renewed and remained in effect in perpetuity, calculated in accordance with the CompoSecure Management Agreement; and |
| ● | four times the aggregate CompoSecure Management Fee that became payable during the 24-month period prior to termination. |
The CompoSecure Termination Fee shall be payable in cash or, at the option of CompoSecure Holdings, by action of a two-thirds vote of the independent directors of the board of directors of CompoSecure (who have not recused themselves with respect to such vote) and upon written notice thereof, shares of CompoSecure common stock or a combination of shares of CompoSecure common stock and cash, provided that the issuance of any shares of CompoSecure common stock in connection with the payment of the CompoSecure Termination Fee shall be in accordance with applicable laws and stock exchange regulations.
Indemnification
CompoSecure Holdings will, to the fullest extent permitted by Delaware law, reimburse, indemnify and hold harmless us, our affiliates and the respective directors, officers, employees and stockholders, including the directors, officers, employees, managers, trustees, control persons, partners, stockholders and equityholders (“Manager Indemnified Parties”) of and from:
| ● | any and all expenses, losses, damages, liabilities, demands, penalties, costs, charges and claims of any nature whatsoever (excluding the costs described in below bullet) in respect of or arising from any acts or omissions of such Manager Indemnified Party performed in good faith in accordance with, pursuant to, or in furtherance of, the CompoSecure Management Agreement and not constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of duties of such Manager Indemnified Party under the CompoSecure Management Agreement; and |
| ● | any and all documented and reasonable out-of-pocket expenses (including fees and out-of-pocket disbursements of counsel) incurred in connection with investigating, preparing or defending any acts or omissions by us or our officers, employees or affiliates performed in accordance with, pursuant to or in furtherance of, the CompoSecure Management Agreement, whether by or through attempted piercing of the corporate veil, by or through a claim, by the enforcement of any judgment or assessment or by any legal or equitable proceeding (including any threatened or ongoing investigative, administrative, judicial or regulatory action or proceeding), or by virtue of any statute, regulation or other applicable law, or otherwise as such expenses are incurred or paid (provided that if it is ultimately finally judicially determined in a court of competent jurisdiction that the aforementioned Manager Indemnified Parties are not entitled to indemnification thereunder, such Manager Indemnified Parties shall reimburse CompoSecure Holdings for any and all documented and reasonable out-of-pocket expenses (including fees and out-of-pocket disbursements of counsel) already paid or reimbursed by CompoSecure Holdings in respect of which such final judicial determination was made). |
Additional Activities of Resolute Holdings
The CompoSecure Management Agreement will not create an exclusive relationship between CompoSecure Holdings and its controlled affiliates, on the one hand, and us, on the other hand. Under the CompoSecure Management Agreement, we and our affiliates may, in our sole and absolute discretion, allocate opportunities among CompoSecure Holdings and any other person to which we render services of any kind, or for which we otherwise act as an external manager, in any manner that we deem appropriate. The doctrine of corporate opportunity or any analogous doctrine will not apply to us or our affiliates and nothing in the CompoSecure Management Agreement will be construed to impose on us an express or implied fiduciary duty to CompoSecure Holdings, any of its controlled affiliates or any holders of equity or voting interests in CompoSecure Holdings or such controlled affiliates.
Additional Covenants
If the CompoSecure Management Agreement is terminated by CompoSecure Holdings in accordance with its terms without a CompoSecure Kick-Out Event, then, for a period of two years following such termination, CompoSecure Holdings will be prohibited, unless we provide consent, from employing or otherwise retaining any of our or our affiliates’ employees or any person who has been employed by us or any of our affiliates at any time within such two-year period.
Our Management Strategy
Our primary business objective is to provide operational management services to CompoSecure Holdings and any other companies we may manage in the future. Our growth will be directly aligned with our ability to grow CompoSecure’s business profitably through operational improvements, accretive investments and diversifying acquisitions.
We refer to our management strategy as the Resolute Operating System (“ROS”), developed over 40 years by David Cote through his management experience at GE, Honeywell and Vertiv. The key tenets of the ROS are Accelerate Organic Revenue Growth, Operational Excellence, Continuous Improvement, and M&A and Capital Allocation Excellence:
Strategic Approach to Deliver Long-Term Stockholder Value
Overview of Key Tenets
| ● | Accelerate Organic Revenue Growth. We intend to pursue an acceleration in organic growth through a combination of revenue scaling, targeted research and development, salesforce efficiency and value-based pricing. Revenue scaling will involve making commercial introductions and identifying new markets for expansion based on identified product-market |
fit. Our research and development framework will prioritize efficiency and a focus on the highest return on invested capital while consistently innovating to achieve recurring product launches. Salesforce efficiency and effectiveness is a function of accountability and the appropriate go-to-market strategy which we intend to proactively monitor. We believe that products should be priced according to the value they provide to the marketplace. The ability to consistently provide new and improved products should enhance our ability to price our operating companies’ products according to the value they provide to their respective customers.
