Company: CODI-PB
Filing Date: 2025-06-25
Form Type: 8-K
Source: 0001345126-25-000038
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Company: Compass Diversified Holdings
Filing Date: 2025-06-25
Form: 8-K
Item: Item 4.02
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Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

As previously reported in our Current Report on Form 8-K filed on May 7, 2025 (the “ Prior Form 8-K”), after considering the advice and recommendations of the management of Compass Group Diversified Holdings LLC (“ CODI,” or the “ Company”), as well as the Company’s outside legal counsel and forensic accounting firm (the outside legal counsel and forensic accounting firm, collectively, the “ Advisors”), and discussion with the Company’s independent registered accounting firm, Grant Thornton LLP (“ Grant Thornton”), on May 7, 2025 the Audit Committee of the Board of Directors (the “ Audit Committee”) concluded that the Company’s consolidated financial statements and other interim and full-year financial information for the fiscal year ended December 31, 2024 should no longer be relied upon and that any previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the Company’s consolidated financial statements and other related financial information covering the fiscal year ended December 31, 2024 should also no longer be relied upon.

These conclusions were the result of an internal investigation (the “ Investigation”), initiated by the Audit Committee in April 2025, into the financing, accounting, and inventory practices of Lugano Holding, Inc. (“ Lugano”), a subsidiary and operating segment of the Company, based on concerns reported to Company management, and immediately reported to the Audit Committee, as to these practices. The Investigation focuses on certain unrecorded financing arrangements and irregularities identified in sales, cost of sales, inventory, and accounts receivable recorded by Lugano.

As the Investigation has progressed, the Advisors observed and confirmed to the Audit Committee that the identified irregularities also existed during fiscal years 2022 and 2023. Accordingly, on June 18, 2025 the Audit Committee, after consultation with the Company’s management, the Advisors, and Grant Thornton, concluded that, in addition to the previously issued financial statements for fiscal year 2024 contained in the Company’s Annual Report for December 31, 2024, the previously issued financial statements and other interim and full-year financial information for the fiscal years ended December 31, 2022 and December 31, 2023 should also no longer be relied upon, and that any previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the Company’s consolidated financial statements and other related financial information