Resolute Holdings Management, Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere particularly in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included in this Quarterly Report on Form 10-Q.

Overview

Resolute Holdings Management, Inc. (“Resolute Holdings”) provides operating management services to generate recurring, long-duration management fees from CompoSecure Holdings L.L.C. (“CompoSecure Holdings”) and other companies it may manage in the future. Resolute Holdings applies a differentiated approach of value creation through the systematic deployment of the Resolute Operating System to drive performance at businesses it manages with the intention of creating value at both the underlying managed businesses, including CompoSecure Holdings, and at Resolute Holdings. Resolute Holdings also applies its M&A and capital markets expertise to drive inorganic growth of its managed businesses.

In accordance with ASC 810 and due to the terms of the CompoSecure Management Agreement, as defined below, Resolute Holdings (together with CompoSecure Holdings, the “Company”) is required to consolidate CompoSecure Holdings because it is a variable interest entity (“VIE”) in which Resolute Holdings is deemed to be the primary beneficiary. Resolute Holdings does not own any equity interests or common stock in CompoSecure Holdings or CompoSecure.

CompoSecure Holdings, a wholly owned subsidiary of CompoSecure, Inc. (“CompoSecure”), creates innovative, highly differentiated and customized financial payment card products for banks and other payment card issuers to support and increase their customer acquisition, customer retention and organic customer spend. CompoSecure Holdings’ customers consist primarily of leading international and domestic banks and other payment card issuers primarily within the United States (“U.S.”), with additional direct and indirect customers in Europe, Asia, Latin America, Canada, and the Middle East. CompoSecure Holdings is a platform for next generation payment technology, security, and authentication solutions. CompoSecure Holdings maintains trusted, highly-embedded and long-term customer relationships with an expanding set of global issuers. CompoSecure Holdings has established a niche position in the financial payment card market through over 20 years of innovation and experience and is focused primarily on this attractive subsector of the financial technology market. CompoSecure Holdings serves a diverse set of direct customers and indirect customers, including some of the largest issuers of credit cards in the U.S.

Recent Developments

On February 28, 2025, CompoSecure distributed all shares of common stock of its wholly owned subsidiary, Resolute Holdings, on a pro rata basis to the holders of CompoSecure’s Class A Common Stock as of the February 20, 2025 record date (“Spin-Off”). Each stockholder of record who held shares of CompoSecure Class A Common Stock as of the close of business on February 20, 2025, received one share of Resolute Holdings common stock for every twelve shares of CompoSecure common stock then held. On February 28, 2025, Resolute Holdings started trading regular-way on The Nasdaq Stock Market LLC under the ticker symbol “RHLD”. On September 23, 2025, Resolute Holdings transferred the listing of its common stock to the New York Stock Exchange where it continues to trade under the ticker symbol “RHLD”.

In connection with the completion of the Spin-Off, Resolute Holdings entered into a management agreement with CompoSecure Holdings (the “CompoSecure Management Agreement”), pursuant to which Resolute Holdings is responsible for managing the day-to-day business and operations and overseeing the strategy of CompoSecure Holdings and its controlled affiliates. Due to the execution of and the terms of the CompoSecure Management Agreement, Resolute Holdings is required to consolidate CompoSecure Holdings for financial reporting purposes.

Pursuant to the CompoSecure Management Agreement, CompoSecure Holdings pays Resolute Holdings a quarterly management fee (the “CompoSecure Management Fee”), payable in arrears, in a cash amount equal to 2.5% of CompoSecure Holdings’ last 12 months’ Adjusted EBITDA, as defined in the Management Agreement, measured for the period ending on the fiscal quarter then ended (“Management Agreement Adjusted EBITDA”). Management Agreement Adjusted EBITDA reflects a) CompoSecure Holdings’ earnings before interest, taxes, depreciation, depletion and amortization, extraordinary losses and expenses, one-time and non-recurring expenses, and the CompoSecure Management Fee, less b) CompoSecure’s selling, general and administrative expenses, adjusted for the same items above (“Parent Allocated Expense”, as defined in the CompoSecure Management Agreement). CompoSecure Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of CompoSecure Holdings other than those expenses related to Resolute Holdings’ or its affiliates’ personnel who provide services to CompoSecure Holdings under the CompoSecure Management Agreement. Resolute Holdings will determine, in its sole and absolute discretion, whether a cost or expense will be borne by Resolute Holdings or by CompoSecure Holdings.

