0001104659-22-034551 | POS AM | XBRL Viewer

Net income attributable to redeemable non-controlling interests

83,414

77,815

81,473

69,902

Net income attributable to CompoSecure, Inc

^[1]

$ 13,512

$ 77,815

$ 81,473

Net income per share attributable to Class A common stockholders - basic (usd per share)

^[2]

$ 0.91

Net income per share attributable to Class A common stockholders - diluted (usd per share)

^[2]

$ 0.14

Weighted average shares used to compute net income per share attributable to Class A common stockholders - basic (shares)

14,930

Weighted average shares used to compute net income per share attributable to Class A common stockholders - diluted (shares)

94,926

[1]

Net income attributable to CompoSecure, Inc. for the year ended December 31, 2021 is equal to net income for the period subsequent to business combination for the prorated period from December 27, 2021 through December 31, 2021. Net income attributable to non-controlling for the year ended December 31, 2021 is equal to net income for the period from January 1, 2021 through December 31, 2021. See Note 1.

[2]

The amounts for the year ended December 31, 2021 represent basic and diluted net income per share of Class A common stock and weighted average shares of Class A common stock outstanding for the prorated period from December 27, 2021 through December 31, 2021, the period following the Business Combination described in Note 1. See Note 14.

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Interest income	$ 0	$ 52	$ 110

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands

Class A Common Stock

Previously Reported

Common Stock

Class A Common Stock

Revision of Prior Period, Adjustment

Common Stock

Class A Common Stock

Common Stock

Class B Common Stock

Previously Reported

Common Stock

Class B Common Stock

Revision of Prior Period, Adjustment

Common Stock

Class B Common Stock

Common Stock

Previously Reported

Additional Paid-in Capital

Previously Reported

Accumulated Deficit

Previously Reported

Revision of Prior Period, Adjustment

Additional Paid-in Capital

Revision of Prior Period, Adjustment

Accumulated Deficit

Revision of Prior Period, Adjustment

Additional Paid-in Capital

Accumulated Deficit

Total

Beginning balance (shares) at Dec. 31, 2018

61,136,800

Beginning balance at Dec. 31, 2018

$ 0

$ 6

$ 2,625

$ (37,520)

$ (34,895)

$ (6)

$ 0

$ 2,619

$ (37,520)

$ (34,895)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Distributions

(103,808)

Stock-based compensation

1,681

Ending balance (shares) at Dec. 31, 2019

81,473

^[1]

61,136,800

Ending balance at Dec. 31, 2019

$ 0

$ 6

4,300

(59,855)

(55,549)

Beginning balance at Dec. 31, 2018

$ 0

Increase (Decrease) in Redeemable Non-Controlling Interest [Roll Forward]

Ending balance at Dec. 31, 2019

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Distributions

(216,668)

Stock-based compensation

1,848

Ending balance (shares) at Dec. 31, 2020

77,815

^[1]

61,136,800

Ending balance at Dec. 31, 2020

$ 0

$ 6

6,148

(198,708)

(192,554)

Increase (Decrease) in Redeemable Non-Controlling Interest [Roll Forward]

Ending balance at Dec. 31, 2020

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Distributions

(226,643)

Business combinations, PIPE financing and others (in shares)

14,929,982

Business combination, PIPE financing and others

$ 1

(77,981)

(77,980)

Stock-based compensation

6,113

Adjustment of redeemable non-controlling interests to redemption value

13,512

^[1]

(538,409)

Ending balance (shares) at Dec. 31, 2021

14,929,982

61,136,800

Ending balance at Dec. 31, 2021

$ 1

$ 6

$ 12,261

$ (1,028,229)

(1,015,962)

Increase (Decrease) in Redeemable Non-Controlling Interest [Roll Forward]

Adjustment of redeemable non-controlling interests to redemption value

69,902

538,409

Ending balance at Dec. 31, 2021

$ 608,311

[1]

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 27, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net income		$ 83,414	$ (70,352)	$ 77,815	$ 81,473
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		10,428		9,916	8,606
Equity-based compensation expense		6,113		1,848	1,681
Inventory reserve		600		1,157	(473)
Amortization of deferred finance costs		1,654		842	669
Change in fair value of earnout consideration liability	$ (9,575)	(9,575)		0	0
Revaluation of warrant liability	(3,485)	(3,485)		0	0
Deferred tax benefit		(857)		0	0
Changes in assets and liabilities
Accounts receivable		(19,133)		10,249	5,827
Inventories		3,792		(12,866)	(5,678)
Prepaid expenses and other assets		(1,519)		(94)	1,343
Accounts payable		4,637		(456)	(29)
Accrued expenses		1,665		332	(12,725)
Other liabilities		46		(1,681)	492
Net cash provided by operating activities		77,780		87,062	81,186
Cash flows from investing activities
Acquisition of property and equipment		(4,746)		(7,501)	(9,642)
Net cash used in investing activities		(4,746)		(7,501)	(9,642)
Cash flows from financing activities
Business combination and PIPE financing		60,826		0	0
Proceeds from convertible notes		127,400		0	0
Proceeds from line of credit		0		20,000	0
Payment of line of credit		(5,000)		0	(18,000)
Proceeds from term loan		250,000		117,500	76,000
Payment of term loan		(240,000)		(10,500)	(11,000)
Deferred finance costs related to debt origination		(1,860)		(3,199)	(1,032)
Distributions pursuant to the business combination		(218,300)		0	0
Distributions to Holdings' members		(22,334)		(216,668)	(103,808)
Issuance cost related to business combination		(15,244)		0	0
Net cash used in financing activities		(64,512)		(92,867)	(57,840)
Net increase (decrease) in cash and cash equivalents		8,522		(13,306)	13,704
Cash and cash equivalents, beginning of period		13,422	$ 13,422	26,728	13,024
Cash and cash equivalents, end of period	$ 21,944	21,944		13,422	26,728
Supplementary disclosure of cash flow information:
Cash paid for interest expense		10,101		5,317	4,889
Supplemental disclosure of non-cash financing activities:
Issuance costs payable		$ 23,107		$ 0	$ 0

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

CompoSecure, Inc. (“CompoSecure” or the “Company”) is a manufacturer and designer of complex metal, plastic, composite ID and proprietary financial transaction cards. The Company started operations in 2000 and provides products and services primarily to global financial institutions, plastic card manufacturers, government agencies, system integrators, and security specialists. The Company is located in Somerset, New Jersey.

The Company creates newly innovated, highly differentiated and customized quality financial payment products to support and increase its customer acquisition, customer retention and organic customer spend. The Company’s customers consist primarily of leading international and domestic banks and other payment card issuers primarily within the United States (“U.S.”), Europe, Asia, Latin America, Canada, and the Middle East. The Company is a platform for next generation payment technology, security, and Cryptocurrency solutions. The Company maintains trusted, highly-embedded and long-term customer relationships with an expanding set of global issuers. The Company entered the digital asset revolution through the launch of its Arculus platform, which commenced in the third quarter of 2021 with the Arculus Key card and companion Arculus Wallet mobile application. The Company has established a niche position in the financial payment card market through nearly over 20 years of innovation and experience and is focused primarily on this attractive subsector of the financial technology market. The Company serves a diverse set of over 20 direct customers and over 80 indirect customers, including some of the largest issuers of credit cards in the U.S.

On December 27, 2021 (the "Closing Date"), Roman DBDR Tech Acquisition Corp ("Roman DBDR") consummated the merger pursuant to the Merger Agreement, dated April 19, 2021 (the "Merger Agreement"), by and among Roman DBDR, Roman Parent Merger Sub, LLC, a wholly-owned subsidiary of Roman DBDR incorporated in the State of Delaware ("Merger Sub"), and CompoSecure Holdings, L.L.C., a Delaware limited liability company ("Holdings"). Pursuant to the terms of the Merger Agreement, a business combination between the Company and Holdings was effected through the merger of Merger Sub with and into Holdings, with Holdings surviving as the surviving company and as a wholly-owned subsidiary of Roman DBDR (the "Business Combination"). Pursuant to the Business Combination, the merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP.

On the Closing Date, and in connection with the closing of the Business Combination, Roman DBDR changed its name to CompoSecure Inc. Holdings was deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") 805 and was accounted for using the acquisition method of accounting. This determination was primarily based on Holdings’ members prior to the Business Combination having a majority of the voting interests in the combined company, Holdings’ operations comprising the ongoing operations of the combined company, Holdings’ members and officers comprising a majority of the board of directors of the combined company, and Holdings’ senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Holdings issuing stock for the net assets of Roman DBDR, accompanied by a recapitalization. The net assets of Roman DBDR are stated at historical cost, with no goodwill or other intangible assets recorded. While Roman DBDR was the legal acquirer in the Business Combination, because Holdings was deemed the accounting acquirer, the historical financial statements of Holdings became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Holdings prior to the Business Combination; (ii) the combined results of the Company and Holdings following the closing of the Business Combination; (iii) the assets and liabilities of Holdings at their historical cost; and (iv) the Company’s equity structure for all periods presented. In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s common stock, $0.0001 par value per share issued to Holdings’ equity holders in connection with the recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share related to Holdings’ common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the results of operations of the Company and its majority owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to conform to the current year presentation. All dollar amounts are in thousands, unless otherwise noted. Share and per share amounts are presented on a post-conversion basis for all periods presented, unless otherwise noted.

The global outbreak of the COVID-19 pandemic continue to rapidly evolve. The Company has taken a number of measures to monitor and mitigate the effects of COVID-19, such as safety and health measures for the employees and securing the supply of materials that are essential to the Company’s production process. At this stage, the impact on the Company’s business and results has not been significant. However, the ultimate impact of the pandemic on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicated with confidence, including the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, required social distancing and any additional preventative and protective actions that governments, or the Company, may direct, which could result in an extended period of continued business disruption, reduced customer, collaborator, or supplier traffic and reduced operations.

