Sales Performance - For the three months ended September 30, 2025, net sales increased by $13.7 million, or 13%, to $120.9 million compared to $107.1 million for the same period in 2024[148]. - Domestic net sales rose by $25.1 million, or 31%, to $105.1 million, driven by higher volumes from new and existing customers[151]. - International net sales decreased by $11.3 million, or 42%, to $15.8 million, impacted by the timing of certain customer orders[152]. - Net sales for the nine months ended September 30, 2025, increased by $24.6 million, or 8%, to $344.3 million compared to $319.7 million in the same period of 2024[159]. - Domestic net sales rose by $40.9 million, or 16%, to $298.9 million, driven by higher volumes from new and existing customers[160]. - International net sales decreased by $16.3 million, or 26%, to $45.4 million, impacted by the timing of certain customer orders[161]. Profitability - Gross profit increased by $15.9 million, or 29%, to $71.3 million, with a gross margin of 59%, up from 52% in the prior year[153]. - Gross profit increased by $28.0 million, or 17%, to $194.7 million, with a gross margin improvement to 57% from 52%[162]. - Income from operations increased by $8.6 million, or 26%, to $41.5 million, with an operating margin of 34%, up from 31%[155]. - Income from operations increased by $9.0 million, or 9%, to $107.7 million, with an operating margin of 31%[164]. - The company reported a net income of $100.3 million for the nine months ended September 30, 2025, compared to $82.1 million in 2024, reflecting a 22% increase[158]. - For the three months ended September 30, 2025, the net income attributable to common stockholders was $(231,000), resulting in a diluted net income per share of $(0.03)[170]. - Fee-Related Earnings for the same period were $1,093,000, translating to Fee-Related Earnings per share of $0.13[170]. Expenses - Operating expenses rose by $7.3 million, or 32%, to $29.9 million, primarily due to increased salaries and equity-based compensation[154]. - Operating expenses rose by $19.0 million, or 28%, to $87.0 million, primarily due to increased salaries and equity-based compensation[163]. - Other expense decreased by $3.0 million to $2.0 million, primarily due to lower interest expense from extinguished Exchangeable Notes[156]. - Other expenses decreased by $10.1 million to $6.5 million, mainly due to lower interest expenses[165]. - The income tax expense for the quarter was $0.1 million, reflecting a change in tax status from a pass-through entity to a corporation[157]. - Income tax expense for the nine months ended September 30, 2025, was $0.9 million compared to $0.0 million in the prior year[166]. Cash Flow and Liquidity - As of September 30, 2025, the company had cash and cash equivalents totaling $98.2 million, with $1.0 million at Resolute Holdings and $97.2 million at CompoSecure Holdings[177]. - The company had short-term investments of $49.7 million, consisting of US treasury bills, with $9.1 million at Resolute Holdings and $40.7 million at CompoSecure Holdings[177]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $126.9 million, an increase of $18.8 million compared to $108.0 million for the same period in 2024[186]. - Cash used in investing activities for the nine months ended September 30, 2025, was $53.2 million, significantly higher than $5.5 million for the same period in 2024[187]. - Cash used in financing activities for the nine months ended September 30, 2025, was $47.0 million, a decrease from $95.9 million in the same period in 2024[188]. - The company believes that cash flows from operations and available cash and cash equivalents are sufficient to meet liquidity needs for at least the next 12 months[178]. Debt and Financing - Total debt principal outstanding at CompoSecure Holdings was $190.0 million as of September 30, 2025[177]. - Resolute Holdings has a $5.0 million revolving credit facility, which had no amounts drawn as of September 30, 2025[182]. - CompoSecure Holdings has a credit facility with a maximum borrowing capacity of $330 million, with $190.0 million of total debt outstanding as of September 30, 2025[183]. - The CompoSecure Holdings Credit Facility requires quarterly principal payments and has a maturity date of August 7, 2029[184]. - The Company has purchase commitments with a supplier of approximately $1.1 million for the remainder of 2025 and $7.7 million for 2026[189]. - CompoSecure Holdings was in compliance with all covenants of the CompoSecure Holdings Credit Facility as of September 30, 2025[185]. Interest Rate Risk - The Company is exposed to interest rate risk on its variable rate debt and related interest rate swap agreements[191]. - An increase or decrease of 100 basis points in the applicable interest rate would result in an annual change in interest expense of approximately $1.9 million[192]. - CompoSecure Holdings entered into an interest rate swap agreement effective December 5, 2023, with a notional amount of $125,000 and a fixed rate of 1.90%[193]. - The fair value of the interest rate swap was determined to be $0.6 million as of September 30, 2025[193]. Management and Consolidation - The company is consolidating CompoSecure Holdings as it is deemed the primary beneficiary of a variable interest entity[134]. - The CompoSecure Management Agreement stipulates a quarterly management fee of 2.5% of CompoSecure Holdings' last 12 months' Adjusted EBITDA[138]. - The company is utilizing non-GAAP financial measures, such as Fee-Related Earnings, to provide additional insights into its financial performance[169].

Financial Performance - Resolute Holdings reported a third quarter net loss attributable to common stockholders of $231,000, resulting in a loss per share of ($0.03) for the three months ended September 30, 2025[2][5][18]. - Fee-Related Earnings for the third quarter were $1,093,000, translating to a Fee-Related Earnings per share of $0.13[5][13]. - Management fees for the third quarter totaled $3,698,000, while selling, general and administrative expenses were $3,960,000, leading to an operating loss of $262,000[5][18]. - Net income for the nine months ended September 30, 2025, increased to $100,318,000 from $82,126,000 in 2024, representing a growth of approximately 22%[20]. - The diluted net income per share attributable to common stockholders for the nine months ended September 30, 2025, was $(0.03), consistent with the previous year's performance[22]. Sales and Profitability - Net sales for the third quarter reached $120,865,000, a 12.9% increase from $107,135,000 in the same period last year[18]. - Gross profit for the third quarter was $71,327,000, compared to $55,408,000 in the prior year, reflecting a 28.7% increase[18]. - Total net sales for the nine months ended September 30, 2025, reached $344,346,000, compared to the previous year's $344,346,000, showing stable performance year-over-year[22]. - Gross profit for the nine months ended September 30, 2025, was $194,674,000, consistent with the previous year's performance[22]. - The company anticipates limited profitability for the year ending December 31, 2025, due to ongoing market and operational challenges[12]. Assets and Liabilities - Total assets increased to $293,173,000 as of September 30, 2025, compared to $201,792,000 as of December 31, 2024, reflecting a growth of approximately 45%[16]. - Current liabilities rose to $70,528,000, up from $50,145,000 at the end of 2024, indicating a 40% increase[16]. - Total liabilities as of September 30, 2025, amounted to $251,592,000, compared to $238,422,000 at the end of 2024, indicating a rise of about 5.5%[26]. - Cash and cash equivalents at the end of the period increased to $98,247,000 from $44,815,000 at the end of the previous year, reflecting a significant increase of approximately 119%[20]. Expenses and Investments - The company reported a decrease in interest expense, with cash paid for interest dropping to $9,883,000 from $16,987,000, a reduction of approximately 42%[20]. - Equity-based compensation expense increased to $19,545,000 for the nine months ended September 30, 2025, compared to $14,598,000 in 2024, marking an increase of about 34%[20]. - The company utilized $53,205,000 in investing activities during the nine months ended September 30, 2025, compared to $5,511,000 in the previous year, indicating a significant increase in investment activity[20]. Equity and Management - The total stockholders' equity improved to $10,831,000 from a deficit of $790,000 at the end of 2024, marking a significant turnaround[16]. - The company is entering into a management agreement with Husky Technologies Limited as part of CompoSecure's planned business combination, which is expected to enhance operational capabilities[3][12].

Core Insights - Resolute Holdings reported a third quarter loss per share of ($0.03) and Non-GAAP Fee-Related Earnings per share of $0.13 for the fiscal third quarter ending September 30, 2025 [1][4]. Financial Performance - Management fees for the three months ended September 30, 2025, were $3.698 million, while for the nine months, they totaled $8.246 million [4]. - Selling, general and administrative expenses for the three months were $3.960 million, and for the nine months, they were $11.690 million [4]. - The company reported an operating loss of $262,000 for the three months and a loss of $3.444 million for the nine months [4]. - Total other income (expense) was $94,000 for the three months and $166,000 for the nine months [4]. - The net loss attributable to common stockholders was $231,000 for the three months and $4.208 million for the nine months [4]. - Fee-Related Earnings were $1.093 million for the three months and $1.186 million for the nine months, with Fee-Related Earnings per share of $0.13 and $0.14 respectively [4][22]. Business Developments - Resolute Holdings is entering into a management agreement with Husky Technologies Limited as part of CompoSecure's planned business combination with Husky [2]. - The financial results of CompoSecure Holdings will be consolidated in accordance with U.S. GAAP due to the spin-off from CompoSecure and the execution of the Management Agreement [3]. Structural Overview - Resolute Holdings operates as an alternative asset management platform, providing management services including capital allocation strategy and operational practices [8]. - The company aims to create long-term value through the Resolute Operating System, which is designed to enhance value at both managed businesses and Resolute Holdings itself [8].