The CompoSecure Management Agreement has an initial term of 10 years and shall automatically renew for successive ten-year terms unless terminated in accordance with its terms. Resolute Holdings and CompoSecure Holdings may each terminate the CompoSecure Management Agreement upon the occurrence of certain other limited events, and in connection with certain of these limited events, Resolute Holdings has the right to require CompoSecure Holdings to pay a termination fee, which may be paid in cash, shares of common stock of CompoSecure or a combination of cash and stock. The CompoSecure Management Agreement also provides for certain indemnification rights in Resolute Holdings’ favor, as well as certain additional covenants, representations and warranties.

Economic Conditions - Globally and in the Digital Asset Marketplace

As a result of the consolidation of CompoSecure Holdings, the Company’s business, financial condition and results of operations are subject to impacts from trends and developments impacting the business of CompoSecure Holdings, including but not limited to, market cycles that have created uncertainty in the timing of CompoSecure Holdings’ planned ramp-up of its Arculus offering.

Key Components of Results of Operations

Net Sales

Net sales reflect the Company’s revenue generated from the sale of CompoSecure Holdings’ products as management fee revenue at Resolute Holdings is eliminated in consolidation. Product sales at CompoSecure Holdings primarily include the design and manufacturing of metal cards, including contact and dual interface cards. CompoSecure Holdings also generates revenue from the sale of Prelams (which refers to pre-laminated, sub-assemblies consisting of a composite of material layers which are partially laminated to be used as a component in the multiple layers of a final payment card or other card construction). Net sales include the effect of discounts and allowances which consist primarily of volume-based rebates.

Cost of Sales

The Company’s cost of sales comprises CompoSecure Holdings’ direct and indirect costs related to manufacturing products and providing related services. Product costs include the cost of raw materials and supplies, including various metals, EMV® chips, holograms, adhesives, magnetic stripes, and NFC assemblies; the cost of labor; equipment and facilities; operational overhead; depreciation and amortization; leases and rental charges; shipping and handling; and freight and insurance costs. Cost of sales can be impacted by many factors, including volume, operational efficiencies, procurement costs, and promotional activity.

Gross Profit and Gross Margin

The Company’s gross profit comprises CompoSecure Holdings’ net sales less cost of sales, and its gross margin represents gross profit as a percentage of its net sales.

Operating Expenses

The Company’s operating expenses are primarily comprised of selling, general, and administrative expenses at Resolute Holdings and CompoSecure Holdings, which generally consist of personnel-related expenses for its corporate, executive, finance, information technology, and other administrative functions, and expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, depreciation, amortization, travel, sales and marketing.

Income from Operations and Operating Margin

Income from operations consists of the Company’s gross profit less its operating expenses. Operating margin is income from the Company’s operations as a percentage of its net sales.

Other Income (Expense)

Other income (expense) primarily consist of interest expense net of any interest income and deferred financing costs.

Net (Loss) Income

Net (loss) income consists of the Company’s income from operations, less other expenses and income tax provision or benefit.

Results of Operations

Three months ended September 30, 2025 vs. three months ended September 30, 2024

The following table presents the Company’s results of operations for the periods indicated:

(in thousands)

Net Sales

(in thousands)

The Company’s net sales for the quarter ended September 30, 2025 increased $13.7 million to $120.9 million compared to $107.1 million for the quarter ended September 30, 2024. The increase was driven by an increase in domestic sales in CompoSecure Holdings’ premium payment card business, which was up 31%, offset by international sales which were down 42%.

Domestic: The Company’s domestic net sales for the quarter ended September 30, 2025 increased $25.1 million, or 31%, to $105.1 million compared to $80.0 million for the quarter ended September 30, 2024. The increase was primarily due to higher volumes from new and existing customers.