Use of Estimates

The preparation of the consolidated financial statements requires management to make a number of estimates and assumptions relating to the reported amount of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. The Company bases its estimates on historical experience, current business factors and various other assumptions believed to be reasonable under the circumstances, all of which are necessary in order to form a basis for determining the carrying values of assets and liabilities. Actual results may differ from those estimates and assumptions. The Company evaluates the adequacy of its reserves and the estimates used in calculations on an on-going basis. Significant areas requiring management to make estimates include the valuation of equity instruments, measurement of changes in the fair value of earnout consideration liability, estimates of derivative liability associated with the exchangeable notes due December 2026, which will be marked to market each quarter based on a Lattice model approach, changes in the fair value of warrant liabilities, valuation allowances on deferred tax assets which are based on an assessment of recoverability of the deferred tax assets against future taxable income and estimates of the inputs used to calculate the tax receivable agreement liability. See Note 7, 9 and 11 for further discussion of the nature of these assumptions and conditions.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and short-term investments with original maturities from the purchase date of three months or less that can be readily convertible into known amounts of cash.Cash and cash equivalents are held at recognized U.S. financial institutions. Interest earned on the short-term investments is reported in the consolidated statements of operations. The carrying amount of cash and cash equivalents approximates its fair value due to its short and liquid nature.

Accounts Receivable

Accounts receivable are recognized net of allowances for doubtful accounts. In the normal course of business, the Company extends credit to customers that satisfy predefined credit criteria. The Company is required to estimate the collectability of its receivables. Reserves for estimated bad debts are established at the time of sale and are based on an evaluation of accounts receivable aging, and, where applicable, specific reserves on a customer-by-customer basis, creditworthiness of the Company’s customers and prior collection experience to estimate the ultimate collectability of these receivables. At the time the Company determines that a

receivable balance, or any portion thereof, is deemed to be permanently uncollectible, the balance is then written off. The Company did not recognize any accounts receivable allowance for doubtful accounts at December 31, 2021 and 2020.

Inventories

Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out method. Inventories consist of raw material, work in process and finished goods. The Company establishes reserves as necessary for obsolescence and excess inventory. The Company records a reserve for excess and obsolete inventory based upon a calculation using the historical experience, expected future sales volumes, the projected expiration of inventory and specifically identified obsolete inventory.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which ranges from one to ten years. Leasehold improvements are recorded at cost, less accumulated amortization, which is computed on straight-line basis over the shorter of the useful lives of the assets or the remaining lease term.Expenditures for maintenance and repairs are charged to expense as incurred. The Company evaluates the depreciation periods of property and equipment to determine whether events or circumstances indicate that the asset’s carrying value is not recoverable or warrant revised estimates of useful lives.

Revenue Recognition

The Company recognizes revenue in accordance with accounting standard ASC 606 when the performance obligations under the terms of the Company’s contracts with its customers have been satisfied. This occurs at the point in time when control of the specific goods or services as specified by each purchase order are transferred to customers. Specific goods refers to the products offered by the Company, including metal cards, high security documents, and pre-laminated materials. Transfer of control passes to customers upon shipment or upon receipt, depending on the agreement with the specific customers. ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer. The Company did not have any contract assets or liabilities as of December 31, 2021 and 2020.

The Company invoices its customers at the time at which control is transferred, with payment terms ranging between 15 and 60 days depending on each individual contract. As the payment is due within 90 days of the invoice, a significant financing component is not included within the contracts.

The majority of the Company’s contracts with its customers have the same performance obligation of manufacturing and transferring the specified number of cards to the customer. Each individual card included within an order constitutes a separate performance obligation, which is satisfied upon the transfer of goods to the customer. The contract term as defined by ASC 606 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company’s contracts are generally short term in nature.

Revenue is measured in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company accounts for shipping and handling as activities to fulfill its promise to transfer the associated products to its customers. Accordingly, the Company records amounts billed to customers for shipping and handling as revenue. Revenue is recognized net of variable consideration such as discounts, rebates, and returns.

The Company’s products do not include an unmitigated right of return unless the product is non- conforming or defective. If the goods are non-conforming or defective, the defective goods are replaced or reworked or, in certain instances, a credit is issued for the portion of the order that was non- conforming or defective. A provision for sales returns and allowances is recorded based on experience with goods being returned. Most returned goods are re-worked and subsequently re-shipped to the customer and

recognized as revenue. Historically, returns have not been material to the Company. Additionally, the Company has a rebate program with certain customers allowing for a rebate based on achieving a certain level of shipped sales during the calendar year. This rebate is estimated and updated throughout the year and recorded against revenues and the related accounts receivable. The Company did not have any contract assets or liabilities as of December 31, 2021 and 2020.

Shipping and Handling Costs

Amounts billed to customers for shipping and handling are classified as revenue. Costs incurred in shipping and handling are recognized in Cost of goods sold in the consolidated statements of operations. Total Shipping and handling costs were approximately $2,308, $1,596, and $1,752, for the years ended December 31, 2021, 2020, and 2019, respectively.

Advertising

The Company expenses the cost of advertising as incurred. Advertising expense of approximately $17,434, $181, and $313 for the years ended December 31, 2021, 2020, and 2019, respectively, were included in Selling, general and administrative expenses in the consolidated statements of operations.

Income Taxes

Income taxes are applied to the income attributable to the controlling interest (see Note 8 ) as the income attributable to the non-controlling interest is pass-through income. The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company will continue to evaluate the realizability of our deferred tax assets and liabilities on a quarterly basis, and will adjust such amounts in light of changing facts and circumstances, including but not limited to future projections of taxable income, tax legislation, rulings by relevant tax authorities and the progress of ongoing tax audits, if any. we consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized in future periods.

The Company was not subject to income taxes due to the then equity structure of the Company prior to Business Combination and was subject to pass through income taxes. Federal, state and local income tax returns for years prior to 2019 are no longer subject to examination by tax authorities.

Equity-Based Compensation

The Company has equity-based compensation plans and a profits interest which are described in more detail in Note 9. Compensation cost relating to equity-based awards as provided by the arrangements are recognized in the consolidated statements of operations over the requisite service period based on the grant date fair value of such awards. The Company determines the fair value of each option on the date of grant using the Black‑Scholes option pricing model, which is impacted by the fair value of common stock, expected price volatility of common stock, expected term, risk-free interest rates, forfeiture rate and expected dividend yield. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates, in order to derive the Company’s best estimate of awards ultimately expected to vest.

Earnout Consideration

of the Company’s class B common stock), as applicable, in earnout consideration based on the achievement of certain stock price thresholds (collectively, the “Earnouts”). The valuation of the Earnouts was determined using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. The Company classifies the Earnouts as liabilities at their fair value on the consolidated balance sheet and adjusts the fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in revaluation of Earnout consideration liability in the Company's consolidated statements of operations. A portion of the liability was considered compensation and expensed. See Note 9.

Warrant Liability

The Company accounts for the warrants in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value within warrant liability on the consolidated balance sheet and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in revaluation of warrant liability in the Company’s consolidated statements of operations. The Private Placement Warrants were valued using a Black-Scholes option pricing model. The Public Warrants were valued using the quoted market price as the fair value at the end of each balance sheet date. See Note 11 for more details.

Tax Receivable Liability

As a result of the Business Combination, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with Holdings and holders of interests in Holdings. Pursuant to the Tax Receivable Agreement, the Company is required to pay to participating holders of membership units in Holdings 90% of the amount of savings, if any, in U.S. federal, state and local income tax that the Company actually realizes as a result of the utilization of certain tax attributes. The Company recorded $24,500 in tax receivable liability which is recognized in the Company's balance sheet as of December 31, 2021.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses primarily include expenses related to salaries and commissions, transaction costs, and professional fees. Included in SG&A during the years ended December 31, 2021, 2020, and 2019 were salaries and commissions of $16,103, $12,650, and $14,824, transaction costs of $2,784, $264, and $1,065 and professional fees of $8,350, $6,536, and $4,546, respectively.

Net Income (Loss) Per Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. The weighted-average number of common shares outstanding during the period includes Class A common stock but is exclusive of Class B common stock as these shares have no economic or participating rights. The Company applies the lower of the treasury stock method or the two-class method in calculating net income (loss) per common share. Diluted net income per share is computed by dividing the net income by the basic weighted-average number of common shares outstanding during the period, adjusted for the potentially dilutive shares of common stock equivalents resulting from the assumed exercise of the warrants, Earnouts, equity awards, Class B units and exchangeable notes only if the effect is not anti-dilutive.

Market and Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of investments in cash, cash equivalents, short-term investments and accounts receivable. The Company’s primary exposure is credit risk on receivables as the Company does not require any collateral for its accounts receivable. Credit risk is the loss that may result from a trade customer’s or counterparty’s nonperformance. The Company uses credit policies to control credit risk, including utilizing an established credit approval process, monitoring customer and counterparty limits, monitoring changes in a customer’s credit rating, employing credit

mitigation measures such as analyzing customers’ financial statements, and accepting personal guarantees and various forms of collateral. The Company believes that its customers and counterparties will be able to satisfy their obligations under their contracts.

The Company maintains cash, cash equivalents with approved federally insured financial institutions. Such deposit accounts at times may exceed federally insured limits. The Company is exposed to credit risks and liquidity in the event of default by the financial institutions or issuers of investments in excess of FDIC insured limits. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution if required. The Company has not experienced any losses on such accounts.

Fair Value Measurements

The Company determines fair value in accordance with ASC 820 which established a hierarchy for the inputs used to measure the fair value of financial assets and liabilities based on the source of the input, which generally range from quoted prices for identical instruments in a principal trading market i.e. Level 1 to estimates determined using significant unobservable inputs i.e. Level 3. The fair value hierarchy prioritizes the inputs, which refer to assumptions that market participants would use in pricing an asset or liability, based upon the highest and best use, into three levels as follows:

The standard describes three levels of inputs that may be used to measure fair value::

●

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

●

Level 2: Observable inputs other than unadjusted quoted prices in active markets for identical assets or liabilities such as:

●

Quoted prices for similar assets or liabilities in active markets

●

Quoted prices for identical or similar assets or liabilities in inactive markets

●

Inputs other than quoted prices that are observable for the asset or liability

●

Inputs that are derived principally from or corroborated by observable market data by correlation or other mean

●

Level 3: Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions.

