Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 253

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 253
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 CONSOLIDATED FINANCIAL STATEMENTS
during such historical periods, the 2029 Notes and 2032 Notes are also being reclassified to current portion of long-term debt in such accompanying balance sheets.

The impact of the correction of the misstatements and errors described in Note B on the Consolidated Statements of Cash Flows were driven by changes in the related Consolidated Balance Sheet and Consolidated Statement of Operations line items. Below is a summary description of the significant errors:

| Consolidated Balance Sheets |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ADJ 1                       |     | Accounts Receivable - amounts were recorded at Lugano as accounts receivable which did not represent activity associated with a valid revenue transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ADJ 2                       |     | Inventory and Other Current Assets - amounts were recorded at Lugano as purchases of inventory or vendor prepayments which did not represent valid purchases. Invalid inventory transactions were also recorded in connection with barter purchases of jewelry or gems from customers in exchange for reducing accounts receivable transactions, and in connection with invalid revenue transactions. Other current assets increased as a result of the revised Lugano tax provision and a tax receivable that was recorded in each of the years presented in the consolidated financial statements.                                                                                                                                                                                                       |
| ADJ 3                       |     | Goodwill and Intangible Assets - the purchase price allocation of the assets acquired and liabilities assumed in the acquisition of Lugano in September 2021 was based upon materially incorrect financial information. As a result, the Company re-performed the purchase price allocation, which resulted in a change in the fair value of the intangible assets acquired and the calculation of goodwill. Additionally, due to the adjustments to historical financial information that resulted from the Lugano Investigation, the Company determined that a triggering event had occurred as of December 31, 2021 and December 31, 2022 and performed impairment testing of the goodwill and definite lived intangibles at Lugano as of these dates.                                                  |
| ADJ 4                       |     | Accrued expenses - Unrecorded liabilities related to inventory transactions at Lugano  and accrued interest associated with the Lugano Financing Arrangements have been recorded in the consolidated balance sheets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ADJ 5                       |     | Financing arrangements - Lugano entered into various financing arrangements with third partiesthatwere not previously recorded in the historical financial statements of Lugano as debt. In connection with the Lugano Investigation, the Company