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| Part I | 3 | |
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| | Item 1. Business | 3 |
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| | Item 1A. Risk Factors | 15 |
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| | Item 1B. Unresolved Staff Comments | 41 |
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| | Item 1C. Cybersecurity | 41 |
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| | Item 2. Properties | 41 |
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| | Item 3. Legal Proceedings | 41 |
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| | Item 4. Mine Safety Disclosures | 41 |
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| Part II | 42 | |
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| | Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities | 42 |
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| | Item 6. [Reserved] | 42 |
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| | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 42 |
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| | Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 53 |
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| | Item 8. Financial Statements | F-1 |
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| | Item 9 Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | 55 |
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| | Item 9A. Controls and Procedures | 55 |
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| | Item 9B. Other Information | 55 |
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| | Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | 55 |
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| Part III | 56 | |
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| | Item 10. Directors, Executive Officers, and Corporate Governance | 56 |
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| | Item 11. Executive Compensation | 56 |
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| | Item 12. Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 56 |
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| | Item 13. Certain Relationships and Related Transactions, and Director Independence | 56 |
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| | Item 14. Principal Accountant Fees and Services | 56 |
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| Part IV | 57 | |
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| | Item 15. Exhibits and Financial Statement Schedules | 57 |
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| | Item 16. Form 10–K Summary | 58 |
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| Signatures | 59 | |
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i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K (this “Annual Report”), and in the documents incorporated by reference herein, may constitute “forward-looking statements,” as defined by the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements are based on our current assumptions regarding future business and financial performance. These statements by their nature address matters that are uncertain to different degrees. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “plans,” “projects,” and similar expressions, may identify such forward-looking statements. Any forward-looking statement in this Annual Report speaks only as of the date on which it is made. Although we believe that the forward-looking statements contained in this Annual Report are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results, cash flows or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:
| ● | the competitive environment in which we currently or intend to operate; |
| ● | our strategy, outcomes and growth prospects; |
| ● | general economic trends and trends in the industry and markets in which we and our managed companies operate; |
| ● | our and our managed companies’ business dealings involving third-party partners in various markets; |
| ● | the risks from our entry into the CompoSecure Management Agreement (as defined herein) and management agreements with other managed companies, including risks relating to due diligence, negotiation, performance, the calculation and payment of management fees including the CompoSecure Management Fee (as defined herein) and termination; |
| ● | risks relating to our current reliance on CompoSecure Holdings, including the presentation of CompoSecure Holdings’ financial information in our financial statements; |
| ● | the risk that our managed companies will fail to perform as we expect and the resulting impacts on the management fees we expect to receive; |
| ● | our ability to identify and successfully negotiate and integrate into CompoSecure Holdings (as defined herein) or our other managed companies’ future business acquisitions and investment opportunities; |
| ● | our ability to develop and deploy the Resolute Operating System at CompoSecure Holdings and our other managed companies; |
| ● | our ability to attract and retain personnel, including key members of our management; |
| ● | the ability of CompoSecure Holdings to grow and manage growth profitably, maintain relationships with its customers, compete within its industry and retain its key employees; |
| ● | the possibility that CompoSecure Holdings may be adversely impacted by other economic, business and/or competitive factors; |
| ● | future exchange and interest rates; |
| ● | damage to our reputation; |
| ● | our ability to comply with extensive, complex and increasing legal and regulatory requirements; |
| ● | cybersecurity and privacy considerations; |
| ● | legal proceedings and investigatory risks, including the outcome of any legal proceedings that may be instituted against CompoSecure Holdings or others; |
| ● | our failure to manage the transition to a stand-alone public company; and |
| ● | certain factors discussed elsewhere in this Information Statement. |
These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Annual Report are more fully described in the “Risk Factors” section. The risks described in “Risk Factors” are not exhaustive. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