The Company’s financial assets and liabilities measured at fair value consisted of cash and cash equivalents, accounts receivable and accounts payable, debt, warrants and earnout consideration. Cash and cash equivalents consisted of bank deposits and short-term investments, such as money market funds, the fair value of which is based on quoted market prices, a Level 1 fair value measure. As of December 31, 2021 and December 31, 2020, the carrying values of cash, accounts receivable and accounts payable approximate fair value because of the short-term maturity of these instruments. The fair value of the Company's debt approximates the carrying value for all periods presented. The Company follows the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. See Note 11.

Segments

The Company is managed and operated as one business as the entire business is managed by a single management team that reports to the Chief Executive Officer and President. The Company’s chief operating decision-maker is its Chief Executive Officer and President, who makes resource allocation decisions and assesses performance based on financial information presented on an aggregate basis.The Company does not operate separate lines of business with respect to any of its products and does not prepare discrete financial information to allocate resources to separate products or by location. Accordingly, the Company views its business as one reportable operating segment.

Recent Accounting Pronouncements — Adopted

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06") to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company's financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted the new lease guidance effective January 1, 2021 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2021. The Company elected the package of practical expedients which permits to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. The Company did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change the Company’s previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $6,298 and lease liabilities of $6,875. The difference between the ROU assets and the lease liabilities is primarily due to unamortized lease incentive and deferred rent related to the Company’s operating leases at December 31, 2020.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilized its incremental borrowing rate (“IBR”), which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2021 adoption date. The Company utilized a synthetic credit rating model including fundamental analysis per S&P Global Market Intelligence. The Company then utilized the Bloomberg BVAL Pricing Source to determine the option-adjusted spread and added the United States Treasury Constant Maturity for the applicable terms to determine the term structure of the IBR. Based on these calculations, the Company determined applicable discount rates for various points along the yield curve as of January 1, 2021. As a reasonableness check for the yield curve, the Company considered its then revolving credit agreement amendment on November 5, 2020, which extended the term of the agreement through November 5, 2023. The base interest rate on the loan was calculated as LIBOR plus 300 bps which approximates 3.41%. This rate was generally consistent with the yield curve derived, thus the Company determined that the yield curve was appropriate for determining the discount rates for its leases. The Company then interpolated the discount rates in the yield curve to determine the discount rate for each of its existing leases at January 1, 2021.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives incurred, if any. The Company’s lease terms may include options to extend the lease when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of 1 year to 5 years, some of which include options to extend the lease term for up to 3 years.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. The Company has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, the Company will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight line basis over the term of the lease.

Operating Leases

The Company through its wholly-owned subsidiary Holdings leases certain office space and manufacturing space under arrangements currently classified as leases under ASC 842. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal options ranging from 1 to 5 years. The exercise of lease renewal options is at the Company’s sole discretion.

Effective April 1, 2012, the Company entered into a 10-year lease for its office and manufacturing facilities in Somerset, New Jersey terminating in 2022. The lease contains escalating rental payments, exclusive of required payments for increases in real estate taxes and operating costs over base period amounts. The agreement provides for a five year renewal option. The lease provides for monthly payments of rent during the lease term. These payments consist of base rent, and additional rent covering customary items such as charges for utilities, taxes, operating expenses, and other facility fees and charges. The base rent is currently approximately $324 per year, which reflects an annual 3% escalation factor. The Company exercised its renewal option in December 2020.

Effective August 1, 2014, the Company entered into a 4-year lease for additional office and manufacturing space in Somerset, New Jersey terminating in July 31, 2018. The lease contains escalating rental payments. The Company has the option to extend the term for two periods of two years each. The Company has exercised both renewal options with last one exercised in 2020. The base rent is currently approximately $106 per year, which reflects an annual 3% escalation factor.

Effective June 16, 2016, the Company entered into a 10-year lease for a new facility. The lease contains escalating rental payments and terminates on September 30, 2026. The agreement also provides for a renewal option at a fixed rate. The base rent is currently approximately $825 per year, which reflects an annual 3% escalation factor.

The Company’s leases have remaining lease terms of 1 to 5 years. The Company does not include any renewal options in lease terms when calculating lease liabilities as the Company is not reasonably certain that it will exercise these options. Two of our leases include the early termination option in the lease term, however, it was not included in the lease terms when calculating the lease liability since the Company determined that it is reasonably certain it will not terminate the leases prior to the termination date.

The weighted-average remaining lease term for our operating leases was 4.8 years at December 31, 2021. The weighted-average discount rate was 3.73% at December 31, 2021.

ROU assets and lease liabilities related to our operating leases are as follows:


	Balance Sheet Classification	December 31, 2021
Right-of-use assets	Right of use assets	$	5,246
Current lease liabilities	Current portion of lease liabilities		1,119
Non-current lease liabilities	Non-current portion of lease liabilities		4,709

The Company has lease agreements that contain both lease and non-lease components. The Company accounts for lease components together with non-lease components (e.g., common-area maintenance). Variable lease costs are based on day to day

common-area maintenance costs related to the lease agreements and are recognized as incurred. The components of lease costs were as follows:


	Twelve-month period ended
	December 31, 2021
Operating lease cost	$	1,305
Variable lease cost		444
Total lease cost	$	1,749

Future minimum commitments under all non-cancelable operating leases are as follows:


2022	$	1,294
2023		1,298
2024		1,263
2025		1,302
2026		1,096
Later years		97
Total lease payments		6,350
Less: Imputed interest		522
Present value of lease liabilities	$	5,828

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:


	Twelve-month period ended
	December 31, 2021
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	1,272
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	—

Recent Accounting Pronouncements – Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ("ASU 2020-04"). ASU 2020-04 provides optional guidance for a limited period of time to ease potential accounting impact associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate ("LIBOR"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. The amendments in ASU 2020-04 can be adopted as of March 12, 2020 and are effective through December 31, 2022. However, it cannot be applied to contract modifications that occur after December 31, 2022. LIBOR was expected to be phased out at the end 2021. We do not currently have any contracts that have been changed to a new reference rate, but we will continue to evaluate our contracts and the effects of this standard on our consolidated financial statements prior to adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. This new standard amends the current guidance on the impairment of financial instruments and adds an impairment model known as current expected credit loss (CECL) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses. The FASB subsequently issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments — Credit Losses to clarify and address certain items related to the amendments in ASU 2016-13. ASC 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim reporting periods within those fiscal years

with early adoption permitted. The Company does not anticipate a significant impact on its consolidated financial statements based on its historical trend of bad debt expense relating to trade accounts receivable.

BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2021

Reverse Recapitalization [Abstract]

BUSINESS COMBINATION

3. BUSINESS COMBINATION

On December 27, 2021 (the “Closing Date”), Roman DBDR consummated its Business Combination, pursuant to that Merger Agreement dated April 19, 2021, by and among Roman DBDR, Merger Sub, Holdings and LLR Equity Partners IV, L.P. as subsequently amended by that certain Amendment No. 1 to the Merger Agreement dated as of May 25, 2021 (the “First Amendment” and the Original Merger Agreement as amended by the First Amendment, the “Merger Agreement”). Holdings is considered the Company’s accounting predecessor. On the Closing Date, the Merger Sub of Roman DBDR merged with and into Holdings, with Holdings surviving as a wholly owned subsidiary of Roman DBDR. Upon consummation of the Business Combination, Holdings amended and restated its limited liability company agreement (the “Second Amended and Restated LLC Agreement”) and the holders of issued and outstanding equity of Holdings received a combination of cash consideration, certain newly-issued membership units of Holdings (each, a “Holdings Unit”) and shares of newly-issued Class B Common Stock of the Company, which have no economic value, but entitle the holder to one vote per issued share and were issued on a one-for-one basis for each Holdings Unit retained by the holder following the Merger; the holders of outstanding options to purchase Holdings equity received a combination of cash consideration and options to purchase shares of Class A Common Stock of the Company and the Company received all of the voting units in Holdings. The Holdings’ Second Amended and Restated LLC Agreement, together with an Exchange Agreement entered into at the closing of the transactions contemplated by the Merger Agreement, provides the holders of Holdings Units the right to exchange the Holdings Units, together with the cancellation of an equal number of shares of Class B Common Stock, for Class A Common Stock, subject to certain restrictions set forth therein.

Following the Closing, the Company is organized in an “Up-C” structure with a Board of Managers appointed by the Board of Directors of the Company controlling Holdings in accordance with the terms of the Holdings’ Second Amended and Restated LLC Agreement. In addition to the consideration paid at Closing as described above, Holdings’ equity holders have the right to receive an aggregate of up to 7,500,000 additional (i) shares of Class A Common Stock or (ii) Holdings Units (and a corresponding number of shares of Class B Common Stock), as applicable, in earn-out consideration based on the achievement of certain stock price thresholds (collectively, the “Earnouts”).

Concurrent with Closing, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with Holdings and holders of interests in Holdings. Pursuant to the Tax Receivable Agreement, the Company is required to pay to participating holders of membership units in Holdings 90% of the amount of savings, if any, in U.S. federal, state and local income tax that the Company actually realizes as a result of the utilization of certain tax attributes. In addition, concurrent with the Closing, the Company entered into a stockholders agreement (the “Stockholders Agreement”) with certain equity holders of the Company relating to the voting for directors of the Company and containing certain lock-up restrictions, as well as a registration rights agreement that provides customary registration rights to certain equity holders of the Company.

In connection with the execution of the Business Combination, the Company entered into separate subscription agreements (each, a "Subscription Agreement") with a number of investors ("Note Holders"), pursuant to which the Note Holders agreed to purchase, and the Company agreed to sell to the Note Holders, an aggregate of 4,500,000 shares of the Company’s class A common stock (the "PIPE Shares"), for a purchase price of $10.00 per share and an aggregate purchase price of $45,000, in a private placement pursuant to the subscription agreements (the "PIPE"). The PIPE investment closed simultaneously with the consummation of the Business Combination.