International: The Company’s international net sales for the quarter ended September 30, 2025 decreased $11.3 million, or 42%, to $15.8 million compared to $27.1 million for the quarter ended September 30, 2024. CompoSecure Holdings’ international customer base is comprised of a larger population of smaller customers compared to the domestic customer base. The timing of certain customer orders negatively impacted sales compared to the quarter ended September 30, 2024.

Gross Profit and Gross Margin

The Company’s gross profit for the quarter ended September 30, 2025 increased $15.9 million, or 29%, to $71.3 million compared to $55.4 million for the quarter ended September 30, 2024, and the gross profit margin increased to 59%, compared to 52% in the prior year. The increase was driven by higher volumes, mix, and improved operational execution from the implementation of the Resolute Operating System.

Operating Expenses

The Company’s operating expenses increased $7.3 million, or 32%, to $29.9 million for the quarter ended September 30, 2025 compared to $22.6 million for the quarter ended September 30, 2024. The increase was primarily due to incremental salaries and equity based compensation expense from hiring employees at Resolute Holdings.

Income from Operations and Operating Margin

Income from operations for the quarter ended September 30, 2025 increased $8.6 million, or 26%, to $41.5 million compared to $32.8 million for the quarter ended September 30, 2024. The increase was primarily attributable to an increase in revenue and gross margin, partially offset by higher operating expenses. Operating margin for the quarter ended September 30, 2025 increased by 3%, to 34%, compared to 31% for the quarter ended September 30, 2024. The increase in operating margin was primarily attributable to the increase in gross margin, partially offset by higher operating expenses.

Other Income (Expense)

Other expense for the quarter ended September 30, 2025 decreased $3.0 million, to $2.0 million, compared to $5.0 million for the quarter ended September 30, 2024. The decrease in other expense was primarily due to lower interest expense as a result of the Exchangeable Notes being exchanged and extinguished during the fourth quarter of 2024.

Income Tax Expense

The Company’s income tax expense for the quarter ended September 30, 2025 was $0.1 million compared to $0.0 million for the quarter ended September 30, 2024 due to Resolute Holdings being taxed as a corporation compared to CompoSecure Holdings as a pass-through entity in the prior period.

Results of Operations

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

The following table presents the Company’s results of operations for the periods indicated:

(in thousands)

Net Sales

(in thousands)

The Company’s net sales for the nine months ended September 30, 2025 increased $24.6 million to $344.3 million compared to $319.7 million for the nine months ended September 30, 2024. The increase was driven by a 16% increase in domestic sales in CompoSecure Holdings’ premium payment card business, partially offset by international sales which were down 26%.

Domestic: The Company’s domestic net sales for the nine months ended September 30, 2025 increased $40.9 million, or 16%, to $298.9 million compared to $258.0 million for the nine months ended September 30, 2024. The increase was due to higher volumes from new and existing customers.

International: The Company’s international net sales for the nine months ended September 30, 2025 decreased $16.3 million, or 26%, to $45.4 million compared to $61.7 million for the nine months ended September 30, 2024. CompoSecure Holdings’ international customer base is comprised of a larger population of smaller customers compared to the domestic customer base. The timing of certain customer orders negatively impacted sales compared to the nine months ended September 30, 2024.

Gross Profit and Gross Margin

The Company’s gross profit for the nine months ended September 30, 2025 increased $28.0 million, or 17%, to $194.7 million compared to $166.7 million for the nine months ended September 30, 2024, while the gross profit margin increased by 5% to 57%. The increase was driven by higher volumes, mix, and improved operational execution from the implementation of the Resolute Operating System.

Operating Expenses

The Company’s operating expenses increased $19.0 million, or 28%, to $87.0 million for the nine months ended September 30, 2025 compared to $68.0 million for the nine months ended September 30, 2024. The increase was primarily due to incremental salaries and equity based compensation expense from hiring employees at Resolute Holdings.

Income from Operations and Operating Margin

Income from operations for the nine months ended September 30, 2025 increased $9.0 million, or 9%, to $107.7 million. The increase was due to an increase in revenue and gross margin, offset by an increase in operating expenses. Operating margin for the nine months ended September 30, 2025 was flat at 31% compared to the nine months ended September 30, 2024. The flat operating margin was driven by an increase in the gross margin, offset by an increase in operating expenses described above.