| ● | Operational Excellence. Our management team, led by David Cote, intends to implement lean and design for six-sigma methodologies that include value stream mapping to achieve operational excellence and reduced waste throughout CompoSecure’s business and other companies managed by Resolute Holdings from time to time. Through the systematic application of best practices and process standardization, CompoSecure’s business will aim to achieve consistent output quality, reduce factory overhead, mitigate operational risks and strengthen its competitive position in the marketplace. We believe our planned operational excellence initiatives will also further establish a framework for continuous monitoring and refinement of processes, enabling us to respond to evolving market demands and regulatory requirements, while sustaining long-term profitability and stockholder value. |
Operational Excellence — Standard Implementation Framework Structures Deployment
| ● | Continuous Improvement. Our management team’s dedication to continuous improvement is fundamental to driving our strategy of fostering innovation, optimizing operational performance and enhancing overall business resilience. Our approach entails a disciplined and ongoing review of processes, products and services, aimed at identifying opportunities for incremental enhancements and efficiency gains. Through adoption of lean and design for six-sigma methodologies, we believe we will pursue sustained excellence include by utilizing value stream mapping, Kaizen, 5S (cleanliness and order), visual management, standardized workflows, process design for flow and quality, knowledge sharing, leader driven outcomes and daily management system. The operating system’s goal is to continuously reduce manufacturing variability, minimize production defects, improve production yields and improve customer satisfaction. We believe our continuous improvement efforts will support the ability of CompoSecure’s business to adapt to changing market conditions and regulatory landscapes, contributing to sustainable growth and long-term stockholder returns. |
Continuous Improvement — Standardized Kaizen Event Process
M&A and Capital Allocation Excellence — Disciplined, End-to-End M&A Process Ownership
| ● | M&A and Capital Allocation Excellence. Integrations have been the driving force behind the ability of our management personnel to drive sustained growth in their prior management roles. We believe a successful acquisition and integration strategy is central to long-term stockholder value creation. Our team has extensive, cross-functional expertise in identifying opportunities in secularly attractive markets with robust growth drivers that can both add capabilities to CompoSecure’s core business and further diversify CompoSecure’s business mix. We intend to analyze opportunities for enhanced market position, growth potential, differentiated technologies and ability to drive margin expansion. Our management team intends to continuously strive to evaluate and adjust our acquisition strategy to maintain a strong, diversified and countercyclical investment portfolio. Once businesses are managed by Resolute Holdings, our management team will focus on expeditiously prioritizing consistent integration by providing the tools, resources and best practices required to accelerate the transition. Complementary to our M&A approach, we intend to be disciplined and opportunistic with capital allocation to optimize the strength of our managed companies’ balance sheets for value creation. |
Our Acquisition Strategy
Our acquisition strategy involves acquisition by CompoSecure Holdings and our other future managed companies of businesses that we expect will produce stable growth in earnings and cash flows, as well as achieve attractive returns on capital. In this respect, we expect that CompoSecure Holdings and our other managed companies will make acquisitions in industries that are complementary, adjacent or outside of where their respective initial businesses currently operate, if we believe an acquisition presents an attractive opportunity. We believe that attractive opportunities will increasingly present themselves as private sector owners seek to monetize their interests in longstanding and privately held businesses and large corporate parents seek to dispose of their “non-core” operations. Through our extensive and diverse contacts in the financial, industrial, healthcare, aerospace & defense, technology and general business world, we expect that we will, through our managed companies, become the acquiror of choice for businesses that can benefit from the implementation of the ROS and having long-term strategic stockholders.
Resolute Holdings intends to manage its businesses in perpetuity and utilize the ROS to enhance growth, profitability and realize significant returns for all our stockholders. We believe the strategy of managing businesses in perpetuity is a differentiated characteristic versus traditional asset managers and should lead to higher returns on our invested capital given the reduction of buy-sell friction costs. We expect to further differentiate through the ability to invest prudently during the trough of market cycles to create long-term value. A key component of our strategy is for our managed companies to acquire businesses that can benefit from the operational deployment of the ROS. Key acquisition criteria include:
| ● | Great position in a good industry; |
| ● | Healthy organic and inorganic sales growth; |
| ● | Clear margin expansion opportunities; |
| ● | Stable free cash flow generation; |
| ● | Opportunities for high returns on incremental invested capital; |
| ● | Point differentiation, ideally through technology; and |
| ● | Long-term growth prospects supported by structurally growing end markets; |
We expect CompoSecure Holdings and other companies that we manage from time to time will benefit from our ability to identify diverse acquisition opportunities in a variety of industries. The success of our acquisition strategy is predicated on our ability to maintain a robust and proprietary pipeline of potential targets incremental to marketed processes, as well as regular reviews on integration and performance accountability. In addition, we intend to rely upon our management team’s extensive expertise in researching and valuing prospective target businesses, as well as negotiating the ultimate acquisition terms of such target businesses. Because there may be a lack of information available about these target businesses, which may make it more difficult to understand or appropriately value such target businesses, we plan to:
| ● | Engage in a substantial level of standardized internal and third-party due diligence regarding an assessment of financials, growth prospects, legal, human resources and environmental issues; |
| ● | Critically evaluate the management team to deliver on the go-forward business plan and targeted performance goals; |
| ● | Identify and assess any financial and operational strengths and weaknesses of any target business, including potential cost and revenue synergies; |
| ● | Analyze comparable businesses to benchmark financial and operational performance relative to industry competitors; |
| ● | Actively research and evaluate information on the relevant industry; and |
| ● | Thoroughly negotiate appropriate terms and conditions of any acquisitions. |
Our Financing Strategy
Our financing objective is to manage the capital structure of CompoSecure Holdings effectively to provide sufficient capital to execute our business strategies and provide financing for investment or acquisition opportunities. We intend to raise capital for additional acquisitions primarily through debt financings, equity financings, the sale of all or a part of existing CompoSecure’s businesses or by undertaking a combination of any of the above.