The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Roman DBDR was treated as the "acquired" company for financial reporting purposes. See Note 1, Description of Organization and Business Operations, for further details. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Holdings issuing stock for the net assets of Roman DBDR, accompanied by a recapitalization. The net assets of Roman DBDR are stated at historical cost, with no goodwill or other intangible assets recorded.

The following summarizes the net contributions received from the Business Combination and PIPE financing:


	Recapitalization
Cash - Roman DBDR’s trust and cash (net of redemptions)	$	47,359
Cash - PIPE (Common)		45,000
Cash - PIPE (Exchangeable Notes)		130,000
Less: transaction costs and advisory fees paid		(34,132)
Net Business Combination and PIPE financing	$	188,226

The following table describes the number of shares of common stock issued immediately following the consummation of the Business Combination:


		Number of Shares
Common stock, outstanding prior to Business Combination		23,156,000
Less: redemption of Roman DBDR shares		(18,515,018)
Common stock of Roman DBDR		4,640,982
Roman DBDR Founder Shares		5,789,000
Shares issued in PIPE		4,500,000
Business Combination and PIPE financing shares - Class A common stock		14,929,982
Class B common stock held by Holdings		61,136,800
Total shares of common stock - Class A and Class B immediately after Business Combination		76,066,782

REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

4. REVENUE RECOGNITION

The Company recognizes revenue when the performance obligations under the terms of the Company’s contracts with its customers have been satisfied. This occurs at the point in time when control of the specific goods as specified by each purchase order are transferred to customers. Specific goods refers to the products offered by the Company, including metal cards, high-security documents, and pre-lam materials. Transfer of control passes to customers upon shipment or upon receipt, depending on the agreement with the individual customers. The Company invoices its customers at the time at which control is transferred, with payment terms ranging between 15 and 60 days depending on each individual contract. As the payment is due within 90 days of the invoice, a significant financing component is not included within the contracts. The majority of the Company’s contracts with its customers have the same performance obligation of manufacturing and transferring the specified number of cards to the customer. Each individual card included within an order constitutes as a separate performance obligation, which is satisfied upon the transfer of goods to the customer. The contract term as defined by ASC 606 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company’s contracts are generally short term in nature. Revenue is measured in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company accounts for shipping and handling as activities fulfill its promise to transfer the associated products to its customers. Accordingly, the Company records amounts billed for shipping and handling costs as a component of net sales, and classifies such costs as a component of costs of sales. Revenue is recognized net of variable consideration such as discounts, penalties, rebates, and returns. The Company’s products do not include an unmitigated right of return unless the product is damaged or defective. If the goods are non- conforming or defective, the defective goods are replaced or reworked or in certain instances a credit is issued for the portion of the order that was non-conforming. Historically, returns have not been material to the Company.

Disaggregation of Revenue

The percentages present the Company’s revenue disaggregated by customer. The majority of the Company’s revenue is earned within these major contracts, with aggregate revenue from the three top customers comprising approximately 79.1%, 74.9% and 82.5% of total revenue in 2021, 2020 and 2019, respectively.

Significant Judgments in Application of the Guidance

The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize:

Determination of Transaction Price

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. In addition, several contracts include variable consideration such as specific sales prices based on certain volume thresholds, discounts, penalties, rebates, refunds, and the customer’s right to return. The Company has concluded that its estimation of variable consideration results in an adjustment to the transaction price such that it is probable that a significant reversal of cumulative revenue would not occur in the future. The accrual for variable consideration is netted against the sale price in determining the transaction price.

Assessment of Estimates of Variable Consideration

Many of the Company’s contracts with customers contain some component of variable consideration. The Company estimates variable consideration, such as discounts, rebates such as volume based rebate, penalties, and credits, using the expected value method, and adjusts transaction price for its estimate of variable consideration. Throughout the year, we record an accrual that nets down our revenue based on our best estimate of the impact of variable consideration based on cards shipped in each month of the year. We regularly revisit this accrual throughout the year to ensure we are tracking to the correct offset. This effectively factors the volume based rebate into the transaction price. Therefore, management applies the constraint in its estimation of variable consideration for inclusion in the transaction price such that it is probable that a significant reversal of cumulative revenue would not occur in the future.

Allocation of Transaction Price

The transaction price (including any discounts) is allocated between goods in a multi-element arrangement based on their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. Significant judgment may be required to determine standalone selling prices for each performance obligation and whether it depicts the amount the Company expects to receive in exchange for the related goods.

Practical Expedients and Exemptions

As permitted by ASC 606, the Company elected to use certain practical expedients in connection with the implementation of ASC 606. The Company treats shipping and handling activities as fulfillment activities. The Company treats costs associated with obtaining new contracts as expenses when incurred if the amortization period of the asset we would recognize is one year or less. The Company does not adjust the transaction price for significant financing components, as the Company’s contracts typically do not contain provisions for significant advance or deferred payments, nor do they span more than a one year period. The Company applies the optional exemption to not disclose information regarding the allocation of transaction price to remaining performance obligations with an original expected duration of less than one year. The Company applies the practical expedient to not separately evaluate the effects of each contract modification before January 1, 2019. The election of these practical expedients results in accounting treatments that the Company believes are consistent with historical accounting policies and, therefore, these elections of practical expedients do not have a material impact on the comparability of the consolidated financial statements.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Property, Plant and Equipment [Abstract]

INVENTORIES

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

INVENTORIES

5.	INVENTORIES

The major classes of inventories were as follows:


	December 31,
	2021		2020
Raw materials	$	27,474	$	27,157
Work in process		582		1,055
Finished goods		363		3,998
Inventory reserve		(2,613)		(2,013)
	$	25,806	$	30,197

The Company reviews inventory for slow moving or obsolete amounts based on expected product sales volume and provides reserves against the carrying amount of inventory as appropriate.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2021

PROPERTY AND EQUIPMENT

6.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


		December 31,
	Useful Life	2021		2020
Machinery and equipment	5 – 10 years	$	59,437	$	57,360
Furniture and fixtures	3 – 5 years		955		955
Computer equipment	3 – 5 years		925		908
Leasehold improvements	Shorter of lease term or estimated useful life		11,358		10,875
Vehicles	5 years		264		264
Software	1 – 3 years		2,889		1,186
Construction in progress			985		519
Total			76,813		72,067
Less: Accumulated depreciation and amortization			(54,636)		(44,208)
Property and equipment, net		$	22,177	$	27,859

Depreciation and amortization expense for the years ended December 31, 2021, 2020, and 2019, was $10,428, $9,916, and $8,606, respectively.

DEBT

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

DEBT

DEBT

Exchangeable Senior Notes

On April 19, 2021, concurrently with the execution of the Merger Agreement, the Company and its wholly owned subsidiary, Holdings entered into subscription agreements (the “Note Subscription Agreements”) with certain investors ("Notes Investors") pursuant to which such Notes investors, severally and not jointly, purchased on the Closing Date of the Business Combination, senior notes (the “Exchangeable Notes”) issued by the Company and guaranteed by the Company’s wholly owned subsidiary, Holdings in an aggregate principal amount of up to $130,000,000 that are exchangeable into shares of Class A common stock at a conversion price of $11.50 per share, subject to the terms and conditions of an Indenture entered by the Company and its wholly owned subsidiary, Holdings and the trustee under the Indenture. The Exchangeable Notes will bear interest at a rate of 7% per annum, payable semiannually in arrears. The Exchangeable Notes will mature in five years on December 27, 2026. The Company will settle any exchange of the Exchangeable Notes in shares of Class A common stock, with cash payable in lieu of any fractional shares. In

connection with the issuance of the Exchangeable Notes, the Company entered into a Registration Rights Agreement, pursuant to which the Notes Investors received certain registration rights with respect to the Class A Common Stock.

Exchangeable Note shall bear interest at the rate of 7.00% per year from December 27, 2021, or from the most recent date to which interest has been paid or provided for to, but excluding, the next scheduled interest payment date until December 15, 2026, unless earlier repurchased or converted pursuant to and in accordance with the provisions of the Indenture. Interest is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2022, to holders of record at the close of business on the preceding June 1 and December 1 (whether or not such day is a Business Day), respectively. Additional interest may be payable as set forth in the Indenture.

After the three-year anniversary of the Closing Date, the Exchangeable Senior Notes will be redeemable at any time and from time to time by the Company, in whole or in part, (i) if the Last Reported Sale Price of the Class A common stock exceeds 130% of the exchange price as defined in Indenture then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (ii) so long as a registration statement registering the resale of all Exchange Shares is effective and available for use by holders of Exchangeable Notes during the entirety of the period from and including the date notice of redemption is given to and including the date of redemption. The notice period for any redemption will be no less than 30 scheduled trading days. The redemption price in any such redemption shall be equal to (a) 100% of the principal amount of the Exchangeable Notes to be redeemed, plus (b) accrued and unpaid interest to, but excluding, the redemption date. The redemption price is payable in cash.

Per the terms of the Indenture, holders of Exchangeable Notes in connection with any such redemption will receive a make-whole payment equal to the aggregate dollar value of all interest payable from the date the Company delivers notice of such redemption through the maturity of the Exchangeable Notes. The redemption Make-Whole Amount is payable, at the Company’s option, in cash or through an increase in the exchange rate then applicable to the Exchangeable Notes by an amount equal to (i) the redemption Make-Whole Amount divided by (ii) the five day VWAP with regard to the Class A common stock during the five trading period beginning on the trading day immediately following the notice of redemption.

Holders of Exchangeable Notes may exchange their notes in whole or in part, at any time or from time to time, for shares of the Company’s Class A common stock, par value $0.0001 per share up to a maximum exchange rate of 99.9999 shares per $1,000 principal amount after adjustments as defined in the indenture.

