GPGI (GPGI) FY2025 10-K Risk Factors: 25 New, 19 Dropped

What the changes say

Customer concentration remains high with JPMorgan Chase and American Express representing 55% of CompoSecure net sales.
New ownership stakes introduce Tungsten at 18% and Platinum Equity at 19% with board nomination rights.
International exposure grew through the Husky business spanning Brazil, China, India, Luxembourg, Mexico, and Russia.

What changed since the prior 10-K

New

NewRisks Related to Our Businesses
Risks associated with our technology systems, including system outages, data loss or others, could adversely affect our business and reputation
IT system outages or data loss could damage our reputation and create third-party liability.
NewRisks Related to Our Businesses
Our long-lived assets represent a significant portion of our total assets, and their full value may never be realized
A drop in future expected cash flows may force us to write down long-lived assets like plant, equipment, and intangibles.
NewRisks Related to Our Businesses
Our accounting is complex, and if it is erroneous or based on assumptions that change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price
Complex accounting estimates and requirements, partly managed by Resolute Holdings, could cause operating results to miss expectations.
NewRisks Related to the Business of CompoSecure
The future growth of our CompoSecure business may depend upon its ability to develop and introduce new products
Our CompoSecure Arculus Authenticate solutions may fail to achieve widespread market acceptance or protect against evolving cyber threats.
NewRisks Related to the Business of CompoSecure
Laws and regulations regarding digital asset management, if enacted and found to be applicable to our CompoSecure business, may require it to modify its products and services and could adversely affect its business
New federal digital asset laws like the GENIUS Act or SEC and CFTC rules could require us to modify our Arculus solutions.
NewRisks Related to the Business of CompoSecure
digital asset or assess its tax treatment, our CompoSecure business may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect the business, operating results, and financial condition of our CompoSecure business
We rely on legal counsel to determine if digital assets are securities before supporting transactions on the Arculus Cold Storage Wallet, exposing us to regulatory scrutiny.
NewRisks Related to the Business of Husky
The results of operations of the Husky business are reliant on unpredictable customer purchasing trends
Husky business results face unpredictability from customer purchasing trends, order timing, and conversion cycles.
NewRisks Related to the Business of Husky
Growth in emerging markets may impact the sales of the Husky business
Slowdowns in urbanization and middle-class growth in emerging markets could hurt Husky product sales.
NewRisks Related to the Business of Husky
There is no certainty that the Husky business will be able to manage fluctuations in raw materials
Fluctuations in tooling stainless steel prices may increase costs for the Husky business if global suppliers and price increases cannot mitigate them.
NewRisks Related to the Business of Husky
Failure of suppliers to deliver in a timely and cost-effective manner would adversely impact our operations
Global supply chain stress, freight issues, and component shortages could delay Husky product deliveries and increase inflationary costs.
NewRisks Related to the Business of Husky
The Husky business may face exposure to adverse movements in foreign currency exchange rates
Husky business revenues and expenses are exposed to foreign currency fluctuations, notably between Canadian and U.S. dollars.
NewRisks Related to the Business of Husky
The significant international operations of the Husky business subject us to risks inherent in doing business in foreign jurisdictions
Husky international manufacturing in Brazil, China, India, Luxembourg, Mexico, and Russia exposes us to foreign regulatory and political risks.
NewRisks Related to the Business of Husky
If the Husky business is unable to continue the technological innovation and successful introduction of new products into the market, customers may delay their orders or turn to other manufacturers
NewRisks Related to the Business of Husky
If the use of plastic as a packaging material declines, it could materially adversely affect the business, financial condition or results of operations of our Husky business
NewRisks Related to the Business of Husky
If products offered by our Husky business fail to perform or fail to meet customer requirements or expectations, we could incur significant additional costs
NewRisks Related to the Business of Husky
control. For instance, the Husky business depends on its suppliers for raw materials and components that meet our standards
NewRisks Related to the Business of Husky
New or increased taxes or other governmental regulations targeted to decrease the consumption of certain type of beverages may adversely affect our Husky business
NewRisks Related to the Business of Husky
Patents may not prevent competitors from making and selling products that are similar to the products of the Husky business
NewRisks Related to the Business of Husky
Some customers of our Husky business have been sued for patent infringement in connection with a specific design of products made using molds purchased from Husky, and in the future the Husky business could face similar lawsuits
NewRisks Related to the Business of Husky
Unanticipated changes in tax provisions, variability of quarterly and annual effective tax rates, the adoption of new tax legislation or exposure to additional tax liabilities could impact our financial performance
NewRisks Related to the Business of Husky
The Husky business is subject to other market risks
NewRisks Related to Our Indebtedness
Our substantial indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness
NewRisks Related to Our Indebtedness
We may not be able to generate sufficient cash flows from operations to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
NewRisks Related to Our Indebtedness
Despite our high level of indebtedness, we and our subsidiaries are able to incur significant additional amounts of debt or we may pay dividends or make other payments in the future, which could further exacerbate the risks associated with our substantial financial leverage
NewRisks Related to Our Indebtedness
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly

Dropped

DroppedRisks Related to Our Business
System outages, data loss or other interruptions affecting our operations could adversely affect our business and reputation
DroppedRisks Related to Our Business
Digital asset storage systems, such as the Arculus Cold Storage Wallet, are subject to potential illegal misuse, risks related to a loss of funds due to theft of digital assets, security and cybersecurity risks, system failures and other operational issues, which could cause damage to our reputation and brand
DroppedRisks Related to Our Business
December 2024, the U.S. Treasury finalized a rule requiring digital asset brokers, including non-custodial brokers, to report additional user information, although such rule is the subject of ongoing litigation
DroppedRisks Related to Our Business
We are dependent on certain distribution partners for distribution of our products and services. A loss of distribution partners could adversely affect our business
DroppedRisks Related to Our Business
We face competition that may result in a loss of our market share and/or a decline in profitability
DroppedRisks Related to Our Business
Our long-lived assets recorded as of December 31, 2024 were $28.9 million, representing approximately 6.1% of our total assets, of which we have recorded plant, equipment and leasehold improvements of $23.4 million, as our operations require significant investments in machinery and equipment
DroppedRisks Related to Our Business
As consumers and businesses spend less, our business, operation outcomes, and financial state may be adversely affected
System outages and data loss could affect operations and reputation.
DroppedRisks Related to Our Business
Pandemics or a resurgence of a pandemic may adversely affect our business, financial condition, liquidity or results of operations
DroppedRisks Related to Our Indebtedness
We had approximately $197.5 million of indebtedness as of December 31, 2024, consisting of amounts outstanding under our senior secured credit facility
DroppedRisks Related to Our Indebtedness
Upon the occurrence of an event of default relating to our credit facility, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit
DroppedRisks Related to Our Indebtedness
The debt outstanding under our existing credit facility has a variable rate of interest that is based on the SOFR which may have consequences for us that cannot be reasonably predicted and may increase our cost of borrowing in the future
Digital asset storage systems are subject to illegal misuse and theft.
DroppedRisks Related to Our Indebtedness
Our credit facility contains restrictive covenants that may impair our ability to conduct business
DroppedRisks Related to Our Indebtedness
We are a "controlled company" within the meaning of the Nasdaq listing rules and, as a result, qualify for and rely on certain exemptions from certain corporate governance requirements
DroppedRisks Related to Our Indebtedness
As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our securities less attractive to investors
U.S. Treasury finalized a rule requiring digital asset brokers to report user information.
DroppedRisks Related to Our Indebtedness
If we do not properly maintain and implement all required accounting practices and policies, including new accounting practices and policies, as applicable, we may be unable to provide the financial information required of a United States publicly traded company in a timely and reliable manner
DroppedRisks Related to Our Indebtedness
The exercise price for our Warrants is $7.97 per share (as adjusted effective February 28, 2025), subject to adjustment. There can be no assurance that the Warrants will remain in the money prior to their expiration and, as such, the Warrants may expire worthless
DroppedRisks Related to Our Indebtedness
Our Warrants may be redeemed prior to their exercise at a time that is disadvantageous to the holders, thereby making such Warrants worthless
DroppedRisks Related to Our Indebtedness
Warrants to purchase our Class A Common Stock are presently exercisable, which could increase the number of shares of Class A Common Stock eligible for future resale in the public market and result in dilution to our stockholders
DroppedRisks Related to Our Indebtedness
We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002, which could have a material adverse effect on our business
Dependence on certain distribution partners for product delivery.