Our Competitive Strengths
We believe that we have several core strengths that underpin and differentiate our operationally focused management strategy relative to traditional asset managers:
| ● | Stable Revenue Base. We intend to generate revenues exclusively from recurring fees payable to us under one or more long-term agreements, including our CompoSecure Management Agreement. The CompoSecure Management Agreement extends for 10 years and auto-renews at the end of its initial 10-year term for successive 10-year terms; |
| ● | Scalable Asset Light Operating Model. Our key assets are our people and their relevant domain expertise and knowledge. We do not expect to have material ongoing capital investment needs and expect to generate high returns on invested capital. As our revenue grows, we expect to be able to achieve efficiencies from our scalable operating model, which we expect to lead to attractive operating margins over time; |
| ● | Strong Balance Sheet. We do not have any debt outstanding. In the near term, Resolute Holdings expects to be marginally profitable as it sets up operations to support the business of CompoSecure. As the business achieves scale, we expect to generate recurring revenues and expect to generate strong and highly predictable cash flows; |
| ● | Quality and Depth of Management. Our highly qualified and experienced management team will provide a broad range of functional expertise to the business of CompoSecure. Our senior management has successfully navigated several business cycles in which they have been able to manage businesses to sustain near-term profitability while positioning the businesses to generate long-term stockholder value; |
| ● | Alignment of Interests. We believe the structure of the CompoSecure Management Agreement will foster strong alignment of interests between CompoSecure Holdings, Resolute Holdings and the stockholders of both companies; and |
| ● | Growth through Strategic Acquisitions. We believe that our experience acquiring and integrating companies will allow us to diversify the customer and business mix of CompoSecure’s business in an accretive manner. Our management has experience in successfully executing M&A to reposition companies for long-term success. |
Competition
The management industry is highly competitive. We compete on a regional, industry and niche basis based on several factors, including ability to raise capital, opportunities and performance, transaction execution skills, access to and retention of qualified personnel, reputation, range of products, innovation and fees for our services. We expect that Resolute Holdings will compete with many third parties engaged in management activities including publicly traded companies, private companies, insurance companies, commercial and investment banking firms, private equity funds and other investors.
Employees
Resolute Holdings has approximately seven employees. As described above, we believe that one of our major strengths is the quality and dedication of our people.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These exemptions generally include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We plan to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an emerging growth company, except that we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act.
We will, in general, remain as an emerging growth company for up to five full fiscal years following the Spin-Off. We would cease to be an emerging growth company and, therefore, become ineligible to rely on the above exemptions if we:
| ● | have more than $1.235 billion in annual revenue in a fiscal year; |
| ● | issue more than $1 billion of non-convertible debt during the preceding three-year period; or |
| ● | become a “large accelerated filer” as defined in Exchange Act Rule 12b-2, which would occur after: (i) we have filed at least one annual report pursuant to the Exchange Act; (ii) we have been an SEC- reporting company for at least 12 months; and (iii) the market value of our shares of common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. |
Available Information
We are subject to the informational requirements of the Exchange Act and therefore file periodic reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Our internet address is http://www.resoluteholdings.com. We make available free of charge, on or through the investor relations section of our web site, this Annual Report and our other Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to the SEC. In addition, the SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically. Also posted on our web site are the charters for the Audit Committee, Compensation Committee and Nominating and Governance Committee of our board of directors (our “Board”). In addition, our web site may include disclosure relating to certain non-GAAP financial measures (as defined in Regulation G) promulgated under the Securities Act” and the Exchange Act that we may make public orally, telephonically, by webcast, by broadcast or by similar means from time to time.
To the extent required by the SEC’s rules and regulations, we intend to post amendments to or waivers from, if any, provisions of our Code of Conduct and Ethics (to the extent applicable to our directors, principal executive officer, principal financial officer and principal accounting officer) at this location on our website. Our stockholders may also obtain these documents in paper format free of charge upon request made to us. We can be contacted at Resolute Holdings Management, Inc., 445 Park Avenue, Suite 5B, New York, NY 10022, Attn: Chief Financial Officer, e-mail: info@resoluteholdings.com.
Information contained on our website is not incorporated by reference unless specifically referenced herein.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.