Exchangeable Notes contains customary anti-dilution adjustments, taking into account the agreed terms in Indenture. To avoid doubt, among other customary adjustments, this will include anti-dilution protections for dividends and distributions of the Company’s capital stock, assets and indebtedness. Per terms of the Indenture, the following are the anti-dilution adjustments of the Exchange Rate:

If the Company exclusively issues shares of common stock as a dividend or distribution on shares of the common stock, or if the Company effects a share split or share combination;

If the Company issues to all or substantially all holders of the common stock any rights, options or warrants (other than pursuant to a stockholders rights plan) entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the common stock at a price per share that is less than the average of the last reported sale prices of the common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the date of announcement of such issuance;

If the Company distributes shares of its capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its capital Stock or other securities of the Company, to all or substantially all holders of the common stock;

If any cash dividend or distribution is made to all or substantially all holders of the common stock

If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the common stock exceeds the average of the last reported sale prices of the common stock over the 10 consecutive trading day period commencing on, and including, the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.

The exchange rate will in no event be adjusted down pursuant to the provisions described above, except to the extent a tender or exchange offer is announced but not consummated.

If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, the exchange rate will be adjusted per the adjustment table included in the Indenture. If a fundamental change occurs at any time prior to the maturity date, each holder shall have the right, at such holder’s option, to require the Company to repurchase for cash all of such holder’s Exchangeable Notes at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest thereon. There is no make-whole payment associated with a fundamental change redemption.

Holders of Exchangeable Notes will be entitled to the resale registration rights under the resale Registration Rights Agreement. If a Registration default occurs, additional interest will accrue, equal to 0.25% in the first 90 days and 0.50% after the 91^st day after the Registration Default (which includes that the Registration Statement has not been filed, or deemed effective or ceases to be effective).

The Indenture contains customary terms and covenants and events of default. Upon an event of default as defined in the Indenture, the trustee or the holders of at least 25% in aggregate principal amount of the Exchangeable Notes may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration, the same shall become and shall automatically be immediately due and payable. Upon an event of default in the payment of interest, the Company may elect the sole remedy to be the payment of additional interest of 0.25% for the first 90 days after the occurrence of such an event of default and 0.50% for day s 91-180 after the occurrence of such an event of default.

The Company assessed all terms and features of the Exchangeable notes in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the Exchangeable notes, including the conversion, put and call features. In consideration of these provisions, the Company determined that the optional redemption with a make-whole provision feature required bifurcation. The fair value of the optional redemption with a make-whole provision feature derivative was determined based on the difference between the fair value of the notes with the redemption with a make-whole provision feature and the fair value of the notes without the redemption with a make-whole provision feature. The Company employed a Lattice model and determined that the fair value of the derivative upon issuance of the notes was $552 and recorded this amount as derivative liability with an offsetting amount as a debt discount as a reduction to the carrying value of the notes on the closing date, or December 27, 2021. The optional redemption with a make-whole provision feature will be measured at fair value on a quarterly basis and the change in the fair value for the period will be recorded on the consolidated statements of operations. The Company determined that the change in fair value from December 27, 2021 to December 31, 2021 was not material.

The Company determined that the expected life of the Exchangeable Notes was equal to the period through December 27, 2026 as this represents the point at which the Exchangeable Notes will mature unless earlier converted in accordance with their terms prior to such date. For the year ended December 31, 2021, the Company recognized $0.2 million of interest expense related to the Exchangeable Notes at the effective interest rate of 7.4%. The fair value of the Company’s Exchangeable Notes approximate the carrying value of the debt.

In connection with the issuance of the Exchangeable Notes, the Company incurred approximately $2,600 of debt issuance costs, which primarily consisted of underwriting fees, and allocated these costs to the liability component and recorded as a reduction in the carrying amount of the debt liability on the balance sheet. The portion allocated to the Exchangeable Notes is amortized to interest expense over the expected life of the Exchangeable Notes using the effective interest method.

Term Loan

On July 26, 2016, the Company obtained a $120 million credit facility with JP Morgan Chase (“JPMC”) acting as the lending agent (“2016 Credit Facility”). The 2016 Credit Facility provided a revolving loan (“Revolver”) with a maximum aggregate amount of $40 million, and a $80 million term loan (“Term Loan”).

In July of 2019, the Company amended its 2016 Credit Facility with JPMC, increasing the maximum aggregate amount available under the revolver to $60,000 and the amount of the term loan to $140,000. In addition, the maturity date of both the revolver and term loan was amended to July 2, 2022. This amendment was accounted for as a modification and approximately $1,065 of additional costs incurred in connection with the modification were capitalized as debt issuance costs. In connection with the amendment, the prior outstanding balance of $64,000 along with $100 of interest was paid-off. Further, two of the lenders in the original agreement did not participate in the amended debt agreement. As such, the balances related to these two lenders were written off by the Company.

In November of 2020, the Company entered into a new agreement with JPMC to refinance its existing July 2019 credit facility, increasing the maximum aggregate amount available under the term loan to $240,000 bringing total credit facility to $300,000. In addition, the maturity date of both the revolver and term loan was amended to November 5, 2023. This amendment was accounted for as a modification and approximately $3,200 of additional costs incurred in connection with the modification capitalized as debt issuance costs. In connection with the amendment, the prior outstanding balance were paid-off. Further, one of the lenders in the original agreement did not participate in the amended debt agreement. As such, the balance related to that lender was written off by the Company.

In December of 2021, the Company entered into a new agreement with JPMC to refinance its then existing November 2020 credit facility, increasing the maximum aggregate amount available under the term loan to $250,000 bringing total credit facility to $310,000. In addition, the maturity date of both the revolver and term loan was amended to December 16, 2025. This amendment was accounted for as a modification and approximately $1,800 of additional costs incurred in connection with the modification capitalized as debt issuance costs.

Interest on the Revolver and Term Loan are based the outstanding principal amount during the interest period multiplied by the fluctuating bank prime rate plus the applicable margin of 2.00% or for portions of the debt converted to Euro Loans the quoted LIBOR rate plus the applicable margin of 3.00%. At December 31, 2021 and 2020, the effective interest rate on the Revolver and Term Loan was 3.65% and 4.36% per annum, respectively. Interest is payable monthly in arrears or upon maturity of the Euro loans that can run 30, 90, 120, 180 day time periods. The Company must pay quarterly an annual commitment fee of 0.40% on the unused portion of the $60 million Revolver commitment.

The credit facility is secured by substantially all of the assets of the Company. The terms of the credit facilities impose financial covenants including a minimum interest coverage ratio, a maximum total debt to EBITDA ratio and a minimum fixed charge coverage ratio. At December 31, 2021, the Company was in compliance with all financial covenants.

The Company recognized $11,928, $6,142 and $5,453, of interest expense related to the Exchangeable Notes, Revolver and Term Loan for the years ended December 31, 2021, 2020, and 2019, respectively.

The balances payable under all borrowing facilities are as follows:


	December 31,		December 31,
	2021		2020
Total debt	$	380,000	$	240,000
Less: current portion of term loan (scheduled payments)		12,500		24,000
Less: debt discount and debt issuance costs, net		7,471		4,113
Total long-term debt	$	360,029	$	211,887
Derivative liability - redemption with a make-whole provision	$	552	$	—

The maturity of the all the borrowings facilities is as follows:


Years
2022	$	12,500
2023		18,750
2024		18,750
2025		200,000
2026		130,000
Total debt	$	380,000

The Company is exposed to interest rate risk on variable interest rate debt obligations. On November 5, 2020, to manage interest rate risk, the Company entered into an interest rate swap agreement ("November 2020 swap agreement") to hedge forecasted interest rate payments on its variable rate debt. At December 31, 2021, the Company’s interest rate swap contract outstanding had a notional amount of $100,000 maturing in November 2023. The Company has designated the interest rate swap as a cash flow hedge for accounting purposes utilizing the hypothetical derivative method. The Company has determined the fair value of the interest rate swap to be zero at the inception of the agreement. The Company has determined the fair value of the interest rate swap to be immaterial at each reporting period and therefore, in the consolidated statements of operations, the Company reflects only the realized gains and losses of the actual monthly settlement activity of the interest rate swap. The Company does not reflect the unrealized changes in fair value of the interest rate swap at each reporting period, and similarly a derivative asset or liability is not recognized at each reporting period in the Company’s financial statements.

In January 2022, the Company cancelled the November 2020 swap agreement and entered into a new interest rate swap agreement with a notional amount of $125,000 maturing in December 2025. The terms and conditions of the new contracts were similar to the November 2020 swap agreement.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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EQUITY STRUCTURE

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

EQUITY STRUCTURE

8. EQUITY STRUCTURE

Shares Authorized

As of December 31, 2021, the Company had authorized a total of 250,000,000 shares for issuance designated as Class A common stock, 75,000,000 designated as Class B common stock and 10,000,000 shares designated as preferred stock. As of December 31, 2021, there were 14,929,982 shares of Class A Common Stock issued and outstanding, 61,136,800 shares of Class B Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding.

Warrants

As of December 31, 2021, the Company had 10,837,400 shares private warrants outstanding. Each private warrant entitles the registered holder to purchase share of Class A common stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination. The exercise price and number of common shares issuable upon exercise of the private warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the private warrants will not be adjusted for issuance of common stock at a price below its exercise price.

As of December 31, 2021, the Company had 11,578,000 shares public warrants outstanding. Each public warrant entitles the registered holder to purchase one share of the Company’s Class A Common Stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares.