Core Points - Resolute Holdings Management, Inc. will transfer its common stock listing from Nasdaq to the New York Stock Exchange (NYSE) while retaining the ticker symbol "RHLD" [1][2] - The transition to NYSE is expected to enhance visibility for investors and is scheduled to begin trading on September 23, 2025 [2] Company Overview - Resolute Holdings is an alternative asset management platform led by David Cote and Tom Knott, focusing on operating management services, capital allocation strategy, operational practices, and M&A sourcing and execution [3] - The company employs the Resolute Operating System to create long-term value at both managed businesses and Resolute Holdings itself [3]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section emphasizes that forward-looking statements are subject to inherent risks and uncertainties, advising against undue reliance [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements based on management's beliefs and assumptions, which are subject to inherent risks and uncertainties - Forward-looking statements are based on management's beliefs and assumptions and are subject to risks, uncertainties, and assumptions[8](index=8&type=chunk) - Key factors that could cause actual results to differ include the competitive environment, company strategy and growth prospects, general economic and industry trends, dealings with third-party partners, risks related to the CompoSecure Management Agreement, reliance on CompoSecure Holdings, ability to integrate acquisitions, deployment of the Resolute Operating System, personnel retention, CompoSecure Holdings' growth and customer relationships, economic/business/competitive factors, future exchange and interest rates, reputation damage, legal/regulatory compliance, cybersecurity, legal proceedings, tax matters, transition to a standalone public company, and global economic/political developments[9](index=9&type=chunk)[11](index=11&type=chunk) - The Company undertakes no obligation to update or revise publicly any forward-looking statements, except as required by law[10](index=10&type=chunk) [Part I. Financial Information](index=6&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's financial performance and position through consolidated statements and detailed notes [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | **Assets** | | | | Cash and cash equivalents | $99,862 | $71,589 | | Accounts receivable | $69,260 | $47,449 | | Total current assets | $217,066 | $166,591 | | Total assets | $253,291 | $201,792 | | **Liabilities & Equity** | | | | Accounts payable | $14,390 | $5,691 | | Total current liabilities | $63,876 | $50,145 | | Long-term debt, net | $177,071 | $184,389 | | Total liabilities | $249,150 | $238,422 | | Total stockholders' equity (deficit) | $9,611 | $(790) | | Total equity (deficit) | $4,141 | $(36,630) | - Total assets increased by **$51,499 thousand (25.5%)** from December 31, 2024, to June 30, 2025[13](index=13&type=chunk) - Total equity (deficit) significantly improved from a deficit of **$(36,630) thousand** to a positive **$4,141 thousand**[13](index=13&type=chunk) [Consolidated Statements of Operations (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section outlines the company's financial performance over periods, reporting net sales, gross profit, and net income or loss Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $119,592 | $108,567 | $223,481 | $212,577 | | Gross profit | $68,800 | $56,072 | $123,347 | $111,285 | | Income from operations | $40,633 | $33,391 | $66,254 | $65,834 | | Net income (loss) | $38,297 | $27,902 | $60,912 | $54,288 | | Net income (loss) attributable to common stockholders | $(611) | $— | $(3,977) | $— | | Net income (loss) per share - basic & diluted | $(0.07) | $— | $(0.47) | $— | - Net sales increased by **10.15%** for the three months ended June 30, 2025, and by **5.13%** for the six months ended June 30, 2025, compared to the prior year periods[14](index=14&type=chunk) - Gross profit increased by **22.69%** for the three months and **10.84%** for the six months ended June 30, 2025, year-over-year[14](index=14&type=chunk) - The company reported a net loss attributable to common stockholders of **$(611) thousand** and **$(3,977) thousand** for the three and six months ended June 30, 2025, respectively, compared to zero in the prior year periods[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) This section presents net income alongside other comprehensive income items, such as unrealized gains or losses on derivatives Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) including non-controlling interests | $38,297 | $27,902 | $60,912 | $54,288 | | Unrealized gain (loss) on derivative - interest rate swap | $(619) | $(564) | $(1,372) | $(77) | | Comprehensive income (loss) including non-controlling interests | $37,678 | $27,338 | $59,540 | $54,211 | | Comprehensive income (loss) attributable to common stockholders | $(611) | $— | $(3,977) | $— | - Unrealized losses on derivative interest rate swaps increased significantly for the six months ended June 30, 2025, to **$(1,372) thousand** from **$(77) thousand** in the prior year[16](index=16&type=chunk) [Consolidated Statements of Stockholders Equity (Deficit) (Unaudited)](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders%20Equity%20(Deficit)%20(Unaudited)) This section details changes in equity, including contributions, net income, and distributions, reflecting the company's ownership structure Consolidated Statements of Stockholders' Equity (Deficit) Highlights (in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :---------------- | :------------ | | Total Stockholders' Equity (Deficit) | $(790) | $9,611 | | Non-controlling interest | $(35,840) | $(5,470) | | Total Equity (Deficit) | $(36,630) | $4,141 | - Total equity (deficit) improved from **$(36,630) thousand** at December 31, 2024, to **$4,141 thousand** at June 30, 2025, driven by contributions from CompoSecure Holdings and equity-based compensation, partially offset by net loss and distributions[18](index=18&type=chunk) - Additional paid-in capital increased from **$1,544 thousand** to **$15,922 thousand**, reflecting equity-based compensation and contributions by CompoSecure Holdings[18](index=18&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section reports cash inflows and outflows from operating, investing, and financing activities, showing liquidity changes Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $67,288 | $71,760 | | Net cash used in investing activities | $(2,798) | $(3,527) | | Net cash used in financing activities | $(36,217) | $(79,352) | | Net increase (decrease) in cash and cash equivalents | $28,273 | $(11,119) | | Cash and cash equivalents, end of period | $99,862 | $27,072 | - Net cash provided by operating activities decreased by **$4,472 thousand (6.23%)** for the six months ended June 30, 2025, compared to the prior year[20](index=20&type=chunk) - Net cash used in financing activities significantly decreased by **$43,135 thousand (54.36%)** for the six months ended June 30, 2025, primarily due to lower distributions to CompoSecure Holdings members[20](index=20&type=chunk) - Cash and cash equivalents at the end of the period increased to **$99,862 thousand** from **$27,072 thousand** year-over-year[20](index=20&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the consolidated financial statements, clarifying accounting policies [1. Description of Organization and Business Operations](index=11&type=section&id=1.%20DESCRIPTION%20OF%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) This note describes the company's formation, business model, and the spin-off of CompoSecure Holdings, detailing the management agreement - Resolute Holdings Management, Inc. (RHLD) was formed on September 27, 2024, to provide operating management services to CompoSecure Holdings, L.L.C. and other future managed companies, aiming to generate recurring management fees[21](index=21&type=chunk) - CompoSecure Holdings, a manufacturer and designer of metal and composite financial transaction cards, was spun off from CompoSecure, Inc. on February 28, 2025, with RHLD shares distributed to CompoSecure Class A Common Stockholders[22](index=22&type=chunk)[24](index=24&type=chunk) - RHLD consolidates CompoSecure Holdings as a Variable Interest Entity (VIE) due to a management agreement, despite not owning equity interests in CompoSecure Holdings[25](index=25&type=chunk) - RHLD receives a quarterly management fee equal to **2.5%** of CompoSecure Holdings' last 12 months' Adjusted EBITDA, as defined in the CompoSecure Management Agreement[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and consolidation policies - The financial statements are prepared in accordance with U.S. GAAP and SEC rules, with all dollar amounts in thousands unless otherwise noted[30](index=30&type=chunk) - CompoSecure Holdings is consolidated as a VIE, with its assets and liabilities initially measured at amounts carried in CompoSecure's records due to common control[31](index=31&type=chunk) - Revenue is recognized when performance obligations are satisfied, typically upon transfer of control of goods to customers, with contract liabilities of **$1.9 million** as of June 30, 2025[39](index=39&type=chunk) - The Company operates two reportable segments: Resolute Holdings and CompoSecure Holdings, based on distinct operations and the CODM's assessment[47](index=47&type=chunk)[48](index=48&type=chunk) - Software development costs are capitalized after the preliminary project stage and amortized over one to two years; **$822 thousand** was capitalized for the six months ended June 30, 2025[49](index=49&type=chunk) - Recent accounting pronouncements include ASU 2025-03 (determining accounting acquirer in VIE acquisition), ASU 2024-03 (expense disaggregation disclosures), ASU 2023-07 (improvements to reportable segment disclosures, adopted by the Company), and ASU 2023-09 (improvements to income tax disclosures)[53](index=53&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [3. Equity-Based Compensation](index=20&type=section&id=3.%20EQUITY-BASED%20COMPENSATION) This note details the company's equity compensation plans, including expense recognition and unrecognized costs for restricted stock units Total Equity-Based Compensation Expense (in thousands) | Plan | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Resolute Equity Plan | $43 | $— | $51 | $— | | CompoSecure Equity Plan | $6,359 | $5,043 | $12,397 | $9,210 | | **Total** | **$6,402** | **$5,043** | **$12,448** | **$9,210** | - Total equity-based compensation expense increased by **26.9%** for the three months and **35.16%** for the six months ended June 30, 2025, primarily due to the CompoSecure Equity Plan[59](index=59&type=chunk) - Unrecognized compensation cost for restricted stock units under the CompoSecure Equity Plan totaled **$40,545 thousand** as of June 30, 2025, to be recognized over approximately **4.8 years**[61](index=61&type=chunk) [4. Income Taxes](index=23&type=section&id=4.%20INCOME%20TAXES) This note provides information on the company's income tax provision and effective tax rate, explaining deviations from the statutory rate Income Tax Provision and Effective Tax Rate | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $299 | $0 | $867 | $0 | | Effective tax rate | 0.8% | 0% | 1.4% | 0% | - The effective tax rate differs from the U.S. statutory rate primarily due to the non-controlling interest adjustment, as income attributable to non-controlling interest in CompoSecure Holdings is pass-through income[66](index=66&type=chunk) [5. Earnings (Loss) Per Share](index=24&type=section&id=5.%20EARNINGS%20(LOSS)%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share, including the impact of anti-dilutive awards Net Income (Loss) Per Share Attributable to Common Stockholders | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common stockholders | $(611) | $— | $(3,977) | $— | | Weighted average common shares outstanding (in thousands) | 8,526 | 8,526 | 8,526 | 8,526 | | Net income (loss) per share attributable to common stockholders - basic & diluted | $(0.07) | $— | $(0.47) | $— | - The company reported a basic and diluted net loss per share of **$(0.07)** and **$(0.47)** for the three and six months ended June 30, 2025, respectively, compared to zero in the prior year periods[69](index=69&type=chunk) - All Resolute Equity Plan awards outstanding as of June 30, 2025, were anti-dilutive and thus excluded from diluted EPS calculation[69](index=69&type=chunk)[70](index=70&type=chunk) [6. Inventories](index=24&type=section&id=6.%20INVENTORIES) This note details the composition of inventories, including raw materials, work in process, finished goods, and the inventory reserve Inventory Composition (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------------ | | Raw materials | $43,873 | $46,109 | | Work in process | $2,760 | $1,024 | | Finished goods | $1,509 | $505 | | Inventory reserve | $(3,903) | $(2,805) | | **Total** | **$44,239** | **$44,833** | - Raw materials decreased by **$2,236 thousand**, while work in process and finished goods increased, indicating a shift in inventory stages[71](index=71&type=chunk) - The inventory reserve for slow-moving or obsolete amounts increased by **$1,098 thousand**[71](index=71&type=chunk) [7. Property and Equipment](index=25&type=section&id=7.%20PROPERTY%20AND%20EQUIPMENT) This note provides a breakdown of property and equipment, net of accumulated depreciation, and related depreciation expenses Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Machinery and equipment | $40,096 | $38,012 | | Leasehold improvements | $12,704 | $11,711 | | Construction in progress | $1,167 | $2,664 | | Total | $56,248 | $54,272 | | Less: Accumulated depreciation and amortization | $(35,067) | $(30,824) | | **Property and equipment, net** | **$21,181** | **$23,448** | - Net property and equipment decreased by **$2,267 thousand (9.67%)** from December 31, 2024, to June 30, 2025, primarily due to increased accumulated depreciation and a decrease in construction in progress[72](index=72&type=chunk) - Depreciation and amortization expense for property and equipment was **$4,243 thousand** for the six months ended June 30, 2025, a decrease from **$4,601 thousand** in the prior year period[72](index=72&type=chunk) [8. Debt](index=25&type=section&id=8.