Other Income (Expense)

Other expense for the nine months ended September 30, 2025 decreased $10.1 million, to $6.5 million, compared to $16.6 million for the nine months ended September 30, 2024. The decrease in other expense was primarily due to lower interest expense as a result of the Exchangeable Notes being exchanged and extinguished during the fourth quarter of 2024.

Income Tax Expense

The Company’s income tax expense for the nine months ended September 30, 2025 was $0.9 million compared to $0.0 million for the nine months ended September 30, 2024 due to Resolute Holdings being taxed as a corporation compared to CompoSecure Holdings as a pass-through entity in the prior period.

Segments

The following table presents the Company’s results of operations by reportable segment for the three and nine months ended September 30, 2025:

($ in thousands)

($ in thousands)

Use of Non-GAAP Financial Measures

This Quarterly Report on Form 10-Q includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and that may be different from non-GAAP financial measures used by other companies. The Company believes Fee-Related Earnings and Fee-Related Earnings per share are useful to investors in evaluating the Company’s financial performance. Fee-Related Earnings is calculated based on net income (loss) attributable to common stockholders of Resolute Holdings, and adding back a) equity-based compensation under the CompoSecure Equity Plan, b) Management Fees for the period during which expenses were incurred from Jan 1, 2025 until February 27, 2025 but prior to execution of the Management Agreement, c) one-time Spin-Off related costs, less the net tax impact of such adjustments at Resolute Holdings’ expected tax rate of 31%. The Company believes that these non-GAAP financials represent the best presentation regarding the performance of the Company that is attributable to Resolute Holdings common stockholders. Fee-Related Earnings and Fee-Related Earnings per share should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from Fee-Related Earnings and Fee-Related Earnings per share are significant components in understanding and assessing the Company’s financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, and may be different from similarly titled non-GAAP measures used by other companies.

The following unaudited table presents the reconciliation of U.S. GAAP net income attributable to common stockholders to non-GAAP Fee-Related Earnings and Fee-Related Earnings per share for the three and nine month periods ended September 30, 2025:

($ in thousands except per share figures)

($ in thousands except per share figures)

(1) Equity-based compensation required to be reported by the Company related to awards issued under the CompoSecure Equity Plan. Equity granted under the CompoSecure Equity Plan relates to CompoSecure Class A common stock and has no impact on Resolute Holdings’ common stock outstanding.

(2) Incremental management fees as if the CompoSecure Management Agreement was executed on January 1, 2025.

(3) One-time costs associated with the Spin-Off from CompoSecure.

(4) Tax-effect of adjustments at a 31% effective tax rate. Only applied to those adjustments that would impact Resolute Holdings’ taxes. Equity-based compensation expense under the CompoSecure Equity Plan is expensed for tax purposes at CompoSecure and not Resolute Holdings.

Critical Accounting Policies and Estimates

Critical accounting policies are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and reference is made to Note 2 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”. Critical accounting policies adopted since the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 include the following:

Reclassifications: Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Variable Interest Entities: The Company evaluates its contractual, ownership, and other interests in entities to determine if it has any variable interest in a VIE. These evaluations are complex and involve judgment. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively.

New Accounting Pronouncements

Reference is made to Note 2 of Notes to Financial Statements - unaudited in Item 1, “Financial Statements,” for information concerning recent accounting pronouncements since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Liquidity and Capital Resources

Resolute Holdings’ primary sources of liquidity are the CompoSecure Management Agreement, its existing cash and cash equivalents balances, short-term investments, and borrowings on the Resolute revolving credit facility. CompoSecure Holdings’ primary sources of liquidity are its existing cash and cash equivalents, short-term investments, cash flows from operations, and borrowings on the CompoSecure Holdings term loan and revolving credit facility as detailed in Note 8 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”. The Company’s primary cash requirements at Resolute Holdings and CompoSecure Holdings include operating expenses, debt service payments (principal and interest), and capital expenditures (including property and equipment and software).