Non-Controlling Interest

Non-controlling interests represent direct interests held in Holdings other than by the Company immediately after the Business Combination. The non-controlling interests in the Company are represented by Class B Units, or such other equity securities in the Company as the Board may establish in accordance with the terms hereof. Since the non-controlling interests are redeemable for cash at the option of the Company subject to the terms and conditions, they have been classified as temporary equity on the consolidated balance sheet in accordance with ASC 480. Income tax benefit or provision is applied to the income attributable to the controlling interest as the income attributable to the non-controlling interest is pass-through income. The Company may only issue Class A Units to the parent CompoSecure Inc.The non-controlling interest has been adjusted to redemption value as of December 31, 2021 in accordance with ASC 480-10-S99-3A. This measurement adjustment results in a corresponding adjustment to shareholders’ deficit through adjustments to additional paid-in capital and retained earnings. The redemption value of the Class B Units was $608,311 on December 31, 2021. The redemption value is calculated by multiplying the 61,136,800 Class B Units by the $9.95 trading price of our Class A common stock on December 27, 2021.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION

12 Months Ended

Dec. 31, 2021

EQUITY COMPENSATION

9.	EQUITY COMPENSATION

Equity Incentive Plan

In connection with the business combination consummated on December 27, 2021, the Company established CompoSecure, Inc. 2021 Incentive Equity Plan (the “2021 Plan”) effective as of December 27, 2021. The purpose of the 2021 Plan is to provide eligible employees of the Company and its subsidiaries, certain consultants and advisors who perform services for the Company or its subsidiaries, and non-employee members of the Board of directors of the Company, with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, and other stock-based awards. The aggregate authorized number of shares of Class A common stock that may be issued or transferred as of December 31, 2021 under the Plan is 8,987,609 shares of Class A common stock plus the number of shares of Class A stock underlying grants issued under the Company’s existing amended and restated equity compensation Plan that expire, terminate or are otherwise forfeited without being exercised. Commencing with the first business day of each calendar year beginning in 2022, the aggregate number of shares of Class A Stock that may be issued or transferred under the Plan shall be increased by an amount of shares of Class A Stock equal to 4% of the aggregate number of shares of Class A stock and Class B stock outstanding as of the last day of the immediately preceding calendar year, or such lesser number of shares of Class A Stock as may be determined by the Board. There were no awards granted or outstanding under the 2021 Plan as of December 31, 2021.

Employee Stock Purchase Plan

Effective December 27, 2021, the Board approved the Employee Stock Purchase Plan (the “ESPP”). The Company authorized 1,650,785 aggregate number of shares of Class A Common Stock reserved for sale pursuant to the ESPP Plan as of December 31, 2021. The number of shares of Class A Common Stock reserved for sale under the ESPP will automatically increase on the first trading day in January each calendar year during the term of the ESPP, beginning with the 2022 calendar year, by 1% of the total number of shares of class A common stock and class B common stock outstanding on the last trading day in the immediately preceding calendar month, but in no event shall any such annual increase exceed 1,686,531 shares or a lesser number of shares as determined by the administrator of the ESPP. The ESPP permits participating eligible employees to purchase class A common stock, with after-tax payroll deductions, on a quarterly basis at a 15% discount at the closing price of the Common Stock on the Nasdaq on the first day of the offering period. The Board may suspend or terminate the ESPP at any time to become effective immediately following the close of any offering period. As of December 31, 2021, there were 1,650,785 shares of common stock remaining authorized for issuance under the ESPP. The Company will recognize the discount on the Common Stock issued under the ESPP as stock-based compensation expense in the period in which the employees will begin participating in the ESPP.

Holdings’ 2015 Incentive Plan

Holdings’ May 2015 equity incentive Plan (the “2015 Plan”) provided for the grant of options, Class C unit appreciation rights, restricted Class C units, unrestricted Class C unit awards and other equity awards to certain employees and officers. The exercise price

of unit options granted under the 2015 Plan was equal to the fair market value of the Holdings’ members’ equity at the date of grant. Options vest and become exercisable incrementally over a 5-year and 4-year period, depending on the grant. The options also provided for accelerating vesting if there is a change in control as described in the Plan agreement. The options expire on the 10th anniversary of the grant date Outstanding awards under the 2017 Plan continue to be subject to the terms and conditions of the 2017 Plan.

Upon consummation of the Business Combination on December 27, 2021 (see Note 3), Holdings amended and restated its 2015 Plan and the holders of issued and outstanding equity of 2015 Plan received a combination of cash consideration, certain newly-issued membership units of Holdings and shares of newly-issued class B common stock of the Company, which have no economic value, but entitle the holder to one vote per issued share and were issued on a one-for-one basis for each Holdings Unit retained by the holder following the Merger. All incentive units available for grants under the 2015 Plan at the time of the consummation will be made available for new award grants under the 2021 Plan and no further awards will be granted under the 2015 Plan. As a result, all of the options, whether vested or unvested, outstanding immediately prior to the merger that were not settled as part of the transaction were assumed by the Company and converted into an option to purchase shares of class A common stock. Each converted options continue to have and be subject to substantially the same material terms and conditions as were applicable to such options under the 2015 Plan except that each converted option shall be exercisable for, and represent the right to acquire, that number of shares of Class A common stock equal to the product (rounded down to the nearest whole number) of (A) the number of Units subject to the converted option immediately before the merger effective time multiplied by (B) the equity award exchange Ratio at an exercise price per share equal to the quotient of (i) the exercise price per unit of such converted option immediately before the consummation of the Business Combination divided by (ii) the Equity Award Exchange Ratio (rounding the resulting exercise price up to the nearest whole cent). Except as specifically provided in the Business Combination Agreement, following the Business Combination, each exchanged option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Holdings 2015 Plan immediately prior to the consummation of the Business Combination. As a result of the modification, all of 9,778 options outstanding right before the Business Combination were recapitalized into 6,823,006 options of which 1,413,235 were settled and 5,409,771 remain outstanding at December 31, 2021. There was no incremental expense recognized since the options were recapitalized with terms consistent with prior awards and there were no incremental changes to fair value. There were a total of twelve grantees affected by the recapitalization.

Earnout Consideration

As a result of the Business Combination, certain of Holdings’ equity holders have the right to receive an aggregate of up to 7,500,000 additional (i) shares of the Company’s class A common stock or (ii) Holdings’ Units (and a corresponding number of shares of the Company's class B common stock), as applicable, in earnout consideration based on the achievement of certain stock price thresholds (collectively, the “Earnouts”). There were a total of 657,160 shares subject to ASC 718, or 328,580 shares for each Phase since they were issued to the Company’s employees.

Upon the transaction date, a valuation was performed which took into consideration all the key terms and conditions of the award, including the fact that, under Topic 718, there is no requisite service period due to the fact that there is no service condition prospectively, and as of the grant date there is no service inception date preceding the grant date on which to base historical valuation or expense amortization. As such, the award is considered to be immediately vested from a service perspective, and is solely contingent on meeting the hurdles required for the award to be settled. Since there is no future substantive risk of forfeiture, all expenses associated with the awards were accelerated and recognized on December 27, 2021. There were a total of 657,160 shares subject to Topic 718 or 328,580 shares per Phase with an intrinsic value of $5,395 as of December 31, 2021. The Company recognized a total expense of $4,610 related to Earnouts in its consolidated statements of operations for the year ended December 31, 2021.

The valuation of the Earnouts was determined using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. The following assumptions were used to determine the grant date fair value for these Earnouts:


	Year Ended
	12/27/2021
Valuation date share price	$	9.95
Risk-free interest rate		0.98% - 1.12	%
Expected volatility		57.92% - 58.88	%
Expected dividends		0	%
Expected forfeiture rate		0	%
Expected term		3 - 4 years

Holdings' Options Valuation

In the year ended 2021, Holdings granted no stock options, restricted stock units, or profits interests, and no awards were forfeited. Prior to the completion of the Business Combination the fair value of Holdings options was determined by using the Black-Scholes option valuation model based upon information available at the time of grant. The calculated value of each option award was estimated at the date of grant using the Black-Scholes option valuation model. The expected term assumption reflected the period for which the Holdings believed the option will remain outstanding. This assumption was based upon the historical and expected behavior of the Holdings’ employees. Holdings had elected to use the calculated value method to account for the options it had issued. A nonpublic entity that is unable to estimate the expected volatility of the price of its underlying share may measure awards based on a “calculated value,” which substitutes the volatility of an appropriate index for the volatility of the entity’s own share price. To determine volatility, the Holdings had used the historical closing values of comparable publicly held entities to estimate volatility. The risk-free rate reflected the U.S. Treasury yield curve for a similar expected life instrument in effect at the time of the grant.

The assumptions utilized to calculate the value of the options granted for the year ended December 31, 2020 and 2019, respectively, were as below:


	2020		2019
Expected term	1 year		1.25 years
Volatility	44.00	%	30.00	%
Risk-free rate	1.07	%	2.36	%
Expected dividends	0	%	0	%
Expected forfeiture rate	0	%	0	%

Stock Options activity

Upon consummation of the Business Combination, Holdings options were assumed by the Company and recapitalized. Because of the nature of the recapitalization in a Business Combination, the Company recalculated new fair values for the affected stock options and profits interest to preserve the total grant date fair value originally issued. All stock option activity was retroactively restated to reflect the exchanged options.

The following table sets forth the options activity under the Holdings’ equity plan which was assumed by the Company and recapitalized for the year ended December 31, 2021:


		Weighted		Weighted Average	Aggregate
		Average		Remaining	Intrinsic
	Number	Exercise Price		Contractual	Value
	of Shares	Per Shares		Term (years)	(in thousands)
Outstanding at January 1, 2021	6,823,006	$	1.15	5.4	$	72,489
Granted	—		—	—		—
Exercised	1,413,235	$	0.71			13,133
Outstanding at December 31, 2021	5,409,771	$	1.27	4.1		37,542
Vested and expected to vest at December 31, 2021	5,409,771	$	1.27	4.1		37,542
Exercisable at December 31, 2021	4,947,921	$	0.91	3.9		36,104

The weighted average calculated grant date fair value per time-vested option granted during the years ended December 31, 2020 and 2019 were $6.36 and $4.31, respectively. The Company recognized approximately $1,310, $1,143, and $1,211 of compensation expense for the options in Selling, general and administrative expenses in the accompanying consolidated statements of operations in 2021, 2020, and 2019, respectively.