%20DEBT) This note describes the company's debt instruments, including revolving credit facilities, term loans, and interest rate swap agreements - Resolute Holdings entered into a **$5,000 thousand** senior secured revolving credit facility on February 28, 2025, maturing May 31, 2026, with no outstanding balance as of June 30, 2025[73](index=73&type=chunk)[74](index=74&type=chunk) - CompoSecure Holdings has a credit facility with a **$200,000 thousand** term loan and a **$130,000 thousand** revolving credit facility, maturing August 7, 2029. The effective interest rate was **6.87%** at June 30, 2025[75](index=75&type=chunk)[78](index=78&type=chunk) CompoSecure Holdings Term Loan Balance (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Loan Balance | $192,500 | $197,500 | | Less: current portion of term loan | $(13,750) | $(11,250) | | Less: net deferred financing costs | $(1,679) | $(1,861) | | **Total Long Term debt** | **$177,071** | **$184,389** | - CompoSecure Holdings was in compliance with all financial covenants as of June 30, 2025[78](index=78&type=chunk) - An interest rate swap agreement with a notional amount of **$125,000 thousand** is in place to hedge variable interest rate fluctuations, with a fair value of **$1,377 thousand** as of June 30, 2025[82](index=82&type=chunk)[83](index=83&type=chunk) - All Exchangeable Notes, with an aggregate principal amount of **$130,000 thousand**, were exchanged for CompoSecure Class A Common Stock prior to November 29, 2024, and were extinguished[85](index=85&type=chunk) [9. Equity Structure](index=29&type=section&id=9.%20EQUITY%20STRUCTURE) This note outlines the company's authorized and outstanding common stock, the impact of the spin-off, and non-controlling interests - As of June 30, 2025, the Company had **1,000,000,000** shares of common stock authorized, with **8,525,998** shares issued and outstanding[88](index=88&type=chunk) - The Spin-Off on February 28, 2025, resulted in the distribution of **8,525,998** common shares of Resolute Holdings to CompoSecure's Class A Common Stockholders[89](index=89&type=chunk) - Non-controlling interest represents equity interests in CompoSecure Holdings held by CompoSecure, which is reflected in the consolidated financial statements due to RHLD being the primary beneficiary of CompoSecure Holdings (a VIE)[90](index=90&type=chunk) [10. Leases](index=29&type=section&id=10.%20LEASES) This note details the company's operating lease commitments, lease expenses, and the present value of lease liabilities - The Company leases office and manufacturing space, recognizing lease expense on a straight-line basis over lease terms ranging from one to nine years[91](index=91&type=chunk)[93](index=93&type=chunk) Total Lease Cost (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $678 | $581 | $1,334 | $1,168 | | Variable lease cost | $254 | $218 | $549 | $458 | | **Total lease cost** | **$932** | **$799** | **$1,883** | **$1,626** | - Future minimum commitments under non-cancelable operating leases total **$12,632 thousand**, with a present value of lease liabilities of **$10,362 thousand** as of June 30, 2025[95](index=95&type=chunk) [11. Retirement Plans](index=30&type=section&id=11.%20RETIREMENT%20PLANS) This note describes the company's 401(k) plans and matching contributions, along with the associated retirement plan expenses - Both Resolute Holdings and CompoSecure Holdings offer 401(k) profit sharing plans with matching contributions[96](index=96&type=chunk) Retirement Plan Expense (in thousands) | Period | Retirement Plan Expense | | :------------------------------- | :---------------------- | | Three months ended June 30, 2025 | $616 | | Three months ended June 30, 2024 | $461 | | Six months ended June 30, 2025 | $1,473 | | Six months ended June 30, 2024 | $1,052 | - Retirement plan expense increased by **33.62%** for the three months and **39.92%** for the six months ended June 30, 2025, year-over-year[97](index=97&type=chunk) [12. Fair Value Measurements](index=31&type=section&id=12.%20FAIR%20VALUE%20MEASUREMENTS) This note provides fair value information for derivative instruments, specifically the interest rate swap, and its impact on comprehensive income Fair Value of Derivative Asset - Interest Rate Swap (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Derivative asset - interest rate swap | $1,377 | $2,749 | - The fair value of the interest rate swap derivative asset decreased by **$1,372 thousand** from December 31, 2024, to June 30, 2025[99](index=99&type=chunk) - The interest rate swap is designated as a cash flow hedge to manage interest rate risk on variable rate debt, with unrealized changes in fair value reflected in other comprehensive income[100](index=100&type=chunk) [13. Segments](index=31&type=section&id=13.%20SEGMENTS) This note presents financial information for the company's two reportable segments, including net sales and income from operations - The Company operates two reportable segments: Resolute Holdings and CompoSecure Holdings, which are distinct operating businesses consolidated for U.S. GAAP[101](index=101&type=chunk) - Resolute Holdings' sole source of revenue is management fees from CompoSecure Holdings, which are eliminated in consolidation[102](index=102&type=chunk) Segment Net Sales (in thousands) | Segment | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :---------------- | :------------------------------- | :----------------------------- | | Resolute Holdings | $3,419 | $4,548 | | CompoSecure Holdings | $119,592 | $223,481 | | Eliminations | $(3,419) | $(4,548) | | **Consolidated** | **$119,592** | **$223,481** | Segment Income from Operations (in thousands) | Segment | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :---------------- | :------------------------------- | :----------------------------- | | Resolute Holdings | $(385) | $(3,182) | | CompoSecure Holdings | $41,018 | $67,626 | | Eliminations | $— | $1,810 | | **Consolidated** | **$40,633** | **$66,254** | [14. Variable Interest Entities](index=34&type=section&id=14.%20VARIABLE%20INTEREST%20ENTITIES) This note explains the consolidation of CompoSecure Holdings as a Variable Interest Entity due to the management agreement - CompoSecure Holdings is deemed a VIE in which Resolute Holdings is the primary beneficiary, requiring consolidation due to the management agreement[107](index=107&type=chunk)[108](index=108&type=chunk) - Resolute Holdings has no direct ownership interest in CompoSecure Holdings, and creditors of each entity have no recourse to the assets or liabilities of the other[108](index=108&type=chunk)[109](index=109&type=chunk) [15. Geographic Information and Concentrations](index=36&type=section&id=15.%20GEOGRAPHIC%20INFORMATION%20AND%20CONCENTRATIONS) This note provides a breakdown of net sales by region and highlights significant customer concentrations in revenue and receivables Net Sales by Region (in thousands) | Region | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic | $104,303 | $85,184 | $193,836 | $177,974 | | International | $15,289 | $23,383 | $29,645 | $34,603 | | **Total** | **$119,592** | **$108,567** | **$223,481** | **$212,577** | - Domestic sales increased by **22.44%** for the three months and **8.91%** for the six months ended June 30, 2025, while international sales decreased by **34.61%** and **14.33%** respectively[110](index=110&type=chunk) - Three customers accounted for **67.2%** and **76.6%** of total revenue for the three months ended June 30, 2025 and 2024, respectively, indicating significant customer concentration[111](index=111&type=chunk) - Four customers accounted for approximately **76%** of accounts receivable as of June 30, 2025[112](index=112&type=chunk) [16. Commitments and Contingencies](index=37&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's non-cancelable operating lease commitments and potential liabilities from legal disputes and claims - The Company has non-cancelable operating leases with **$12,632 thousand** in minimum undiscounted future lease payments[114](index=114&type=chunk) - The Company may be subject to various disputes and claims arising from normal business activities and accrues for probable and estimable legal liabilities[115](index=115&type=chunk) [17. Related Party Transactions](index=37&type=section&id=17.%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions and agreements between Resolute Holdings and CompoSecure, both under common control, following the spin-off - Resolute Holdings and CompoSecure are under common control by Tungsten 2024 LLC and its affiliates[116](index=116&type=chunk) - Agreements related to the Spin-Off include a Separation and Distribution Agreement, a Letter Agreement delegating authority for CompoSecure equity issuances to Resolute Holdings, a Registration Rights Agreement, and a U.S. State and Local Tax Sharing Agreement[117](index=117&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - CompoSecure Holdings made **$15,933 thousand** in distributions to CompoSecure during the three and six months ended June 30, 2025[126](index=126&type=chunk) [18. Subsequent Events](index=39&type=section&id=18.%20SUBSEQUENT%20EVENTS) This note describes significant events occurring after the balance sheet date, including new tax legislation and its potential impact - The One, Big, Beautiful Bill Act (OBBB) was signed into law on July 4, 2025, permanently extending certain tax provisions and restoring favorable tax treatment for businesses[127](index=127&type=chunk) - The Company is evaluating the OBBB's impact but expects it will likely not materially affect its financial statements[127](index=127&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, focusing on the business model and key performance metrics [Overview](index=41&type=section&id=Overview) This overview describes Resolute Holdings' business model of providing management services to CompoSecure Holdings, a VIE - Resolute Holdings Management, Inc. (RHLD) aims to provide operating management services to CompoSecure Holdings and other companies to generate recurring management fees[130](index=130&type=chunk) - RHLD consolidates CompoSecure Holdings as a Variable Interest Entity (VIE) due to the management agreement, despite not holding equity interests[131](index=131&type=chunk) - CompoSecure Holdings specializes in innovative, customized financial payment card products for banks and issuers globally, with a niche in the financial technology market[132](index=132&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) This section highlights the recent spin-off of Resolute Holdings and the subsequent management agreement with CompoSecure Holdings - On February 28, 2025, CompoSecure completed the Spin-Off of Resolute Holdings, distributing one share of RHLD common stock for every twelve shares of CompoSecure Class A Common Stock[133](index=133&type=chunk) - In connection with the Spin-Off, Resolute Holdings entered into a management agreement with CompoSecure Holdings, requiring RHLD to consolidate CompoSecure Holdings for financial reporting[134](index=134&type=chunk) - Resolute Holdings receives a quarterly management fee equal to **2.5%** of CompoSecure Holdings' last 12 months' Adjusted EBITDA, with an initial term of **10 years**[135](index=135&type=chunk)[137](index=137&type=chunk) [Economic Conditions - Globally and in the Digital Asset Marketplace](index=43&type=section&id=Economic%20Conditions%20-%20Globally%20and%20in%20the%20Digital%20Asset%20Marketplace) This section addresses the impact of global economic trends and digital asset market cycles on the company's financial performance - The Company's financial performance is subject to global economic trends and developments impacting CompoSecure Holdings, including market cycles affecting the ramp-up of its Arculus offering[138](index=138&type=chunk) [Key Components of Results of Operations](index=43&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section defines the primary drivers of financial results, including net sales from product sales, cost of sales, and operating expenses - Net sales primarily reflect revenue from CompoSecure Holdings' product sales (metal cards, Prelams), with RHLD's management fee revenue eliminated in consolidation[139](index=139&type=chunk) - Cost of sales includes direct and indirect manufacturing costs, raw materials, labor, equipment, and operational overhead[140](index=140&type=chunk) - Operating expenses mainly comprise selling, general, and administrative expenses for both Resolute Holdings and CompoSecure Holdings, including personnel, professional services, and marketing[142](index=142&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the current and prior year periods [Three months ended June 30, 2025 vs. three months ended June 30, 2024](index=45&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20three%20months%20ended%20June%2030%2C%202024) This subsection compares key financial metrics for the three-month periods, highlighting changes in sales, profit, and expenses Financial Performance (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--------------------------------------- | :----- | :----- | :------- | :------- | | Net sales | $119,592 | $108,567 | $11,025 | 10% | | Gross profit | $68,800 | $56,072 | $12,728 | 23% | | Operating expenses | $28,167 | $22,681 | $5,486 | 24% | | Income from operations | $40,633 | $33,391 | $7,242 | 22% | | Net (loss) income | $38,297 | $27,902 | $10,395 | 37% | | Net income (loss) attributable to common stockholders | $(611) | $— | $(611) | n/a % | | Gross Margin | 58% | 52% | | | | Operating margin | 34% | 31% | | | - Net sales increased by **$11.0 million (10%)** driven by a **22%** increase in domestic sales, partially offset by a **35%** decrease in international sales due to timing of customer orders[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Gross profit increased by **$12.7 million (23%)**, and gross margin improved to **58%** from **52%**, due to higher volumes, mix, and improved operational execution[151](index=151&type=chunk) - Operating expenses increased by **$5.5 million (24%)** primarily due to incremental salaries and equity-based compensation from hiring at Resolute Holdings[152](index=152&type=chunk) - Other expense decreased by **$3.4 million (63%)** due to lower interest expense following the extinguishment of Exchangeable Notes in Q4 2024[154](index=154&type=chunk) [Six months ended June 30, 2025 vs. six months ended June 30, 2024](index=48&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20vs.