Reworded

82% rewrittenRisks Related to Our Indebtedness
We incur significant costs and obligations as a result of being a public company
Updated to reflect that we are no longer a smaller reporting company, changed SEC references to NYSE, and added a specific internal controls requirement.
81% rewrittenRisks Related to the Business of CompoSecure
A disruption in the operations or supply chain of our CompoSecure business or the performance of its suppliers, liquidity partners and/or development partners could adversely affect the business and financial results of our CompoSecure business
Narrowed the scope of manufacturing disruption and supplier risks specifically to our CompoSecure business rather than the whole company.
Was: A disruption in our operations or supply chain or the performance of our suppliers, liquidity partners and/or development partners could adversely affect our business and financial results
80% rewrittenRisks Related to the Business of CompoSecure
The international sales of our CompoSecure business subject it to additional risks that can adversely affect its business, operating results and financial condition
Updated international revenue figures for CompoSecure to 14% in 2025 (down from 18% in 2024) and added specific foreign risk factors.
Was: Our international sales subject us to additional risks that can adversely affect our business, operating results and financial condition
73% rewrittenRisks Related to the Business of CompoSecure
U.S. regulators, courts and lawmakers alike are grappling with these questions, and the legal landscape remains uncertain
Retained the discussion on U.S. regulatory uncertainty regarding digital assets while keeping the reference to President Trump's January 2025 inauguration.
68% rewrittenRisks Related to the Business of CompoSecure
Failure to retain existing customers or identify and attract new customers could adversely affect the business, financial condition and results of operations of our CompoSecure business
Updated CompoSecure's top customer concentration: JPMorgan Chase and American Express represented 55% of net sales in 2025, down from 63% in 2024.
Was: Failure to retain existing customers or identify and attract new customers could adversely affect our business, financial condition and results of operations
68% rewrittenRisks Related to Our Indebtedness
Because certain significant stockholders control a significant percentage of our Class A Common Stock, such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our Class A Common Stock
Replaced Resolute with Tungsten (18%) and Platinum Equity (19%) as major stockholders, adding Platinum's board nomination rights under a January 2026 agreement.
67% rewrittenRisks Related to the Business of CompoSecure
Our CompoSecure business relies on licensing arrangements in production and other fields, and actions taken by any of its licensing partners could have a material adverse effect on our CompoSecure business
Restricted the third-party technology licensing risk specifically to the operations and net sales of our CompoSecure business.
Was: We rely on licensing arrangements in production and other fields, and actions taken by any of our licensing partners could have a material adverse effect on our business
63% rewrittenRisks Related to Our Businesses
Additionally, it is possible that unauthorized access to sensitive customer and business data may be obtained through inadequate use of security controls by our customers, suppliers or other vendors
Maintained the text regarding unauthorized access via customer and vendor security controls without adding new numerical thresholds.
62% rewrittenRisks Related to the Business of CompoSecure
Commercializing new products can be a lengthy and complex process. If our CompoSecure business is unable to introduce new products and services in a timely manner, its business could be materially adversely affected
Was: Our future growth may depend upon our ability to develop, introduce, manufacture and commercialize new products, which can be a lengthy and complex process. If we are unable to introduce new products and services in a timely manner, our business could be materially adversely affected
62% rewrittenRisks Related to the Business of CompoSecure
Production quality and manufacturing process disruptions could adversely affect our CompoSecure business
Was: Production quality and manufacturing process disruptions could adversely affect our business
60% rewrittenRisks Related to the Business of CompoSecure
The failure of our CompoSecure business to operate in compliance with the security standards of the payment card industry or other industry standards applicable to its customers, such as payment networks certification standards, could adversely affect our CompoSecure business
Was: Our failure to operate our business in compliance with the security standards of the payment card industry or other industry standards applicable to our customers, such as payment networks certification standards, could adversely affect our business
59% rewrittenRisks Related to Our Businesses
Rapidly evolving domestic and global economic conditions are beyond our control and could materially adversely affect our business, operations, and results of operations
56% rewrittenRisks Related to the Business of CompoSecure
Disruptions at our CompoSecure business’ primary production facility may adversely affect the business, results of operations and/or financial condition of our CompoSecure business
Was: Disruptions at our primary production facility may adversely affect our business, results of operations and/or financial condition
54% rewrittenRisks Related to the Business of CompoSecure
Product liability and warranty claims and their associated costs may adversely affect our CompoSecure business
Was: Product liability and warranty claims and their associated costs may adversely affect our business
49% rewrittenRisks Related to the Business of CompoSecure
Regulatory risks of operating as an unregistered exchange or as part of an unregistered exchange mechanism
41% rewrittenRisks Related to the Management Agreements
Resolute Holdings maintains a contractual as opposed to a fiduciary relationship with Holdings and Husky Holdings, and has limited liability under its respective Management Agreement for which it may be indemnified
Was: Resolute Holdings maintains a contractual as opposed to a fiduciary relationship with Holdings, and has limited liability under the Management Agreement for which they may be indemnified
32% rewrittenRisks Related to the Tax Receivable Agreement
We may be required to pay certain parties for most of the realized benefits relating to any additional tax depreciation or amortization deductions that we may claim
30% rewrittenRisks Related to Our Indebtedness
We may be unable to satisfy the NYSE listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions
Was: We may be unable to satisfy the Nasdaq Global Market listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions
28% rewrittenRisks Related to the Management Agreements
The Management Agreements may each be terminated by Resolute Holdings, on the one hand, or Holdings and Husky Holdings, on the other hand, as applicable, and a termination fee may be payable in certain circumstances
Was: The Management Agreement may be terminated by Resolute Holdings or Holdings, and a termination fee may be payable in certain circumstances
24% rewrittenRisks Related to Our Businesses
Any failure by us to identify, manage, integrate and complete acquisitions and other significant transactions successfully could harm our financial results, business and prospects
20% rewrittenRisks Related to the Management Agreements
The Management Agreements do not create a mutually exclusive relationship between Holdings, Husky Holdings, and Resolute Holdings
Was: The Management Agreement does not create a mutually exclusive relationship between Holdings and Resolute Management