The number of options exercisable and vested as of December 31, 2021, 2020, and 2019 were 4,947,921, 5,894,922 and 5,128,908 respectively. The weighted average exercise price of options exercisable and vested is $1.26, $406.63, and $265.62 for years ended December 31, 2021, 2020, and 2019, respectively. The weighted average remaining contractual years term (years) per options exercisable as of December 31, 2021, 2020, and 2019 is 3.9, 4.9, and 5.7, respectively. Unrecognized compensation expense for the options of approximately $1,425 is expected to be recognized during the next three years.

Profits Interest

On May 11, 2017, the members of the Holdings executed a Limited Liability Company Agreement for an entity formed in 2016 titled CompoSecure Employee LLC. The purpose of the entity was to hold Operating Incentive units. In May 2017, the Company granted 1,320,765 incentive units with a profits interest hurdle of $232,232. No interests were granted during the period ended December 31, 2021. Upon consummation of the Business Combination on December 27, 2021, all of the incentive units, whether vested or unvested, outstanding immediately prior to the merger that were not settled as part of the transaction, were assumed by the Company and converted into class B common stock. The total class B common stock outstanding were 1,236,027 as of December 31, 2021 with an aggregate intrinsic value of $10,843.

The Company recognized approximately $193, $433, and $470 of compensation expense for the incentive units in Selling, general and administrative expenses in the accompanying consolidated statements of operations in 2021, 2020, and 2019, respectively. Unrecognized compensation expense for the incentive units of approximately $39 is expected to be recognized during the next one year.

RETIREMENT PLAN

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

RETIREMENT PLAN

10.

RETIREMENT PLAN

Defined Contribution Plan

The Company has a 401(k) profit sharing plan for all full-time employees who have attained the age of 21 and completed 90 days of service. The Company matches 100% of the first 1% and then 50% of the next 5% of employee contributions. Retirement plan expense for the years ended December 31, 2021, 2020, and 2019 was approximately $1,102, $1,030, and $943 respectively.

Deferred Compensation Plan

The Company has a self-administered deferred compensation plan that accrues a liability for the benefit of certain employees equal to 0.25% year-over-year change in Earnings Before Interest Depreciation “EBITDA” that began in 2014. The Company made an initial contribution of $150 with an additional contribution of $0, $0, and $501 for years ended December 31, 2021, 2020, and 2019, respectively. The total liability was $242 and $1,534 at December 31, 2021 and 2020, respectively, and is recorded in other liabilities on the balance sheet. The Plan vests over a seven year period according to the following vesting schedule: Year 1 — 0.0%, Year 2 — 5.0%, Year 3 — 15.0%, Year 4 — 20.0%, Year 5 — 30.0%, Year 6 — 50.0%, Year 7 — 100%. Since plan inception $1,223 has vested of the recorded liability.

The entire disclosure for retirement benefits.

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS

In accordance with ASC 820-10, the Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company.

The Company’s financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates:


	Level 1		Level 2		Level 3		Total
December 31, 2021
Liabilities Carried at Fair Value:
Public warrants	$	—	$	17,714	$	—	$	17,714
Private warrants		—		—		17,557		17,557
Earnout consideration		—		—		38,427		38,427
Derivative liability - redemption with make-whole provision		—		—		552		552

Warrant Liability

As a result of the Business Combination, the Company assumed warrant liability related to previously issued warrants in connection with Roman’s initial public offering. The warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our balance sheet. The warrant liabilities were remeasured at fair value upon business combination and subsequently at December 31, 2021, with changes in fair value presented within revaluation of warrant liabilities in the statement of operations.

Initial Measurement

The Company established the initial fair value of the warrants upon the business combination date using the Black Scholes Option Pricing Model. The following table provides a reconciliation of the ending balances for the warrant liabilities remeasured at fair value:


	Warrant Liabilities
Assumed warrant liability upon business combination at December 27, 2021		38,756
Change in estimated fair value		(3,485)
Estimated fair value at December 31, 2021		35,271

The Public Warrants were valued using the quoted market price as the fair value at the end of each balance sheet date. The Private Placement Warrants were valued using the Black Scholes Option Pricing Model.

The following assumptions were used to determine the fair value of the private warrants as of December 31, 2021:


	12/31/2021
Exercise Price	$	11.50
Risk-free interest rate		1.26	%
Expected volatility		33	%
Expected dividends		0	%
Expected term (years)		4.9 years
Common Stock market value	$	8.21

The fair value of warrants has been classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently readily observable in the market. If different assumptions were used for the various inputs to the valuation approach, the estimated fair value could be significantly higher or lower than the fair value determined.

Earnout Consideration

Holdings' equity holders have the right to receive an aggregate of up to 7,500,000 additional (i) shares of the Company’s class A common stock or (ii) Holdings Units (and a corresponding number of shares of the Company’s class B common stock), as applicable, in Earnout consideration based on the achievement of certain stock price thresholds. See also Note 9. Earnout Considerations held by Holdings’ holders (not including the holders under ASC 718) were determined to be derivative instruments in accordance with ASC 815 and were accounted as derivative liabilities, initially valued at fair value in accordance with ASC 815-40-30-1. Subsequently, the liability for Earnouts will be remeasured at each reporting period at fair value, with changes in fair value recorded in earnings in accordance with ASC 815-40-35-4. The Company established the initial fair value for the earnouts at the closing date on December 27, 2021 using a Monte Carlo simulation model. Subsequently, the Company remeasured the fair value of the earnouts at December 31, 2021. The following table provides a reconciliation of the ending balances for the earnout consideration liabilities remeasured at fair value:


	Earnout Consideration
	Liability
Fair value recognized upon business combination		(48,002)
Change in estimated fair value		9,575
Estimated fair value at December 31, 2021	$	(38,427)

The following assumptions were used to determine the fair value of the Earnout considerations as of December 31, 2021:


	12/31/2021
Valuation date share price	$	8.21
Risk-free interest rate		0.97% - 1.12	%
Expected volatility		67.5	%
Expected dividends		0	%
Expected term (years)		3 - 4 years

The fair value of Earnouts has been classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently readily observable in the market. If different assumptions were used for the various inputs to the valuation approach, the estimated fair value could be significantly higher or lower than the fair value determined.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

GEOGRAPHIC INFORMATION AND CONCENTRATIONS

GEOGRAPHIC INFORMATION AND CONCENTRATIONS

12 Months Ended

Dec. 31, 2021

Risks and Uncertainties [Abstract]

12.GEOGRAPHIC INFORMATION AND CONCENTRATIONS

The Company headquarters and substantially all of its operations, including its long-lived assets, are located in the United States. Geographical revenue information based on the location of the customer follows:


	Year Ended December 31,
	2021		2020		2019
Net sales by country
Domestic	$	218,441	$	213,982	$	191,502
International		49,507		46,604		51,788
Total	$	267,948	$	260,586	$	243,290

The Company’s principal direct customers as of December 31, 2021 consist primarily of leading international and domestic banks and other credit card issuers primarily within the U.S., Europe, Asia, Latin America, Canada, and the Middle East. The Company periodically assesses the financial strength of these customers and establishes allowances for anticipated losses, if necessary.

Two customers individually accounted for more than 10% of the Company’s revenue or 71.9% of total revenue for the year ended December 31, 2021. Two customers individually accounted for more than 10% of the Company’s revenue or 72.1% of total revenue for the year ended December 31, 2020. Three customers individually accounted for more than 10% of the Company’s revenue or 74.9% of total revenue for the year ended December 31, 2019. Two customers individually accounted for more than 10% of the Company’s accounts receivable or approximately 66% as of December 31, 2021 and two customers individually accounted for 10% of total accounts receivable or 61% as of December 31, 2020, respectively.

The Company primarily relied on two vendors that individually accounted for more than 10% of purchases of supplies for the year ended December 31, 2021. The Company primarily relied on four vendors that individually accounted for more than 9% of purchases of supplies for the year ended December 31, 2020.

INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

13.

INCOME TAXES

The Company recorded $857 for the tax benefit for the period from December 27, 2021 to December 31, 2021. No provisions/benefits were made for federal or state income taxes for the years ended December 31, 2020, and 2019 as prior to the Business Combination, the Company was not subject to income taxes due to the then equity structure of the Company and was subject to pass through income taxes. Federal, state and local income tax returns for years prior to 2019 are no longer subject to examination by tax authorities.

Income before the benefit for income taxes as shown in the accompanying consolidated statements of operations is as follows:


	Years Ended December 31,
	2021		2020		2019
Income before income taxes	$	82,557	$	77,815	$	81,473
Income before income taxes attributable to period subsequent to business combination for the year ended December 31, 2021	$	12,206		—		—

The Company calculated income taxes on prorated income only for the days remaining subsequent to the Business Combination for the year ended December 31, 2021. The components of the benefit for income taxes for the year ended December 31, 2021 consisted of the following:


	Year Ended December 31,
	2021
Current:
Federal	$	—
State		—
		—
Deferred:
Federal		(856)
State		(1)
		(857)
Total benefit from income taxes	$	(857)

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the year ended December 31, 2021 was as follows:


	Year Ended December 31,
	2021
U.S. federal statutory tax rate	21.00	%
State taxes	0.03	%
Valuation allowances	—
NCI adjustment	(18.53)	%
Permanent differences	(3.35)	%
Effective income tax rate	(0.85)	%

The Company’s overall effective tax rate is affected primarily by the non-controlling interest adjustment as the income attributable to the non-controlling interest is pass-through income.

Provisions have been made for deferred taxes based on the differences between the basis of the assets and liabilities for financial statement purposes and the basis of the assets and liabilities for tax purposes using currently enacted tax rates and regulations that will be in effect when the differences are expected to be recovered or settled.