%20six%20months%20ended%20June%2030%2C%202024) This subsection compares key financial metrics for the six-month periods, detailing changes in sales, profit, and expenses Financial Performance (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--------------------------------------- | :----- | :----- | :------- | :------- | | Net sales | $223,481 | $212,577 | $10,904 | 5% | | Cost of sales | $100,134 | $101,292 | $(1,158) | (1)% | | Gross profit | $123,347 | $111,285 | $12,062 | 11% | | Operating expenses | $57,093 | $45,451 | $11,642 | 26% | | Income from operations | $66,254 | $65,834 | $420 | 1% | | Net (loss) income | $60,912 | $54,288 | $6,624 | 12% | | Net income (loss) attributable to common stockholders | $(3,977) | $— | $(3,977) | n/a % | | Gross Margin | 55% | 52% | | | | Operating margin | 30% | 31% | | | - Net sales increased by **$10.9 million (5%)** driven by a **9%** increase in domestic sales, partially offset by a **14%** decrease in international sales[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Gross profit increased by **$12.1 million (11%)**, and gross margin improved to **55%** from **52%**, due to higher volumes, mix, and improved operational execution[161](index=161&type=chunk) - Operating expenses increased by **$11.6 million (26%)** primarily due to incremental salaries and equity-based compensation from hiring at Resolute Holdings[162](index=162&type=chunk) - Other expense decreased by **$7.1 million (61%)** due to lower interest expense following the extinguishment of Exchangeable Notes in Q4 2024[164](index=164&type=chunk) [Segments](index=50&type=section&id=Segments) This section presents the financial performance of the Resolute Holdings and CompoSecure Holdings segments, including net income or loss Segment Net Income (Loss) (Six Months Ended June 30, 2025, in thousands) | Segment | Net Income (Loss) | | :---------------- | :------------------ | | Resolute Holdings | $(3,977) | | CompoSecure Holdings | $63,079 | | Eliminations | $1,810 | | **Consolidated** | **$60,912** | - Resolute Holdings reported a net loss of **$(3,977) thousand**, while CompoSecure Holdings generated a net income of **$63,079 thousand** for the six months ended June 30, 2025[167](index=167&type=chunk) [Use of Non-GAAP Financial Measures](index=50&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP financial measures like Fee-Related Earnings (FRE) to assess performance, with reconciliation to GAAP - The Company uses non-GAAP financial measures like Fee-Related Earnings (FRE) and FRE per share to evaluate financial performance, calculated by adjusting net income (loss) attributable to common stockholders for equity-based compensation, pro forma management fees, Spin-Off costs, and net tax impact[168](index=168&type=chunk) Non-GAAP Fee-Related Earnings (in thousands, except per share) | Metric | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :----------------------------- | | Net income (loss) attributable to common stockholders | $(611) | $(3,977) | | Add: Equity-based compensation expensed at Resolute Holdings under CompoSecure Equity Plan | $1,310 | $2,458 | | Add: Pro forma management fees from Jan 1, 2025 to Feb 27, 2025 | $— | $2,046 | | Add: Spin-Off costs | $— | $290 | | Net tax impact of adjustments | $— | $(724) | | **Fee-Related Earnings** | **$699** | **$93** | | **Fee-Related Earnings per share** | **$0.08** | **$0.01** | - FRE per share was **$0.08** for the three months and **$0.01** for the six months ended June 30, 2025[169](index=169&type=chunk) [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the significant accounting policies and estimates that require management judgment, particularly regarding variable interest entities - Critical accounting policies are detailed in the Company's Annual Report on Form 10-K for 2024, with new policies including reclassifications and variable interest entities[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The Company evaluates contractual and ownership interests to determine if an entity is a VIE and if it is the primary beneficiary, requiring consolidation[173](index=173&type=chunk) [New Accounting Pronouncements](index=53&type=section&id=New%20Accounting%20Pronouncements) This section refers to the notes to financial statements for details on recently adopted and upcoming accounting standards - Information on recent accounting pronouncements is provided in Note 2 of the Notes to Financial Statements[175](index=175&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's liquidity position, including cash sources, debt, and cash flow from operations - Resolute Holdings' liquidity sources are the CompoSecure Management Agreement, existing cash, and a **$5.0 million** revolving credit facility; CompoSecure Holdings' sources are cash, operations, and its term loan/revolving credit facility[176](index=176&type=chunk)[178](index=178&type=chunk) Cash and Debt Balances (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $99,862 | $71,600 | | Debt principal outstanding | $192,500 | $197,500 | - Resolute Holdings and CompoSecure Holdings are distinct legal entities with non-recourse debt, requiring separate liquidity management[178](index=178&type=chunk) - Net cash provided by operating activities decreased by **$4.5 million** to **$67.3 million** for the six months ended June 30, 2025, primarily due to increased receivables[185](index=185&type=chunk) - Net cash used in financing activities decreased significantly to **$36.2 million** from **$79.4 million** year-over-year, mainly due to lower distributions to CompoSecure[187](index=187&type=chunk)[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risks, primarily interest rate risk on its variable rate debt - The Company is exposed to interest rate risk on **$192.5 million** of variable rate debt outstanding under the CompoSecure Holdings Credit Facility as of June 30, 2025[192](index=192&type=chunk) - A **100 basis point** increase or decrease in the applicable interest rate would result in an approximate **$1.9 million** annual change in interest expense[193](index=193&type=chunk) - CompoSecure Holdings uses an interest rate swap agreement with a notional amount of **$125,000 thousand** and a fixed rate of **1.90%** to hedge against variable interest rate fluctuations, designated as an effective cash flow hedge[194](index=194&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the Company's disclosure controls and procedures, concluding they were functioning effectively as of June 30, 2025 - The Company's disclosure controls and procedures were functioning effectively as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[195](index=195&type=chunk)[196](index=196&type=chunk) - During the six months ended June 30, 2025, the Company implemented new corporate and governance functions (e.g., external reporting, treasury, stock administration) to meet regulatory requirements as a standalone public company following the Spin-Off[198](index=198&type=chunk) [Part II. Other Information](index=59&type=section&id=Part%20II.%20Other%20Information) This section provides additional disclosures not covered in the financial statements, including legal matters, risk factors, and equity transactions [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section states that as of July 25, 2025, the Company was not a party to any material pending legal proceedings, beyond routine claims incidental to its business - As of July 25, 2025, the Company was not involved in any material pending legal proceedings, other than ordinary routine claims[201](index=201&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section updates the Company's risk factors, noting no material changes since the 2024 Form 10-K, except for the added risk concerning tariffs and other restrictions on imported goods - No material changes to risk factors since the 2024 Form 10-K, except for the added risk of tariffs and other restrictions on imported goods[202](index=202&type=chunk) - Tariffs and trade restrictions, particularly from the U.S. government, could materially and adversely affect the Company's business, financial condition, and results of operations by increasing raw material costs and impacting supplier relationships[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities during the three months ended June 30, 2025, and no repurchases under the authorized stock repurchase program - No unregistered sales of equity securities occurred during the three months ended June 30, 2025[204](index=204&type=chunk) - The Board authorized a stock repurchase program on February 8, 2025, but no shares were repurchased during the three and six months ended June 30, 2025[205](index=205&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - There were no defaults upon senior securities[206](index=206&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable[207](index=207&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers informed the Company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or officers reported the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[208](index=208&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements related to the Spin-Off, corporate governance documents, compensation policies, certifications, and XBRL financial data - The exhibit index includes the Separation and Distribution Agreement, Amended and Restated Certificate of Incorporation and Bylaws, Director Compensation Policy, Option Conversion Program, CEO/CFO certifications, and XBRL financial data[210](index=210&type=chunk) [Signatures](index=63&type=section&id=Signatures) This section contains the required certifications and signatures from the company's executive officers, affirming the accuracy of the report [Signatures](index=63&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q, affirming its submission on behalf of Resolute Holdings Management, Inc. by its Chief Executive Officer, Thomas Knott, and Chief Financial Officer, Kurt Schoen, on August 7, 2025 - The report was signed by Thomas Knott, Chief Executive Officer, and Kurt Schoen, Chief Financial Officer, on August 7, 2025[213](index=213&type=chunk)

Financial Performance - Resolute Holdings reported a second quarter loss per share attributable to common stockholders of ($0.07) and Non-GAAP Fee-Related Earnings per share of $0.08[2] - The company experienced a net loss of $611,000 for the second quarter, compared to a net loss of $3,977,000 for the six months ended June 30, 2025[5] - Fee-Related Earnings for the second quarter were $699,000, with Fee-Related Earnings per share of $0.08[5] - Net income for the six months ended June 30, 2025, increased to $60,912,000 from $54,288,000 in 2024, representing an increase of 12.0%[19] - The diluted net income per share attributable to common stockholders for the six months ended June 30, 2025, was $(0.47), consistent with the previous year[22] Revenue and Profitability - The company reported a gross profit of $68,800,000 for the second quarter, compared to $56,072,000 for the same period in 2024[17] - Operating income for the second quarter was $40,633,000, an increase from $33,391,000 in the prior year[17] - Product sales for the six months ended June 30, 2025, reached $223,481,000, with a gross profit of $123,347,000, indicating a gross margin of approximately 55.2%[22] Assets and Liabilities - Total assets increased to $253,291,000 as of June 30, 2025, compared to $201,792,000 as of December 31, 2024[15] - Total liabilities as of June 30, 2025, amounted to $249,150,000, compared to $238,422,000 at the end of 2024, reflecting an increase of 4.0%[26] - Total current assets increased to $217,066,000 as of June 30, 2025, from $166,591,000 at the end of 2024, an increase of 30.2%[26] Cash Flow - Cash and cash equivalents increased to $99,862,000 as of June 30, 2025, up from $71,589,000 at the end of 2024[15] - Net cash provided by operating activities for the six months ended June 30, 2025, was $67,288,000, compared to $71,760,000 in 2024, a decrease of 6.9%[19] - The company reported a net cash used in financing activities of $36,217,000 for the six months ended June 30, 2025, down from $79,352,000 in 2024, a decrease of 54.4%[19] - The company reported a significant reduction in cash paid for interest expense, which was $6,593,000 for the six months ended June 30, 2025, compared to $12,890,000 in 2024, a decrease of 48.8%[19] Expenses and Investments - Management fees for the three months ended June 30, 2025, were $3,419,000, while selling, general and administrative expenses were $3,804,000[5] - Equity-based compensation expense increased to $12,448,000 for the six months ended June 30, 2025, compared to $9,210,000 in 2024, a rise of 35.5%[19] - The company is committed to making necessary investments to improve operations and drive organic growth at CompoSecure[4] Strategic Focus - The company is focused on evaluating new acquisition opportunities and expects limited profitability for the full year 2025[3] - Cash and cash equivalents at the end of the period were $99,862,000, up from $71,589,000 at the beginning of the period, marking an increase of 39.4%[19]

