Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 103

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 103
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 notice that we had failed to deliver our consolidated financial statements for the fiscal quarter ending March 31, 2025 by the deadline set by the senior note indenture forbearance agreement in place at the time. Although we are within a sixty (60) day cure period, if we do not deliver the required financial statements by December 26, 2025, the senior note holders will have a separate right to declare the senior notes due and payable .

In addition, without an amendment to the 2022 Credit Facility to address the impact of Lugano’s deconsolidation, the Company may also be in breach of its financial covenants under the 2022 Credit Facility at the next time those covenants are tested.

If we are unable to cure the existing breaches or obtain a waiver or forbearance relief before an acceleration occurs, we may not be able to make the required payments or refinance the accelerated obligations on terms acceptable to us, if at all. Any such outcome would materially and adversely affect our liquidity, results of operations, financial condition, ability to execute on our business strategies, stock price, and our ability to continue as a going concern, and may require us to seek additional capital, refinance or restructure our indebtedness, sell assets, or pursue other strategic alternatives, none of which may not be available on acceptable terms, if at all. Any new financing, if available, may impose significantly higher costs, require additional restrictive covenants, or result in substantial dilution to our stockholders. Additionally, the exercise of other remedies available to the lenders under the credit agreement could disrupt our operations by interrupting our supply chain, limiting our ability to pay vendors, delaying customer deliveries, and increase the risk of losing key employees, any of which would materially harm our financial performance and business prospects. These circumstances may also negatively affect, our relationships with customers, suppliers, employees, and other stakeholders. They have also required, and will continue to require, substantial management time and increased professional advisory costs.

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Because our credit agreement lenders have the contractual right to immediately accelerate our indebtedness, and because negotiations regarding amendments, waivers, or other relief were not completed as of the filing of this Form 10-K/A and are not entirely within our control, management has concluded, in applying the going-concern guidance under U.S. GAAP, that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements set forth