As of September 30, 2025, the Company had cash and cash equivalents of $98.2 million, consisting of $1.0 million at Resolute Holdings and $97.2 million at CompoSecure Holdings. The Company had short-term investments comprised of US treasury bills of $49.7 million, consisting of $9.1 million at Resolute Holdings and $40.7 million at CompoSecure Holdings. The Company had debt principal outstanding of $190.0 million at CompoSecure Holdings. As of December 31, 2024, the Company had cash and cash equivalents of $71.6 million and total debt principal outstanding of $197.5 million, all at CompoSecure Holdings.

Resolute Holdings and CompoSecure Holdings are distinct legal entities and operating businesses that must separately maintain sufficient liquidity independent of each other. Debt at each entity is non-recourse to the other. Resolute Holdings is dependent on payment of the CompoSecure Management Fee from CompoSecure Holdings to maintain sufficient liquidity. The Company believes that the cash flows from operations and available cash and cash equivalents and short-term investments, as well as the availability of a $5.0 million revolving credit facility at Resolute Holdings, are sufficient to meet the liquidity needs of Resolute Holdings for at least the next 12 months from the date of filing of this Form 10-Q. The Company believes that the cash flows from operations and available cash and cash equivalents and short-term investments, as well as the availability of a $130.0 million revolving credit facility at CompoSecure Holdings, are sufficient to meet the liquidity needs of CompoSecure Holdings, including the repayment of its outstanding debt, for at least the next 12 months from the date of filing of this Form 10-Q.

The Company anticipates that to the extent Resolute Holdings requires additional liquidity, it shall do so through borrowings on its revolving credit facility, the incurrence of other indebtedness, or a combination thereof and offering of its shares in capital markets. The Company anticipates that to the extent CompoSecure Holdings requires additional liquidity, it shall do so through borrowings on its revolving credit facility, the incurrence of other indebtedness, or a combination thereof and offering of CompoSecure shares in capital markets. The Company cannot be assured that each of Resolute Holdings and CompoSecure Holdings will be able to obtain this additional liquidity on reasonable terms, or at all. Additionally, the liquidity of Resolute Holdings and CompoSecure Holdings and their ability to meet their respective obligations and fund their capital requirements are also dependent on their respective future financial performance, which is subject to general economic, financial and other factors that are beyond its control. Accordingly, the Company cannot be assured that its business will generate sufficient cash flows from operations or that future borrowings will be available from additional indebtedness or otherwise to meet its liquidity needs. Although the Company has no specific current plans to do so, if the Company decides to pursue one or more significant acquisitions, the Company may incur additional debt to finance such acquisitions.

On February 28, 2025, Resolute Holdings entered into a credit agreement with JPMorgan Chase Bank, N.A (“JPMC”) as lender (the “Resolute Credit Agreement”). The Resolute Credit Agreement provides for a $5.0 million loan through a senior secured revolving credit facility available to be used by Resolute Holdings. The revolving credit facility matures on May 31, 2026. Borrowings of the revolving loans shall bear interest at a fluctuating rate per annum equal to, at the option of Resolute Holdings, (i) a rate equal to the higher of (a) the rate of interest last quoted by the Wall Street Journal as the prime rate in the U.S. or (b) 2.5% or (ii) a Term SOFR based benchmark rate for the applicable interest period (provided that in no event shall such Term SOFR rate be less than 0.00% per annum) plus an applicable margin of 2.25%. The terms of the revolving credit facility impose financial covenants, measured at the Resolute Holdings legal entity level, including a minimum liquidity ratio, a minimum revenue requirement and, beginning with the fiscal quarter ending March 31, 2026, a minimum leverage ratio which shall not be greater than 1.50 to 1.00 on the last day of any fiscal quarter. The revolving credit facility is subject to an unused commitment fee of 0.25%. No amounts were drawn on the Resolute Holdings revolving credit facility as of September 30, 2025. As of September 30, 2025, Resolute Holdings met the covenants of the Resolute Credit Agreement.