Core Insights - Resolute Holdings reported a second quarter loss per share of ($0.07) and Non-GAAP Fee-Related Earnings per share of $0.08 for the fiscal second quarter ending June 30, 2025 [1][4][5] - The CEO expressed satisfaction with the early results from the implementation of the operating system at CompoSecure and highlighted ongoing evaluations of acquisition opportunities [2][3] - The company is focused on improving operations and driving organic growth while committing to necessary investments for long-term potential [3] Financial Performance - Management fees for the three months ended June 30, 2025, were $3.419 million, while selling, general and administrative expenses were $3.804 million [4] - The net loss attributable to common stockholders for the six months ended June 30, 2025, was ($3.977 million), with a diluted net income per share of ($0.47) [4][17] - Fee-Related Earnings for the second quarter were $0.699 million, translating to Fee-Related Earnings per share of $0.08 [5][24] Operational Highlights - The company is implementing a Resolute Operating System aimed at enhancing value creation across managed businesses [10] - There is a commitment to evaluating a growing list of acquisition opportunities aligned with core investment criteria [3] - The financial results reflect the consolidation of CompoSecure Holdings in accordance with U.S. GAAP, which may not fully represent the standalone business model of Resolute Holdings [3][12] Balance Sheet Overview - As of June 30, 2025, total assets were reported at $253.291 million, an increase from $201.792 million as of December 31, 2024 [15][27] - Current liabilities totaled $63.876 million, with long-term debt net of deferred financing costs at $177.071 million [15][27] - The total stockholders' equity was $4.141 million, a significant improvement from a deficit of ($36.630 million) at the end of 2024 [15][27] Cash Flow Analysis - Net cash provided by operating activities for the six months ended June 30, 2025, was $67.288 million, compared to $71.760 million for the same period in 2024 [20] - Cash and cash equivalents at the end of the period were $99.862 million, up from $71.589 million at the beginning of the period [21] - The company reported net cash used in financing activities of ($36.217 million) for the six months ended June 30, 2025 [20]

Core Insights - Resolute Holdings Management, Inc. has appointed Wayne M. Hewett and Timothy O. Mahoney as independent directors to its Board of Directors, enhancing its leadership team [1][2] Group 1: Board Appointments - Wayne M. Hewett brings extensive experience from his roles at Home Depot, Wells Fargo, and UPS, along with leadership positions at Cambrex Corporation and Quotient Sciences [3] - Timothy O. Mahoney has a strong background in aerospace and defense, having held senior roles at Honeywell and Sikorsky Aircraft, contributing significant operational expertise [4] Group 2: Leadership Statements - David Cote, Executive Chairman, expressed confidence that the new board members will contribute to long-term value creation for Resolute Holdings and its shareholders [2] - Tom Knott, CEO, highlighted the significant experience and capabilities that Hewett and Mahoney bring to the Board, indicating a focus on scaling the platform [5] Group 3: Company Overview - Resolute Holdings is an alternative asset management platform that provides management services, including capital allocation strategy and operational practices, primarily for CompoSecure Holdings [6]

Part I. Financial Information [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents Resolute Holdings' unaudited consolidated financial statements, including balance sheets, operations, comprehensive income, equity, cash flows, and detailed notes [Consolidated Balance Sheets (Unaudited)](index=2&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) The consolidated balance sheets show an increase in total assets and a shift from a total stockholders' deficit to equity as of March 31, 2025, compared to December 31, 2024 | Metric | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Total Assets | 214,288 | 201,792 | | Total Liabilities | 238,294 | 238,422 | | Total Equity (Deficit) | (24,006) | (36,630) | | Cash and cash equivalents | 71,017 | 71,589 | | Accounts receivable | 54,188 | 47,449 | | Inventories, net | 47,501 | 44,833 | | Current portion of long-term debt | 12,500 | 11,250 | [Consolidated Statements of Operations (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) The consolidated statements of operations show a slight decrease in net sales and gross profit, and a notable decrease in income from operations for Q1 2025 compared to Q1 2024 | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :---------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net sales | 103,889 | 104,010 | | Gross profit | 54,547 | 55,213 | | Income from operations | 25,621 | 32,443 | | Net income (loss) attributable to common stockholders | (3,366) | — | | Net income (loss) per share attributable to common stockholders - basic & diluted | (0.39) | — | [Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) The consolidated statements of comprehensive income (loss) reflect net income (loss) including non-controlling interests and other comprehensive income (loss) components | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :---------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net income (loss) including non-controlling interests | 22,615 | 26,386 | | Unrealized gain (loss) on derivative - interest rate swap | (753) | 487 | | Comprehensive income (loss) attributable to common stockholders | (3,366) | — | [Consolidated Statements of Stockholders Equity (Deficit) (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders%20Equity%20(Deficit)%20(Unaudited)) This statement outlines changes in stockholders' equity (deficit) for Q1 2025 and 2024, showing increased additional paid-in capital and reduced accumulated deficit | Metric | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :----------------------------------- | :------------------------------ | :------------------------------- | | Additional paid-in capital | 14,569 | 1,544 | | Accumulated deficit | (5,700) | (2,334) | | Total stockholders' equity (deficit) | 8,869 | (790) | | Non-controlling interest | (32,875) | (35,840) | - Equity-based compensation for the three months ended March 31, 2025, was **$1,156 thousand**[18](index=18&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) The consolidated statements of cash flows indicate a decrease in net cash provided by operating activities and a decrease in net cash used in financing activities for Q1 2025 compared to the prior year | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | 18,368 | 35,668 | | Net cash used in investing activities | (1,156) | (1,613) | | Net cash used in financing activities | (17,784) | (21,978) | | Cash and cash equivalents, end of period | 71,017 | 50,268 | - Payments for taxes related to net share settlement of CompoSecure equity awards significantly increased to **$15,284 thousand** in Q1 2025 from **$3,426 thousand** in Q1 2024[20](index=20&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations and disclosures supporting the consolidated financial statements, covering organization, accounting policies, equity-based compensation, debt, and segment information [1. Description of Organization and Business Operations](index=11&type=section&id=1.%20DESCRIPTION%20OF%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) Resolute Holdings Management, Inc. was formed in September 2024 to provide operating management services to CompoSecure Holdings, which it consolidates as a Variable Interest Entity (VIE) - Resolute Holdings Management, Inc. was formed on **September 27, 2024**, to provide operating management services and generate recurring management fees[21](index=21&type=chunk) - CompoSecure Holdings manufactures and designs complex metal, composite, and proprietary financial transaction cards for global financial institutions[22](index=22&type=chunk) - On **February 28, 2025**, CompoSecure distributed all shares of Resolute Holdings common stock in a pro rata Spin-Off, and Resolute Holdings began trading on Nasdaq under 'RHLD'[24](index=24&type=chunk) - Resolute Holdings consolidates CompoSecure Holdings as a Variable Interest Entity (VIE) because it is deemed the primary beneficiary under the CompoSecure Management Agreement, despite not owning equity interests[25](index=25&type=chunk) - CompoSecure Holdings pays Resolute Holdings a quarterly management fee equal to **2.5%** of its last 12 months' Adjusted EBITDA, with an initial term of **10 years** and automatic renewals[26](index=26&type=chunk)[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the accounting principles, including U.S. GAAP and SEC regulations, used in preparing the consolidated financial statements, explaining consolidation, revenue recognition, and segment reporting - The consolidated financial statements are presented in conformity with U.S. GAAP and SEC rules, with CompoSecure Holdings consolidated as a VIE from **February 28, 2025**[30](index=30&type=chunk)[31](index=31&type=chunk) - Revenue is recognized when performance obligations are satisfied, typically upon transfer of control of goods to customers, with **$540 thousand** recognized from bill and hold arrangements in Q1 2025[37](index=37&type=chunk)[43](index=43&type=chunk) - The Company operates two reportable segments: Resolute Holdings and CompoSecure Holdings, based on distinct operations and the CompoSecure Management Agreement[44](index=44&type=chunk)[45](index=45&type=chunk) - Capitalized software development costs were **$580 thousand** in Q1 2025, with a carrying value of **$1,520 thousand** as of March 31, 2025[46](index=46&type=chunk) - The Company adopted ASU 2023-07 (Segment Disclosures) and is assessing ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [3. Equity-Based Compensation](index=18&type=section&id=3.%20EQUITY-BASED%20COMPENSATION) This note details the equity-based compensation expense, which increased to **$6,046 thousand** in Q1 2025, primarily driven by restricted stock units and performance stock units | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :----------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Total equity-based compensation expense | 6,046 | 4,167 | | Resolute Equity Plan | 8 | — | | CompoSecure Equity Plan | 6,038 | 4,167 | - Unrecognized compensation cost for restricted stock units under the CompoSecure Equity Plan totaled **$45,428 thousand**, expected to be recognized over approximately **3.6 years**[56](index=56&type=chunk) - Unrecognized compensation cost for stock options under the CompoSecure Equity Plan totaled **$10,516 thousand**, expected to be recognized over approximately **3.5 years**[57](index=57&type=chunk) [4. Income Taxes](index=21&type=section&id=4.%20INCOME%20TAXES) The Company recorded an income tax provision of **$568 thousand** for Q1 2025, with an effective tax rate of **2.5%**, primarily due to non-controlling interest and disallowed compensation expenses | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :--------------------- | :----------------------------------------------- | :----------------------------------------------- | | Income tax (expense) | (568) | — | | Effective tax rate | 2.5% | 0% | - The effective tax rate differs from the U.S. statutory rate primarily due to the non-controlling interest adjustment (pass-through income to CompoSecure) and disallowed compensation expense[61](index=61&type=chunk) [5. Earnings (Loss) Per Share](index=22&type=section&id=5.%20EARNINGS%20(LOSS)%20PER%20SHARE) The Company reported a basic and diluted net loss per share attributable to common stockholders of **$(0.39)** for Q1 2025, with potentially dilutive securities excluded due to their anti-dilutive effect | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) attributable to common stockholders ($ in thousands) | (3,366) | — | | Weighted average common shares outstanding | 8,525,998 | 8,525,998 | | Net income (loss) per share attributable to common stockholders - basic & diluted | (0.39) | — | - **16,512** Resolute Equity Plan awards were excluded from the diluted EPS calculation in Q1 2025 due to their anti-dilutive effect[64](index=64&type=chunk) [6. Inventories](index=22&type=section&id=6.%20INVENTORIES) CompoSecure Holdings' net inventories increased to **$47,501 thousand** as of March 31, 2025, from **$44,833 thousand** at December 31, 2024, driven by increases across all inventory classes | Inventory Class | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :------------------ | :------------------------------ | :------------------------------- | | Raw materials | 46,588 | 46,109 | | Work in process | 2,562 | 1,024 | | Finished goods | 1,243 | 505 | | Inventory reserve | (2,892) | (2,805) | | Total Inventories, net | 47,501 | 44,833 | [7. Property and Equipment](index=23&type=section&id=7.%20PROPERTY%20AND%20EQUIPMENT) Net property and equipment decreased to **$21,917 thousand** as of March 31, 2025, from **$23,448 thousand** at December 31, 2024, with Q1 2025 depreciation and amortization expense of **$2,107 thousand** | Asset Class | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :---------------------- | :------------------------------ | :------------------------------- | | Machinery and equipment | 39,212 | 38,012 | | Leasehold improvements | 12,320 | 11,711 | | Construction in progress | 1,181 | 2,664 | | Total, net | 21,917 | 23,448 | - Depreciation and amortization expense for property and equipment was **$2,107 thousand** for the three months ended March 31, 2025, compared to **$2,221 thousand** for the same period in 2024[66](index=66&type=chunk) [8. Debt](index=23&type=section&id=8.%20DEBT) This note details Resolute Holdings' undrawn **$5 million** revolving credit facility and CompoSecure Holdings' **$330 million** credit facility, including a **$195 million** outstanding term loan, and interest rate swap agreements - Resolute Holdings entered into a **$5,000 thousand** senior secured revolving credit facility, maturing **May 31, 2026**, with no outstanding balance as of March 31, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) - CompoSecure Holdings refinanced its credit facility in August 2024, resulting in a **$330,000 thousand** facility comprising a **$200,000 thousand** Term Loan and a **$130,000 thousand** Revolver, maturing **August 7, 2029**[71](index=71&type=chunk) | Debt Component | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :------------------------------------------- | :------------------------------ | :------------------------------- | | CompoSecure Holdings Term Loan Balance | 195,000 | 197,500 | | Current portion of term loan (scheduled payments) | (12,500) | (11,250) | | Net deferred financing costs | (1,787) | (1,861) | | Total Long Term debt | 180,713 | 184,389 | - CompoSecure Holdings had **$130,000 thousand** of availability under its revolving credit facility as of March 31, 2025, with no outstanding balance[77](index=77&type=chunk) - Interest expense related to the CompoSecure Holdings credit facilities was **$2,737 thousand** in Q1 2025, down from **$4,459 thousand** in Q1 2024[75](index=75&type=chunk) - A December 2023 interest rate swap, with a notional amount of **$125,000 thousand** and a fixed rate of **1.90%**, is set to expire in December 2025, with a fair value of **$1,996 thousand** (asset) at March 31, 2025[78](index=78&type=chunk)[79](index=79&type=chunk) - All **$130,000 thousand** Exchangeable Notes were exchanged for CompoSecure Class A Common Stock and extinguished prior to **November 29, 2024**, resulting in **$0** interest expense from these notes in Q1 2025 compared to **$2,396 thousand** in Q1 2024[82](index=82&type=chunk)[84](index=84&type=chunk) [9. Equity Structure](index=29&type=section&id=9.