All 67 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Businesses

01Rapidly evolving domestic and global economic conditions are beyond our control and could materially adversely affect our business, operations, and results of operations59% rewritten
02We may not be able to sustain our revenue growth rate in the future
03Any failure by us to identify, manage, integrate and complete acquisitions and other significant transactions successfully could harm our financial results, business and prospects24% rewritten
04Data and security breaches could compromise our systems and confidential information, cause reputational and financial damage, and increase risks of litigation, which could adversely affect our business, financial condition and results of operations
05Additionally, it is possible that unauthorized access to sensitive customer and business data may be obtained through inadequate use of security controls by our customers, suppliers or other vendors63% rewritten
06Risks associated with our technology systems, including system outages, data loss or others, could adversely affect our business and reputationNew
07Our inability to safeguard against misappropriation or infringement of our intellectual property may adversely affect our business
08We may incur substantial costs because of litigation or other proceedings relating to patents and other intellectual property rights
09Our long-lived assets represent a significant portion of our total assets, and their full value may never be realizedNew
10If tariffs and other restrictions on imported goods are imposed by the U.S. government, our revenue and operations may be materially and adversely affected
11The adoption of new tax legislation could affect our financial performance
12Our accounting is complex, and if it is erroneous or based on assumptions that change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock priceNew

Risks Related to the Management Agreements

13Our businesses are managed for a fee by Resolute Holdings, which has substantial influence over our businesses, operations and strategy and upon which our businesses are heavily reliant
14The Management Agreements do not create a mutually exclusive relationship between Holdings, Husky Holdings, and Resolute Holdings20% rewritten
15The Management Agreements may each be terminated by Resolute Holdings, on the one hand, or Holdings and Husky Holdings, on the other hand, as applicable, and a termination fee may be payable in certain circumstances28% rewritten
16Resolute Holdings maintains a contractual as opposed to a fiduciary relationship with Holdings and Husky Holdings, and has limited liability under its respective Management Agreement for which it may be indemnified41% rewritten
17We may have conflicts of interest with Resolute Holdings and its other affiliates

Risks Related to the Business of CompoSecure

18Failure to retain existing customers or identify and attract new customers could adversely affect the business, financial condition and results of operations of our CompoSecure business68% rewritten
19Commercializing new products can be a lengthy and complex process. If our CompoSecure business is unable to introduce new products and services in a timely manner, its business could be materially adversely affected62% rewritten
20Disruptions at our CompoSecure business’ primary production facility may adversely affect the business, results of operations and/or financial condition of our CompoSecure business56% rewritten
21A disruption in the operations or supply chain of our CompoSecure business or the performance of its suppliers, liquidity partners and/or development partners could adversely affect the business and financial results of our CompoSecure business81% rewritten
22The future growth of our CompoSecure business may depend upon its ability to develop and introduce new productsNew
23Regulatory uncertainty surrounds the digital asset environment, and the regulatory classification of such digital assets
24U.S. regulators, courts and lawmakers alike are grappling with these questions, and the legal landscape remains uncertain73% rewritten
25Laws and regulations regarding digital asset management, if enacted and found to be applicable to our CompoSecure business, may require it to modify its products and services and could adversely affect its businessNew
26digital asset or assess its tax treatment, our CompoSecure business may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect the business, operating results, and financial condition of our CompoSecure businessNew
27Regulatory risks of operating as an unregistered exchange or as part of an unregistered exchange mechanism49% rewritten
28Production quality and manufacturing process disruptions could adversely affect our CompoSecure business62% rewritten
29The failure of our CompoSecure business to operate in compliance with the security standards of the payment card industry or other industry standards applicable to its customers, such as payment networks certification standards, could adversely affect our CompoSecure business60% rewritten
30Product liability and warranty claims and their associated costs may adversely affect our CompoSecure business54% rewritten
31The international sales of our CompoSecure business subject it to additional risks that can adversely affect its business, operating results and financial condition80% rewritten
32Our CompoSecure business relies on licensing arrangements in production and other fields, and actions taken by any of its licensing partners could have a material adverse effect on our CompoSecure business67% rewritten