On August 7, 2024, CompoSecure Holdings, together with its operating subsidiaries, entered into a Fourth Amended and Restated Credit Agreement with JPMC (the “CompoSecure Holdings Credit Facility”). The CompoSecure Holdings Credit Facility had an initial maximum borrowing capacity of $330,000, comprised of a term loan of $200,000 (the “CompoSecure Holdings Term Loan”) and a revolving credit facility of $130,000 (the “CompoSecure Holdings Revolver”). The CompoSecure Holdings Credit Facility has a maturity date of August 7, 2029. At September 30, 2025, there was $190.0 million of total debt outstanding under the CompoSecure Holdings Credit Facility. No amounts were drawn on the CompoSecure Holdings Revolver as of September 30, 2025. Additional amounts may be available for borrowing during the term of the revolving loan, up to the full $130 million, as long as CompoSecure Holdings maintains a net leverage ratio as stipulated in the credit facility agreement. As of September 30, 2025, CompoSecure Holdings’ net leverage ratio met the requirement for the available borrowing as defined in the terms of the credit facility agreement. CompoSecure has pledged its ownership interests in CompoSecure Holdings (representing 100% ownership) as collateral pursuant to a pledge and security agreement with the lenders under the CompoSecure Holdings Credit Facility.

The CompoSecure Holdings Credit Facility requires CompoSecure Holdings to make quarterly principal payments until maturity, at which point a balloon principal payment is due for the outstanding principal. The CompoSecure Holdings Credit Facility also requires CompoSecure Holdings to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the CompoSecure Holdings Revolver. The CompoSecure Holdings Credit Facility provides for CompoSecure Holdings to prepay the term loans without penalty or premium. The CompoSecure Holdings Credit Facility is secured by substantially all assets of CompoSecure Holdings.

Interest on the CompoSecure Holdings Revolver and CompoSecure Holdings Term Loan are based on the outstanding principal amount during the interest period multiplied by the quoted SOFR rate plus the applicable margin which can range from 1.75% to 2.75% based on CompoSecure Holdings’ leverage ratio. The CompoSecure Holdings Credit Facility also requires the Company to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the CompoSecure Holdings Revolver. The CompoSecure Holdings Credit Facility contains customary covenants, including among other things, certain restrictions or limitations on indebtedness, issuance of liens, investments, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of CompoSecure Holdings assets, and affiliate transactions. CompoSecure Holdings may also be required to make repayments in advance of the maturity date based on a calculation of excess cash flows, as defined in the agreement, with any required payments to be made after the issuance of CompoSecure Holdings annual financial statements. CompoSecure Holdings was in compliance with all covenants of the CompoSecure Holdings Credit Facility as of September 30, 2025. See Note 8 in Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Net Cash Provided by Operations

Cash provided by the Company’s operating activities for the nine months ended September 30, 2025 was $126.9 million compared to cash provided by operating activities of $108.0 million during the nine months ended September 30, 2024. The increase in cash provided by operating activities of $18.8 million was primarily attributable to an increase in operating income, a decrease in other expenses, and an increase in accounts payable and accrued expenses, partially offset by an increase in accounts receivable.

Net Cash Used in Investing Activities

Cash used in the Company’s investing activities for the nine months ended September 30, 2025 was $53.2 million primarily relating to the net purchase (maturities) of short-term investments of $49.0 million, capital expenditures of $3.0 million, and capitalized software expenditures of $1.2 million, compared to cash used in investing activities for the nine months ended September 30, 2024 of $5.5 million.

Net Cash Used in Financing Activities

Cash used in the Company’s financing activities for the nine months ended September 30, 2025 was $47.0 million compared to cash used in the Company’s financing activities for the nine months ended September 30, 2024 of $95.9 million. Cash used in financing activities for the nine months ended September 30, 2025 primarily related to payments for taxes related to net share settlement of CompoSecure equity awards of $20.6 million, a distribution to CompoSecure of $18.9 million, and repayment of scheduled principal payments of the CompoSecure Holdings term loan of $7.5 million. Cash used in financing activities for the nine months ended September 30, 2024 primarily related to distributions to then-members of CompoSecure Holdings including CompoSecure, repayment of scheduled CompoSecure Holdings term loan principal payments, and payments for taxes related to net share settlement of CompoSecure equity awards.

Contractual Obligations

A summary of our minimum contractual obligations related to our material outstanding contractual commitments is included in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC. Our long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. As of September 30, 2025, the Company has purchase commitments with a supplier of approximately $1.1 million for the remainder of 2025 and $7.7 million for 2026.