%20EQUITY%20STRUCTURE) This note outlines the authorized and outstanding shares of common stock, the impact of the Spin-Off, and the accounting treatment for non-controlling interest related to CompoSecure Holdings - As of March 31, 2025, Resolute Holdings had **1,000,000,000** shares of common stock authorized and **8,525,998** shares issued and outstanding[85](index=85&type=chunk) - The Spin-Off of Resolute Holdings from CompoSecure was completed on **February 28, 2025**, distributing **8,525,998** common shares[86](index=86&type=chunk) - Non-controlling interest represents equity interests in CompoSecure Holdings held by CompoSecure, reflected due to Resolute Holdings' consolidation of CompoSecure Holdings as a VIE[87](index=87&type=chunk) [10. Leases](index=31&type=section&id=10.%20LEASES) The Company leases office and manufacturing space, recognizing lease expense on a straight-line basis, with a weighted-average remaining lease term of **5.5 years** and lease liabilities of **$10,872 thousand** - The weighted-average remaining lease term for the Company's leases is **5.5 years** as of March 31, 2025, with a weighted-average discount rate of **6.33%**[91](index=91&type=chunk) | Lease Cost Component | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :------------------- | :----------------------------------------------- | :----------------------------------------------- | | Operating lease cost | 656 | 587 | | Variable lease cost | 295 | 240 | | Total lease cost | 951 | 827 | | Future Minimum Commitments | Amount ($ in thousands) | | :------------------------- | :---------------------- | | Total lease payments | 13,311 | | Less: Imputed interest | (2,439) | | Present value of lease liabilities | 10,872 | - Right-of-use assets obtained in exchange for lease obligations (non-cash activity) amounted to **$4,884 thousand** for the three months ended March 31, 2025[94](index=94&type=chunk) [11. Retirement Plans](index=32&type=section&id=11.%20RETIREMENT%20PLANS) Both Resolute Holdings and CompoSecure Holdings offer 401(k) profit sharing plans with matching contributions, leading to an increased retirement plan expense of **$856 thousand** in Q1 2025 | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :--------------------- | :----------------------------------------------- | :----------------------------------------------- | | Retirement plan expense | 856 | 591 | - CompoSecure Holdings increased its 401(k) matching contributions starting **January 2025**[95](index=95&type=chunk) [12. Fair Value Measurements](index=32&type=section&id=12.%20FAIR%20VALUE%20MEASUREMENTS) The Company measures financial assets and liabilities at fair value on a recurring basis, primarily the derivative asset for the interest rate swap, which is classified as Level 2 | Asset/Liability | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Derivative asset - interest rate swap | 1,996 | 2,749 | - The derivative asset for the interest rate swap is classified as a **Level 2** fair value measurement[97](index=97&type=chunk) [13. Segments](index=33&type=section&id=13.%20SEGMENTS) The Company operates two reportable segments: Resolute Holdings and CompoSecure Holdings, with separate and consolidated financial statements presented, highlighting the elimination of intercompany management fees - The Company operates two reportable segments: Resolute Holdings and CompoSecure Holdings, with intercompany management fees eliminated in consolidation[99](index=99&type=chunk)[100](index=100&type=chunk) | Metric ($ in thousands) | Resolute Holdings (Q1 2025) | CompoSecure Holdings (Q1 2025) | Consolidated (Q1 2025) | | :---------------------- | :-------------------------- | :----------------------------- | :--------------------- | | Net sales | 1,129 | 103,889 | 103,889 | | Gross profit | 1,129 | 54,547 | 54,547 | | Income from operations | (2,797) | 26,608 | 25,621 | | Net income (loss) | (3,366) | 24,171 | 22,615 | | Metric ($ in thousands) | Resolute Holdings (Mar 31, 2025) | CompoSecure Holdings (Mar 31, 2025) | Consolidated (Mar 31, 2025) | | :---------------------- | :------------------------------- | :---------------------------------- | :-------------------------- | | Total assets | 11,742 | 203,675 | 214,288 | | Total liabilities | 2,873 | 236,484 | 238,294 | [14. Variable Interest Entities](index=36&type=section&id=14.%20VARIABLE%20INTEREST%20ENTITIES) This note reaffirms CompoSecure Holdings as a VIE, with Resolute Holdings as the primary beneficiary, necessitating consolidation, and clarifies that creditors of each entity have no recourse to the other - CompoSecure Holdings is deemed a Variable Interest Entity (VIE), and Resolute Holdings is the primary beneficiary, leading to its consolidation[107](index=107&type=chunk) - Creditors of Resolute Holdings have no recourse to CompoSecure Holdings' assets or liabilities, and vice versa[107](index=107&type=chunk) - Resolute Holdings has no obligation to provide financial support to CompoSecure Holdings[107](index=107&type=chunk) [15. Geographic Information and Concentrations](index=37&type=section&id=15.%20GEOGRAPHIC%20INFORMATION%20AND%20CONCENTRATIONS) The Company's operations are primarily in the United States, with domestic sales declining and international sales growing, alongside significant customer and vendor concentrations | Net Sales by Region ($ in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Domestic | 89,533 | 92,790 | | International | 14,356 | 11,220 | | Total | 103,889 | 104,010 | - Resolute Holdings' sole customer and source of revenue is CompoSecure Holdings, generating **$1,129 thousand** in management fees from **February 28 to March 31, 2025**[108](index=108&type=chunk) - Three customers accounted for **62.0%** of total revenue in Q1 2025, and three customers accounted for approximately **62%** of accounts receivable as of March 31, 2025[109](index=109&type=chunk) - The Company primarily relied on three vendors that individually accounted for more than **10%** of purchases of supplies for Q1 2025[110](index=110&type=chunk) [16. Commitments and Contingencies](index=39&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) The Company has non-cancelable operating lease commitments totaling **$13,311 thousand** in minimum undiscounted future lease payments and may be involved in various disputes and claims - The Company is party to non-cancelable operating leases with **$13,311 thousand** of minimum undiscounted future lease payments and a present value of **$10,872 thousand**[112](index=112&type=chunk) - The Company accrues for legal matters if a liability is probable and reasonably estimable, expensing litigation costs as incurred[113](index=113&type=chunk) [17. Related Party Transactions](index=39&type=section&id=17.%20RELATED%20PARTY%20TRANSACTIONS) This note details various agreements and transactions with related parties, primarily CompoSecure and entities under common control by Tungsten 2024 LLC, following the Spin-Off - Resolute Holdings and CompoSecure are under common control by Tungsten 2024 LLC and its affiliates[114](index=114&type=chunk) - Key agreements include the CompoSecure Management Agreement, Separation and Distribution Agreement, Letter Agreement, Registration Rights Agreement, and U.S. State and Local Tax Sharing Agreement[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk) - Roger Fradin, through Fradin Consulting LLC, provides advisory services to CompoSecure's board for an annual cash retainer of **$50 thousand** and options worth **$150 thousand**[122](index=122&type=chunk) - SRM Equity Partners, LLC provides executive administration services and office space for approximately **$362 thousand** annually, with **$87 thousand** recognized in Q1 2025[123](index=123&type=chunk) [18. Subsequent Events](index=41&type=section&id=18.%20SUBSEQUENT%20EVENTS) No subsequent events requiring disclosure were reported by the Company - No subsequent events were reported[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Resolute Holdings' business model, recent developments, and an analysis of the Company's financial condition and results of operations for Q1 2025 [Overview](index=43&type=section&id=Overview) Resolute Holdings Management, Inc. aims to provide operating management services to CompoSecure Holdings and other companies, generating recurring management fees, and consolidates CompoSecure Holdings as a VIE - Resolute Holdings' business model is to provide operating management services to generate recurring management fees from CompoSecure Holdings and future managed companies[127](index=127&type=chunk) - Resolute Holdings consolidates CompoSecure Holdings as a VIE, being the primary beneficiary, without owning any equity interests[128](index=128&type=chunk) - CompoSecure Holdings creates innovative, customized financial payment card products for leading international and domestic banks[129](index=129&type=chunk) [Recent Developments](index=43&type=section&id=Recent%20Developments) The Spin-Off of Resolute Holdings from CompoSecure was completed on February 28, 2025, with Resolute Holdings commencing trading on Nasdaq and entering a management agreement with CompoSecure Holdings - The Spin-Off of Resolute Holdings from CompoSecure was completed on **February 28, 2025**, and Resolute Holdings began trading on The Nasdaq Stock Market LLC under 'RHLD'[130](index=130&type=chunk) - Resolute Holdings entered into the CompoSecure Management Agreement, making it responsible for managing CompoSecure Holdings and requiring consolidation for financial reporting[131](index=131&type=chunk) - CompoSecure Holdings will pay Resolute Holdings a quarterly management fee equal to **2.5%** of its last 12 months' Adjusted EBITDA, with an initial term of **10 years** and automatic renewals[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Economic Conditions - Globally and in the Digital Asset Marketplace](index=45&type=section&id=Economic%20Conditions%20-%20Globally%20and%20in%20the%20Digital%20Asset%20Marketplace) The Company's business and financial performance are subject to global economic trends and developments impacting CompoSecure Holdings, including market cycles that create uncertainty in its Arculus offering - The Company's business, financial condition, and results of operations are impacted by trends and developments affecting CompoSecure Holdings[135](index=135&type=chunk) - Market cycles have created uncertainty in the timing of CompoSecure Holdings' planned ramp-up of its Arculus offering[135](index=135&type=chunk) [Key Components of Results of Operations](index=45&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section defines the primary components of the Company's financial statements, including Net Sales, Cost of Sales, Gross Profit, Operating Expenses, Income from Operations, and Other Income (Expense) - Net sales primarily reflect revenue from CompoSecure Holdings' product sales, such as metal cards and Prelams, with Resolute Holdings' management fee revenue eliminated in consolidation[136](index=136&type=chunk) - Cost of sales includes direct and indirect manufacturing costs for CompoSecure Holdings' products, influenced by volume, operational efficiencies, and procurement costs[137](index=137&type=chunk) - Operating expenses are mainly Selling, General, and Administrative (SG&A) expenses for both Resolute Holdings and CompoSecure Holdings, covering personnel, professional services, and other administrative functions[139](index=139&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the Company's financial performance for Q1 2025 versus Q1 2024, detailing changes in net sales, gross profit, operating expenses, income from operations, other income/expense, and income tax expense | Metric ($ in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | $ Change | % Change | | :---------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Net sales | 103,889 | 104,010 | (121) | (0)% | | Gross profit | 54,547 | 55,213 | (666) | (1)% | | Operating expenses | 28,926 | 22,770 | 6,156 | 27% | | Income from operations | 25,621 | 32,443 | (6,822) | (21)% | | Other (expense) income, net | (2,438) | (6,057) | 3,619 | (60)% | | Income tax (expense) | (568) | — | (568) | n/a % | | Net (loss) income | 22,615 | 26,386 | (3,771) | (14)% | | Net income (loss) attributable to common stockholders | (3,366) | — | (3,366) | n/a % | | Margin Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------- | :-------------------------------- | :-------------------------------- | | Gross Margin | 53% | 53% | | Operating margin | 26% | 31% | [Net Sales](index=47&type=section&id=Net%20Sales) Total net sales for Q1 2025 remained relatively flat, with a slight decrease driven by a **4%** decline in domestic sales, largely offset by a **28%** increase in international sales | Net Sales by Region ($ in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | $ Change | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Domestic | 89,533 | 92,790 | (3,257) | (4)% | | International | 14,356 | 11,220 | 3,136 | 28% | | Total | 103,889 | 104,010 | (121) | (0)% | - Domestic net sales decreased primarily due to lower customer acquisition by CompoSecure Holdings' clients, while international sales grew due to increased