Risks Related to the Business of Husky

33The results of operations of the Husky business are reliant on unpredictable customer purchasing trendsNew
34Growth in emerging markets may impact the sales of the Husky businessNew
35There is no certainty that the Husky business will be able to manage fluctuations in raw materialsNew
36Failure of suppliers to deliver in a timely and cost-effective manner would adversely impact our operationsNew
37The Husky business may face exposure to adverse movements in foreign currency exchange ratesNew
38The significant international operations of the Husky business subject us to risks inherent in doing business in foreign jurisdictionsNew
39If the Husky business is unable to continue the technological innovation and successful introduction of new products into the market, customers may delay their orders or turn to other manufacturersNew
40If the use of plastic as a packaging material declines, it could materially adversely affect the business, financial condition or results of operations of our Husky businessNew
41If products offered by our Husky business fail to perform or fail to meet customer requirements or expectations, we could incur significant additional costsNew
42control. For instance, the Husky business depends on its suppliers for raw materials and components that meet our standardsNew
43New or increased taxes or other governmental regulations targeted to decrease the consumption of certain type of beverages may adversely affect our Husky businessNew
44Patents may not prevent competitors from making and selling products that are similar to the products of the Husky businessNew
45Some customers of our Husky business have been sued for patent infringement in connection with a specific design of products made using molds purchased from Husky, and in the future the Husky business could face similar lawsuitsNew
46Unanticipated changes in tax provisions, variability of quarterly and annual effective tax rates, the adoption of new tax legislation or exposure to additional tax liabilities could impact our financial performanceNew
47The Husky business is subject to other market risksNew

Risks Related to the Tax Receivable Agreement

48We may be required to pay certain parties for most of the realized benefits relating to any additional tax depreciation or amortization deductions that we may claim32% rewritten
49In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement
50The acceleration of payments under the Tax Receivable Agreement in the case of certain changes of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A Common Stock

Risks Related to Our Indebtedness

51Our substantial indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtednessNew
52We may not be able to generate sufficient cash flows from operations to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successfulNew
53Despite our high level of indebtedness, we and our subsidiaries are able to incur significant additional amounts of debt or we may pay dividends or make other payments in the future, which could further exacerbate the risks associated with our substantial financial leverageNew
54Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantlyNew
55Our only significant asset is our ownership of our subsidiaries’ business. If the business of our subsidiaries is not profitably operated, they may be unable to make distributions to enable us to pay any dividends on our common stock or satisfy our other financial obligations
56Provisions in our Charter and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A Common Stock and could entrench management
57We may be unable to satisfy the NYSE listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions30% rewritten
58We incur significant costs and obligations as a result of being a public company82% rewritten
59If our operating performance does not meet market expectations, the price of our securities may decline
60Our ability to successfully operate our business largely depends upon the efforts of certain key personnel. The loss of such key personnel could adversely affect our operations and profitability
61Our ability to meet expectations and projections in any research or reports published by securities or industry analysts, or a lack of coverage by securities or industry analysts, could result in a depressed market price and limited liquidity for our securities
62Future sales of our securities, including resale of securities issued to certain stockholders, may reduce the market price of our securities that you might otherwise obtain
63Because certain significant stockholders control a significant percentage of our Class A Common Stock, such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our Class A Common Stock68% rewritten
64Our Charter renounces any expectancy in or right to be offered an opportunity to participate in certain transactions or matters that may be investment, corporate or business opportunities and that are presented to the Company or our officers, directors or stockholders
65Our Bylaws designate the Court of Chancery in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by stockholders, which could limit the ability of stockholders to obtain a favorable judicial forum for disputes
66We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and securities prices, which could cause you to lose some or all of your investment
67We may be subject to securities litigation, which is expensive and could divert management attention

Other GPGI 10-Ks

FY2024 10-K risk factors
61 risks
Concentrated customer base creates revenue dependency on JPMorgan Chase and American Express, representing 63% of net sales in 2024. Heavy reliance on external management by Resolute Holdings under a non-fiduciary contract. Substantial debt load of $197.5 million with variable SOFR interest rates.
Filed Mar 05, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.