Financing

Resolute Holdings is a party to the Resolute Credit Facility and CompoSecure Holdings is a party to the CompoSecure Holdings Credit Facility with various banks. For a more complete description of the Company’s debt obligations, see Note 8 of Notes to Consolidated Financial Statements in the Consolidated Financial Statements of the Company in this Quarterly Report on Form 10-Q.

Interest Rate Risk

In addition to existing cash balances, short-term investments, and cash provided by operating activities, the Company uses variable rate debt to finance its operations. The Company is exposed to interest rate risk on these debt obligations and a related interest rate swap agreement. As of September 30, 2025, the Company had $190.0 million in debt outstanding under the CompoSecure Holdings Credit Facility, all of which was variable rate debt.

The Company performed a sensitivity analysis based on the principal amount of debt outstanding as of September 30, 2025. In this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year. An increase or decrease of 100 basis points in the applicable interest rate would cause an increase or decrease in interest expense on debt outstanding of approximately $1.9 million on an annual basis.

On January 11, 2022, CompoSecure Holdings entered into an interest rate swap agreement with an effective date of December 5, 2023 to hedge forecasted interest rate payments on its variable rate debt. As of September 30, 2025, CompoSecure Holdings had the following interest rate swap agreements (in thousands):

($ in thousands)

Under the terms of the interest rate swap agreement, CompoSecure Holdings receives payments based on the greater of 1-month SOFR rate, as amended in February 2023, or a minimum of 1.00%. The Company has designated the interest rate swap as a cash flow hedge that was determined to be effective for accounting purposes. The Company determined the fair value of the interest rate swap to be zero at the inception of the agreement and $0.6 million at September 30, 2025. The Company reflects the realized gains and losses of the actual monthly settlement activity of the interest rate swap in its consolidated statements of operations. The

Company reflects the unrealized changes in fair value of the interest rate swap at each reporting period in other comprehensive income and a derivative asset or liability is recognized at each reporting period in the Company’s financial statements.

Evaluation of Disclosure Controls and Procedures

We designed our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Under the supervision of and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures as of September 30, 2025. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures as of September 30, 2025 were functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosures.

A control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. We do not expect that our disclosure controls and procedures or our internal control over financial reporting are able to prevent with certainty all errors and all fraud.

Changes in Internal Control Over Financial Reporting

During the three months ended September 30, 2025, the Company continued the implementation of corporate and governance functions in order to meet the regulatory requirements of a standalone public company, such as external reporting, treasury, and stock administration, subsequent to the completion of the Spin-Off on February 28, 2025. Other than those discussed in the preceding sentences, there have been no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Summary of Risk Factors

The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. Except for the risk factors set forth below, there have been no material changes to the Company’s risk factors since the 2024 Form 10-K:

Our revenue and operations may be materially and adversely affected by tariffs and other restrictions on imported goods that have been, and may continue to be, imposed by the U.S. government.

A portion of the raw materials used by us to manufacture our products are obtained, directly or indirectly, from companies located outside of the United States. There is currently significant uncertainty about the future relationship between the U.S. and various other countries with respect to trade policies and tariffs. Recently, tariffs have been imposed on imports from certain countries outside of the United States. For example, the Trump administration has instituted substantial changes to U.S. foreign trade policy with respect to China and other countries, including a significant increase in tariffs on goods imported into the U.S., and has signaled possibly imposing further restrictions on international trade. As a result, further trade restrictions and/or tariffs may be forthcoming. Certain international trade agreements may also be at risk, as the current U.S. administration has voiced some opposition in respect thereof. These factors may stagnate the economy, impact relationships with and access to suppliers, increase the costs of certain raw materials we purchase, and/or materially and adversely affect our business, financial condition and results of operations. These and future tariffs, including any retaliatory tariffs that may be imposed by other countries on U.S. exports, as well as uncertainties surrounding domestic and foreign tariffs and any other global trade developments, bring with them uncertainty. We cannot predict future changes to imports covered by tariffs or which countries will be included or excluded from such tariffs. The reactions of other countries and resulting actions on the United States and similarly situated companies could negatively impact our business, financial condition and results of operations.