sales across a larger base of smaller customers[146](index=146&type=chunk)[147](index=147&type=chunk) [Gross Profit and Gross Margin](index=47&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit slightly decreased by **1%** to **$54.5 million** in Q1 2025, but the gross profit margin remained constant at **53%** compared to Q1 2024 | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :------------ | :----------------------------------------------- | :----------------------------------------------- | | Gross profit | 54,547 | 55,213 | | Gross Margin | 53% | 53% | [Operating Expenses](index=47&type=section&id=Operating%20Expenses) Operating expenses increased by **$6.2 million**, or **27%**, in Q1 2025, primarily due to incremental salaries and equity-based compensation from hiring employees at Resolute Holdings | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | | Operating expenses | 28,926 | 22,770 | - The increase was primarily driven by incremental salaries and equity-based compensation expenses from new hires at Resolute Holdings[149](index=149&type=chunk) [Income from Operations and Operating Margin](index=47&type=section&id=Income%20from%20Operations%20and%20Operating%20Margin) Income from operations decreased by **$6.8 million**, or **21%**, to **$25.6 million** in Q1 2025, with the operating margin declining by **5%** to **26%**, primarily due to increased operating expenses | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :------------------- | :----------------------------------------------- | :----------------------------------------------- | | Income from operations | 25,621 | 32,443 | | Operating margin | 26% | 31% | - The decrease in both income from operations and operating margin was primarily attributable to the increase in operating expenses[150](index=150&type=chunk) [Other Income (Expense)](index=47&type=section&id=Other%20Income%20(Expense)) Other expense decreased significantly by **$3.6 million**, or **60%**, to **$2.4 million** in Q1 2025, primarily due to lower interest expense resulting from the exchange and extinguishment of Exchangeable Notes | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Other (expense) income, net | (2,438) | (6,057) | - The decrease in other expense was primarily due to lower interest expense as a result of the Exchangeable Notes being exchanged and extinguished[151](index=151&type=chunk) [Income Tax Expense](index=49&type=section&id=Income%20Tax%20Expense) The Company recorded an income tax expense of **$0.6 million** in Q1 2025, compared to no expense in Q1 2024, due to Resolute Holdings being taxed as a corporation post-Spin-Off | Metric | Three months ended March 31, 2025 ($ in thousands) | Three months ended March 31, 2024 ($ in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Income tax (expense) | (568) | — | - The income tax expense in Q1 2025 is due to Resolute Holdings being taxed as a corporation, unlike CompoSecure Holdings which was a pass-through entity in the prior period[152](index=152&type=chunk) [Segments](index=49&type=section&id=Segments) The segmented results for Q1 2025 show Resolute Holdings generating management fees and a net loss, while CompoSecure Holdings generated product sales and net income, with intercompany fees eliminated in consolidation | Metric ($ in thousands) | Resolute Holdings (Q1 2025) | CompoSecure Holdings (Q1 2025) | Intercompany/Eliminations (Q1 2025) | Consolidated (Q1 2025) | | :---------------------- | :-------------------------- | :----------------------------- | :---------------------------------- | :--------------------- | | Management fees | 1,129 | — | (1,129) | — | | Product sales | — | 103,889 | — | 103,889 | | Net sales | 1,129 | 103,889 | (1,129) | 103,889 | | Income from operations | (2,797) | 26,608 | 1,810 | 25,621 | | Net income (loss) | (3,366) | 24,171 | 1,810 | 22,615 | [Use of Non-GAAP Financial Measures](index=49&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The Company uses Fee-Related Earnings (FRE) and FRE per share as non-GAAP financial measures to evaluate Resolute Holdings' performance, providing a reconciliation to U.S. GAAP net income attributable to common stockholders - Fee-Related Earnings (FRE) and Fee-Related Earnings per share are non-GAAP measures used to evaluate Resolute Holdings' financial performance[154](index=154&type=chunk) - FRE is calculated by adjusting net income (loss) attributable to common stockholders for equity-based compensation, pro forma management fees, one-time Spin-Off costs, and net tax impact[154](index=154&type=chunk) | Metric | Three months ended March 31, 2025 ($ in thousands except per share figures) | | :---------------------------------------------- | :------------------------------------------------------------------------ | | Net income (loss) attributable to common stockholders | (3,366) | | Fee-Related Earnings | (606) | | Fee-Related Earnings per share | (0.07) | [Critical Accounting Policies and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section refers to the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and Note 2 of the current report for detailed information on critical accounting policies and estimates - Critical accounting policies and estimates are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and Note 2 of the current report[157](index=157&type=chunk) [New Accounting Pronouncements](index=51&type=section&id=New%20Accounting%20Pronouncements) This section refers to Note 2 of the Notes to Financial Statements for information concerning recent accounting pronouncements - Information regarding new accounting pronouncements is provided in Note 2 of the Notes to Financial Statements[159](index=159&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity sources include cash balances, operating cash flows, and revolving credit facilities for both Resolute Holdings and CompoSecure Holdings, with sufficient liquidity for the next 12 months - Primary liquidity sources are existing cash, cash flows from operations, and revolving credit facilities for both Resolute Holdings and CompoSecure Holdings[160](index=160&type=chunk) | Metric ($ in millions) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Cash and cash equivalents | 71.0 | 71.6 | | Total debt principal outstanding | 195.0 | 197.5 | - Resolute Holdings and CompoSecure Holdings are distinct legal entities requiring separate liquidity management, with debt at each entity being non-recourse to the other[162](index=162&type=chunk) - Resolute Holdings has a **$5.0 million** revolving credit facility (undrawn) and CompoSecure Holdings has a **$130.0 million** revolving credit facility (undrawn), both deemed sufficient for their respective liquidity needs for the next 12 months[162](index=162&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) [Net Cash Provided by Operations](index=53&type=section&id=Net%20Cash%20Provided%20by%20Operations) Net cash provided by operating activities decreased by **$17.3 million** to **$18.4 million** in Q1 2025, primarily due to higher operating expenses, an increase in receivables, and a decrease in accrued expenses | Metric | Three months ended March 31, 2025 ($ in millions) | Three months ended March 31, 2024 ($ in millions) | | :-------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Net cash provided by operating activities | 18.4 | 35.7 | - The decrease was primarily attributable to higher operating expenses, an increase in receivables, and a decrease in accrued expenses[169](index=169&type=chunk) [Net Cash Used in Investing Activities](index=53&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) Net cash used in investing activities decreased to **$1.2 million** in Q1 2025, primarily related to capital expenditures and capitalized software costs | Metric | Three months ended March 31, 2025 ($ in millions) | Three months ended March 31, 2024 ($ in millions) | | :------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | | Net cash used in investing activities | 1.2 | 1.6 | - Investing activities in Q1 2025 included **$0.6 million** in capital expenditures and **$0.6 million** in capitalized software costs[170](index=170&type=chunk) [Net Cash Used in Financing Activities](index=53&type=section&id=Net%20Cash%20Used%20in%20Financing%20Activities) Net cash used in financing activities decreased to **$17.8 million** in Q1 2025, primarily due to significant payments for taxes related to net share settlement of CompoSecure equity awards and scheduled term loan principal payments | Metric | Three months ended March 31, 2025 ($ in millions) | Three months ended March 31, 2024 ($ in millions) | | :------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | | Net cash used in financing activities | 17.8 | 22.0 | - Key uses of cash in financing activities for Q1 2025 included **$15.3 million** for taxes related to net share settlement of CompoSecure equity awards and **$2.5 million** for term loan principal payments[171](index=171&type=chunk) [Contractual Obligations](index=55&type=section&id=Contractual%20Obligations) A summary of the Company's minimum contractual obligations is included in its Annual Report on Form 10-K, with purchase commitments of approximately **$8.8 million** for the remainder of 2025 and **$2.0 million** for 2026 - The Company has purchase commitments of approximately **$8.8 million** for the remainder of 2025 and **$2.0 million** for 2026[173](index=173&type=chunk) [Financing](index=55&type=section&id=Financing) This section refers to Note 8 of the Consolidated Financial Statements for a comprehensive description of the Company's debt obligations, including the Resolute Credit Facility and the 2024 CompoSecure Holdings Credit Facility - A complete description of the Company's debt obligations is provided in Note 8 of the Consolidated Financial Statements[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, primarily interest rate risk on its variable rate debt, and the use of an interest rate swap agreement to hedge this risk [Interest Rate Risk](index=55&type=section&id=Interest%20Rate%20Risk) The Company is exposed to interest rate risk on its **$195.0 million** variable rate debt, with a **$4.0 million** annual impact for every 100 basis point change, partially hedged by an interest rate swap - The Company has **$195.0 million** in variable rate debt outstanding under the 2024 CompoSecure Holdings Credit Facility as of March 31, 2025[175](index=175&type=chunk) - A **100 basis point** increase or decrease in the applicable interest rate would cause an approximate **$4.0 million** increase or decrease in annual interest expense[176](index=176&type=chunk) - CompoSecure Holdings has an interest rate swap agreement (December 2023 Swap) with a notional amount of **$125,000 thousand** and a fixed rate of **1.90%**, expiring in December 2025, designated as an effective cash flow hedge[177](index=177&type=chunk)[178](index=178&type=chunk) - The fair value of the interest rate swap was **$2.0 million** (asset) at March 31, 2025[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and any changes in internal control over financial reporting, noting effective controls and new corporate function implementation post-Spin-Off [Evaluation of Disclosure Controls and Procedures](index=56&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were functioning effectively as of March 31, 2025, providing reasonable assurance for timely and accurate reporting - The Company's disclosure controls and procedures were evaluated and concluded to be functioning effectively as of March 31, 2025[180](index=180&type=chunk) - The controls are designed to provide reasonable assurance that information required for SEC reports is recorded, processed, summarized, and reported timely[179](index=179&type=chunk) [Changes in Internal Control Over Financial Reporting](index=56&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) During Q1 2025, the Company began implementing new corporate and governance functions to meet regulatory requirements as a standalone public company following the Spin-Off, with no other material changes - The Company commenced implementing new corporate and governance functions (external reporting, treasury, stock administration) during Q1 2025 to meet standalone public company regulatory requirements post-Spin-Off[182](index=182&type=chunk) - No other changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during Q1 2025[182](index=182&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) As of May 12, 2025, the Company was not a party to any material pending legal proceedings, beyond ordinary routine claims incidental to CompoSecure Holdings' business - As of **May 12, 2025**, the Company was not a party to any material pending legal proceedings[184](index=184&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes in risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the three months ended March 31, 2025, and no stock repurchases were made despite a Board-authorized program - There were no unregistered sales of equity securities in the three months ended March 31, 2025[186](index=186&type=chunk) - The Board authorized a stock repurchase program on **February 8, 2025**, but no repurchases were made during the three months ended March 31, 2025[187](index=187&type=chunk) [Item 3. Defaults Upon Senior Securities](index=57&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[188](index=188&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company's operations - Mine Safety Disclosures are not applicable to the registrant[189](index=189&type=chunk) [Item 5. Other Information](index=57&type=section&id=Item%205.