CODI Compass Diversified Holdings

“Because these material weaknesses described in the 2025 Form 10-K had not been fully remediated as of September 30, 2026, management concluded that the Company s disclosure controls and procedures were not effective as of that date.”

“As previously disclosed in the 2025 Form 10-K, management identified material weaknesses in internal control over financial reporting.”

“we expect to continue to incur costs associated with securities and derivative litigation, governmental investigations and our efforts to remediate material weaknesses and strengthen internal control over financial reporting.”

“We have incurred accounting, financing, legal and other professional costs associated with the Lugano Investigation and the completed restatement of our previously issued financial statements.”

“The management fee incurred in the nine months ended September 30, 2025 reflects the amount incurred prior to the restatement of the Company's financial statements as the Company is not permitted under the MSA to adjust the amount owed to the Manager until the time when the restated financial information was available, which occurred upon the filing of the Company's 10-K/A on December 8, 2025.”

“The Management fee incurred in the three months ended September 30, 2025 reflects the amount incurred prior to the restatement of the Company's financial statements as the Company is not permitted under the MSA to adjust the amount owed to the Manager until the time when the restated financial information was available, which occurred upon the filing of the Company's 10-K/A on December 8, 2025.”

“As a result of the Lugano Investigation, the Company determined that the Company s previously issued financial statements for fiscal years 2022, 2023 and 2024, including other interim and full-year financial information, should no longer be relied upon.”

“As a result of the restatement of the financial statements as of December 31, 2024, 2023 and 2022 and for the years ended December 31, 2024, 2023 and 2022, as well as for the period ended December 31, 2021 and revisions made in the quarter ended March 31, 2025, the management fees paid to CGM were in excess of the amounts that should have been due under the MSA.”

“As a result of the Company s withdrawal of reliance on its 2024, 2023 and 2022 financial statements, delayed periodic reporting and the underlying conduct at Lugano, the Company is subject to ongoing investigations by the SEC and the U.S. Department of Justice.”

“The Company has incurred significant professional fees and other expenses related to the Lugano Investigation, the preparation of restated and delayed periodic financial statements, related litigation and investigations, financing arrangements and internal control remediation.”