%20Other%20Information) This section includes disclosures on Rule 10b5-1 Trading Plans, noting no new adoptions or terminations by directors or officers during the quarter [Rule 10b5-1 Trading Plans](index=57&type=section&id=Rule%2010b5-1%20Trading%20Plans) No directors or officers informed the Company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - None of the Company's directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[190](index=190&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements (e.g., Separation and Distribution, Management, Registration Rights, Tax Sharing), corporate documents, incentive plans, and certifications - Key exhibits include the Separation and Distribution Agreement, Management Agreement, Registration Rights Agreement, and U.S. State and Local Tax Sharing Agreement[192](index=192&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[195](index=195&type=chunk) [Signatures](index=61&type=section&id=Signatures) The report is duly signed on behalf of Resolute Holdings Management, Inc. by its Chief Executive Officer, Thomas Knott, and Chief Financial Officer, Kurt Schoen, on May 12, 2025 - The report was signed by Thomas Knott, Chief Executive Officer, and Kurt Schoen, Chief Financial Officer, on **May 12, 2025**[198](index=198&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) Resolute Holdings reported Q1 2025 financial results post-spin-off, including a net loss per share of ($0.39) and Non-GAAP Fee-Related Earnings per share of ($0.07), with management focusing on strategic growth and M&A [Q1 2025 Financial Highlights (GAAP & Non-GAAP)](index=1&type=section&id=Q1%202025%20Financial%20Highlights%20(GAAP%20%26%20Non-GAAP)) Resolute Holdings reported a net loss attributable to common stockholders of ($0.39) per share and Non-GAAP Fee-Related Earnings per share of ($0.07) for Q1 2025, reflecting the foundational quarter post-spin-off and significant one-time costs Q1 2025 Key Financial Highlights (in thousands) | Metric | | | :------------------------------------------------- | :-------- | | Net income (loss) attributable to common stockholders per share (diluted) | ($0.39) | | Non-GAAP Fee-Related Earnings per share (diluted) | ($0.07) | | Management fees (GAAP) | $1,129 | | Income from operations (GAAP) | ($2,797) | | Net income (loss) (GAAP) | ($3,366) | | Fee-Related Earnings (Non-GAAP) | ($606) | - Resolute Holdings reported first quarter earnings per share attributable to common stockholders of **($0.39)** and Non-GAAP Fee-Related Earnings per share of **($0.07)**[2](index=2&type=chunk) - Management fees for the quarter were **$1,129 thousand**, resulting in an income from operations of **($2,797) thousand** and a net income (loss) of **($3,366) thousand**[5](index=5&type=chunk) [Management Commentary & Strategic Outlook](index=1&type=section&id=Management%20Commentary%20%26%20Strategic%20Outlook) CEO Tom Knott highlighted the completion of the spin-off and the impact of one-time costs, projecting limited full-year profitability with $3.0 million quarterly management fee revenue. Executive Chairman Dave Cote emphasized ongoing operational improvements at CompoSecure and increased M&A evaluation - The spin-off from CompoSecure was completed in February, marking a foundational quarter for Resolute Holdings[3](index=3&type=chunk) - Expectation for limited profitability for the full year with approximately **$3.0 million** of quarterly management fee revenue, despite higher tax provision and post-spin-off professional fees[3](index=3&type=chunk) - Increased efforts to evaluate potential acquisitions, anticipated to remain significant through 2025 and beyond, alongside ongoing work to improve CompoSecure's operations and drive organic growth[4](index=4&type=chunk) [Spin-Off and Business Model Context](index=1&type=section&id=Spin-Off%20and%20Business%20Model%20Context) Due to the spin-off and management agreement, Resolute Holdings consolidates CompoSecure Holdings' financials under GAAP, but clarifies that its standalone business model relies on recurring management fees and fixed expenses, with Non-GAAP Fee-Related Earnings providing a clearer economic view for shareholders - Resolute Holdings is required to consolidate the financial results of CompoSecure Holdings in accordance with U.S. GAAP as a result of the spin-off and execution of the Management Agreement[4](index=4&type=chunk) - The underlying economics of Resolute Holdings' standalone business model consist of recurring, long-duration management fees and a relatively fixed expense base[4](index=4&type=chunk) - Non-GAAP Fee-Related Earnings calculation is included to provide a clear picture of the economic performance directly attributable to shareholders of RHLD[4](index=4&type=chunk) [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) This section provides an overview of Resolute Holdings' asset management platform, outlines cautionary notes regarding forward-looking statements, and explains the use of non-GAAP financial measures for investor clarity [About Resolute Holdings Management, Inc.](index=3&type=section&id=About%20Resolute%20Holdings%20Management%2C%20Inc.) Resolute Holdings is an alternative asset management platform led by David Cote and Tom Knott, providing operating management services, capital allocation, and M&A for CompoSecure Holdings and future managed businesses, aiming for long-term value creation through its Resolute Operating System - Resolute Holdings is an alternative asset management platform that provides operating management services, including oversight of capital allocation strategy, operational practices, and M&A sourcing and execution[9](index=9&type=chunk) - The company aims to create long-term value through the systematic deployment of the Resolute Operating System at both underlying managed businesses and Resolute Holdings[9](index=9&type=chunk) [Cautionary Note Concerning Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Concerning%20Forward-Looking%20Statements) This section serves as a standard disclaimer, stating that forward-looking statements are based on management's beliefs and are subject to inherent risks and uncertainties that could cause actual results to differ materially. It lists various potential influencing factors and clarifies that the company does not undertake to update these statements unless legally required - Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and Resolute Holdings cannot assure that its plans, intentions, or expectations will be achieved or realized[10](index=10&type=chunk) - Important factors that could affect future results include the timing and amount of management fees, unexpected changes in costs, market and macroeconomic developments, and the ability to grow profitably[10](index=10&type=chunk) - Resolute Holdings undertakes no obligations to update or revise publicly any forward-looking statements, except as required by law[10](index=10&type=chunk) [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Resolute Holdings utilizes non-GAAP financial measures, specifically Fee-Related Earnings and Fee-Related Earnings per share, to offer investors a clearer view of its financial performance and the underlying economics. The company explicitly states these measures are not GAAP-compliant, have analytical limitations, and should not replace GAAP-derived metrics - Resolute Holdings believes Fee-Related Earnings and Fee-Related Earnings per share are useful to investors in evaluating its financial performance and the underlying economics attributable to common stockholders[11](index=11&type=chunk) - These non-GAAP financial measures are not prepared in accordance with U.S. GAAP, have limitations as analytical tools, and should not be considered as alternatives to net income or other GAAP performance measures[11](index=11&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents Resolute Holdings' Q1 2025 consolidated balance sheets, statements of operations, and cash flows, highlighting key financial changes and performance metrics [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, Resolute Holdings' total assets increased to $214,288 thousand from $201,792 thousand at year-end 2024, while total liabilities remained stable. Total stockholders' equity (deficit) improved from ($36,630) thousand to ($24,006) thousand Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Total assets | $214,288 | $201,792 | +$12,496 | | Total liabilities | $238,294 | $238,422 | -$128 | | Total equity (deficit) | ($24,006) | ($36,630) | +$12,624 | | Cash and cash equivalents | $71,017 | $71,589 | -$572 | | Accounts receivable | $54,188 | $47,449 | +$6,739 | | Long-term debt, net | $180,713 | $184,389 | -$3,676 | - Total assets increased by **$12,496 thousand** from December 31, 2024, to March 31, 2025[14](index=14&type=chunk) - Total equity (deficit) improved by **$12,624 thousand**, from **($36,630) thousand** to **($24,006) thousand**[14](index=14&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, net sales slightly decreased to $103,889 thousand, and gross profit declined to $54,547 thousand. A significant increase in operating expenses led to a lower income from operations of $25,621 thousand. The company reported a net loss attributable to common stockholders of ($3,366) thousand, primarily due to spin-off related costs and tax provisions Consolidated Statements of Operations Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :------------------------------------------------- | :-------- | :-------- | :------- | | Net sales | $103,889 | $104,010 | -$121 | | Gross profit | $54,547 | $55,213 | -$666 | | Selling, general and administrative expenses | $28,926 | $22,770 | +$6,156 | | Income from operations | $25,621 | $32,443 | -$6,822 | | Net income (loss) attributable to common stockholders | ($3,366) | $0 | -$3,366 | | Net income (loss) per share attributable to common stockholders - diluted | ($0.39) | $0 | -$0.39 | - Net sales decreased slightly from **$104,010 thousand** in Q1 2024 to **$103,889 thousand** in Q1 2025[16](index=16&type=chunk) - Selling, general and administrative expenses increased by **$6,156 thousand**, contributing to a decrease in income from operations[16](index=16&type=chunk) - Net income (loss) attributable to common stockholders was **($3,366) thousand** in Q1 2025, compared to zero in Q1 2024[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities decreased substantially to $18,368 thousand. Investing activities used less cash, while financing activities also used less cash compared to the prior year. Overall, cash and cash equivalents saw a slight decrease, ending at $71,017 thousand Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :------------------------------------ | :-------- | :-------- | :------- | | Net cash provided by operating activities | $18,368 | $35,668 | -$17,300 | | Net cash used in investing activities | ($1,156) | ($1,613) | +$457 | | Net cash used in financing activities | ($17,784) | ($21,978) | +$4,194 | | Net increase (decrease) in cash and cash equivalents | ($572) | $12,077 | -$12,649 | | Cash and cash equivalents, end of period | $71,017 | $50,268 | +$20,749 | - Net cash provided by operating activities decreased by **$17,300 thousand** from **$35,668 thousand** in Q1 2024 to **$18,368 thousand** in Q1 2025[19](index=19&type=chunk) - Cash and cash equivalents decreased by **$572 thousand** during Q1 2025, ending the period at **$71,017 thousand**[19](index=19&type=chunk) [Segment Financial Information](index=7&type=section&id=Segment%20Financial%20Information) This section details Resolute Holdings' Q1 2025 segment financial performance, including standalone management fees and operating losses, alongside CompoSecure Holdings' product sales and operating income, and segment balance sheet highlights [Segment Statements of Operations and Non-GAAP Reconciliations](index=7&type=section&id=Segment%20Statements%20of%20Operations%20and%20Non-GAAP%20Reconciliations) For Q1 2025, Resolute Holdings' standalone segment reported $1,129 thousand in management fees and an operating loss of ($2,797) thousand, leading to a net loss attributable to common stockholders of ($3,366) thousand. The consolidated CompoSecure Holdings segment generated $103,889 thousand in product sales and $26,608 thousand in operating income. After non-GAAP adjustments, Resolute Holdings' Fee-Related Earnings were ($606) thousand Segment Statements of Operations Highlights (Q1 2025, in thousands) | Metric | Resolute Holdings | CompoSecure Holdings | Consolidated | | :------------------------------------------------- | :---------------- | :------------------- | :----------- | | Management fees | $1,129 | $0 | $0 | | Product sales | $0 | $103,889 | $103,889 | | Income from operations | ($2,797) | $26,608 | $25,621 | | Net income (loss) attributable to common stockholders | ($3,366) | $0 | ($3,366) | | Fee-Related Earnings (Non-GAAP) | ($606) | N/A | ($606) | - Resolute Holdings' segment reported management fees of **$1,129 thousand** and a net loss attributable to common stockholders of **($3,366) thousand**[22](index=22&type=chunk) - CompoSecure Holdings segment generated **$103,889 thousand** in product sales and **$26,608 thousand** in income from operations[22](index=22&type=chunk) - Adjustments to reconcile Fee-Related Earnings include adding **$1,148 thousand** for equity-based compensation, **$2,046 thousand** for pro forma management fees, and **$290 thousand** for spin-off costs, offset by a net tax impact of **($724) thousand**, resulting in Fee-Related Earnings of **($606) thousand**[22](index=22&type=chunk) [Segment Balance Sheets](index=8&type=section&id=Segment%20Balance%20Sheets) As of March 31, 2025, Resolute Holdings' standalone segment had total assets of $11,742 thousand and total liabilities of $2,873 thousand, resulting in total stockholders' equity of $8,869 thousand. The majority of consolidated assets and liabilities resided within the CompoSecure Holdings segment, which reported total assets of $203,675 thousand and total liabilities of $236,484 thousand Segment Balance Sheet Highlights (March 31, 2025, in thousands) | Metric | Resolute Holdings | CompoSecure Holdings | Consolidated | | :------------------------------------ | :---------------- | :------------------- | :----------- | | Total assets | $11,742 | $203,675 | $214,288 | | Total liabilities | $2,873 | $236,484 | $238,294 | | Total stockholders' equity (deficit) | $8,869 | N/A | $8,869 | | Non-controlling interest | $0 | ($32,809) | ($32,875) | - Resolute Holdings' segment reported total assets of **$11,742 thousand** and total stockholders' equity of **$8,869 thousand**[26](index=26&type=chunk) - CompoSecure Holdings' segment accounted for the majority of consolidated assets and liabilities, with total assets of **$203,675 thousand** and total liabilities of **$236,484 thousand**[26](index=26&type=chunk)