The components of the deferred tax assets were as follows:


	December 31,
	2021
Deferred Tax Assets:
Investment in Holdings	$	29,102
Imputed Interest		623
Earnout consideration liability		970
Federal R&D Credit		—
Net operating loss carryforward		819
Total deferred tax assets	$	31,514
valuation allowance		(5,864)
Total deferred tax assets net of valuation allowance	$	25,650

The deferred taxes primarily result from the Business Combination where the Company recorded a carryover basis on all assets for financial accounting purposes and a fair value step-up on a portion of the assets for income tax purposes. The Company’s deferred

tax asset was reviewed for expected utilization using a “more likely than not” approach by assessing the available positive and negative evidence surrounding its recoverability. Accordingly, a valuation allowance has been recorded against the Company’s deferred tax asset, as it was determined that it was “more likely than not” that the Company’s deferred tax assets would not be fully realized. As of December 31, 2021, the Company determined that considering all of these factors, a $5,864 valuation allowance would be established. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately at such time when it is determined that the “more likely than not” criteria is satisfied.

The Company has net operating losses (“NOL”) of approximately $3,892 for federal purposes which do not expire; however, they are limited to 80% of taxable income. State NOL’s of approximately $8 which expire beginning in 2042. Realization of the NOL carryforwards and other deferred tax temporary differences is contingent on future taxable earnings.

There were no significant uncertain tax positions taken, or expected to be taken, in a tax return that would be determined to be an unrecognized tax benefit taken or expected to be taken in a tax return that should have been recorded on the Company’s financial statements for the year ended December 31, 2021. Additionally, there were no interest or penalties outstanding as of the fiscal year ended December 31, 2021.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Commitments and Contingencies Disclosure [Abstract]

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

EARNINGS PER SHARE

14. EARNINGS PER SHARE

Basic net income per share has been computed by dividing net income attributable to class A common shareholders for the period subsequent to the business combination by the weighted average number of shares of common stock outstanding for the same period. Diluted earnings per share of Class A common stock were computed by dividing net income available to CompoSecure, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. No earnings per share are presented for periods preceding the business combination as only the Class B common stock would have been outstanding in historical periods pursuant to the reverse recapitalization and the Class B common stock do not participate in the Company’s income or loss and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

The following table sets forth the computation of net income used to compute basic net income per share of Class A common stock for the year ended December 31, 2021. The basic and diluted earnings per share period for the year ended December 31, 2021, represents only the period from December 27, 2021 to December 31, 2021, which represents the period wherein we had outstanding Class A common stock.


	Year Ended December 31,
	2021
Basic and diluted:
Net income	$	83,414
Less: Net income attributable to Holdings L.L.C. prior to business combination		(70,352)
Less: Net income attributable to non-controlling interest subsequent to business combination		450
Net income attributable to CompoSecure, Inc for period subsequent to business combination	$	13,512
Plus: adjustment due to net effect of dilutive class B units, stock options and exchangeable notes to net income		(331)
Net income attributable to CompoSecure, Inc for period subsequent to business combination after adjustment	$	13,181
Weighted average common shares outstanding used in computing net income per share—basic		14,930
Weighted average common shares outstanding used in computing net income per share—diluted		94,926
Net income per share – basic	$	0.91
Net income per share – diluted	$	0.14

The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities. The Company’s stock options, warrants, earnouts and exchangeable notes could have the most significant

impact on diluted shares. Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an antidilutive effect on per share amounts. The Company applied if-converted method for the convertible debt to calculate diluted earnings per share in accordance of ASU 2020-06.

The following amounts were not included in the calculation of net income per diluted share because their effects were anti-dilutive:


		Year Ended December 31,
		2021
Denominator:
Warrants		22,415
Earnout Shares		7,500

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

15.

COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain office space and manufacturing space under arrangements currently classified as leases under ASC 842. See Note 2 for future minimum commitments under all non-cancelable operating leases.

Litigation

The Company may be, from time to time, party to various disputes and claims arising from normal business activities. The Company accrues for amounts related to legal matters if it is probable that a liability has been incurred and the amount is reasonably estimable. while the outcome of existing disputes and claims is uncertain, the Company does not expect that the resolution of existing disputes and claims would have a material adverse effect on its consolidated financial position or liquidity or the Company’s consolidated results of operations. Litigation expenses are expensed as incurred. During first quarter of 2021, the Company received from a third party a notice of dispute with respect to whether commissions are due and owing on product sales to certain of the Company’s customers which, if successful, could require payments ranging from $4,000 to $11,000, plus costs and expenses, together with additional commission payments on future sales, if any, to such customers. The Company does not believe these commissions are owed, and intends to vigorously oppose this claim, which may include legal proceedings. The Company has not accrued any amount as a component of accrued expense related to the notice of dispute as of December 31, 2021.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

RELATED PARTY TRANSACTIONS

16.

RELATED PARTY TRANSACTIONS

In November 2015, the Company entered into a sales representation agreement with a third party, partially owned by an individual who is a Class B member of Holdings and who was then a member of Holdings’ Board of Managers. In 2016, the Company commenced litigation against such third party seeking a judicial determination that the sales representation agreement was void and unenforceable, among other claims. In February 2018, the trial court ruled against Holdings in the litigation, concluding that the sales representation agreement was valid and enforceable. Holdings appealed the ruling, however, the ruling was upheld. As a result of the ruling, Holdings was instructed to pay the commissions in accordance with the terms of the sales representation agreement, interest related to the commissions, and legal fees on behalf of the third party. Expenses relating to this agreement for the years ended December 31, 2021, 2020, and 2019 amounted to $9,508, $6,724, and $9,232, respectively and were recorded as a component of selling, general and administrative expenses. In October 2019, Holdings terminated the sales representation agreement. Customers in place prior to the termination of the agreement are subject to the arrangement and are eligible for future commissions, which are payable and are being accrued and paid in accordance with the terms of the sales representation agreement. Amounts accrued as a component of accrued expenses as of December 31, 2021, and December 31, 2020 related to this agreement amounted to $3,402 and $2,786.

In March 2021, the Company received from such third party a notice of dispute with respect to whether commissions are due and owing on product sales to certain of the Company’s customers which, if successful, could require payments ranging from $4,000 to $11,000, plus costs and expenses, together with additional commission payments on future sales, if any, to such customers. The Company does not believe these commissions are owed, and intends to vigorously oppose this claim, which may include legal proceedings. The Company has not accrued any amount as a component of accrued expense related to the notice of dispute as of December 31, 2021.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Consolidation

The accompanying consolidated financial statements include the results of operations of the Company and its majority owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to conform to the current year presentation.

Accounts Receivable

Accounts Receivable

Inventories

Inventories

Property and Equipment

Property and Equipment

Revenue Recognition and Shipping and Handling Costs

Advertising

Advertising

Income Taxes

Income Taxes

Equity-Based Compensation

Equity-Based Compensation

Earnout Consideration

Earnout Consideration

Warrant Liability

Warrant Liability

Tax Receivable Liability

Tax Receivable Liability

Selling, General and Administrative

Selling, General and Administrative

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Market and Credit Risk

Market and Credit Risk

Fair Value Measurements

Fair Value Measurements

The standard describes three levels of inputs that may be used to measure fair value::

●

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

●

Level 2: Observable inputs other than unadjusted quoted prices in active markets for identical assets or liabilities such as:

●

Quoted prices for similar assets or liabilities in active markets

●

Quoted prices for identical or similar assets or liabilities in inactive markets

●

Inputs other than quoted prices that are observable for the asset or liability

●

Inputs that are derived principally from or corroborated by observable market data by correlation or other mean

●

Level 3: Unobservable inputs in which there is little or no market data available, which are significant to the fair value measurement and require the Company to develop its own assumptions.

Segments

Segments

Recent Accounting Pronouncements

Recent Accounting Pronouncements — Adopted

Recent Accounting Pronouncements – Not Yet Adopted

Operating Leases

Operating Leases

The weighted-average remaining lease term for our operating leases was 4.8 years at December 31, 2021. The weighted-average discount rate was 3.73% at December 31, 2021.

ROU assets and lease liabilities related to our operating leases are as follows:


	Balance Sheet Classification	December 31, 2021
Right-of-use assets	Right of use assets	$	5,246
Current lease liabilities	Current portion of lease liabilities		1,119
Non-current lease liabilities	Non-current portion of lease liabilities		4,709

common-area maintenance costs related to the lease agreements and are recognized as incurred. The components of lease costs were as follows:


	Twelve-month period ended
	December 31, 2021
Operating lease cost	$	1,305
Variable lease cost		444
Total lease cost	$	1,749

Future minimum commitments under all non-cancelable operating leases are as follows:


2022	$	1,294
2023		1,298
2024		1,263
2025		1,302
2026		1,096
Later years		97
Total lease payments		6,350
Less: Imputed interest		522
Present value of lease liabilities	$	5,828

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:


	Twelve-month period ended
	December 31, 2021
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	1,272
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

ROU assets and lease liabilities

ROU assets and lease liabilities related to our operating leases are as follows:


	Balance Sheet Classification	December 31, 2021
Right-of-use assets	Right of use assets	$	5,246
Current lease liabilities	Current portion of lease liabilities		1,119
Non-current lease liabilities	Non-current portion of lease liabilities		4,709

Components of lease costs, and supplemental cash flow information and non-cash activity


	Twelve-month period ended
	December 31, 2021
Operating lease cost	$	1,305
Variable lease cost		444
Total lease cost	$	1,749

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:


	Twelve-month period ended
	December 31, 2021
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	1,272
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	—

Future minimum commitments

Future minimum commitments under all non-cancelable operating leases are as follows:


2022	$	1,294
2023		1,298
2024		1,263
2025		1,302
2026		1,096
Later years		97
Total lease payments		6,350
Less: Imputed interest		522
Present value of lease liabilities	$	5,828

BUSINESS COMBINATION (Tables)

12 Months Ended

Dec. 31, 2021

Reverse Recapitalization [Abstract]

Recapitalization

The following summarizes the net contributions received from the Business Combination and PIPE financing:


	Recapitalization
Cash - Roman DBDR’s trust and cash (net of redemptions)	$	47,359
Cash - PIPE (Common)		45,000
Cash - PIPE (Exchangeable Notes)		130,000
Less: transaction costs and advisory fees paid		(34,132)
Net Business Combination and PIPE financing	$	188,226

The following table describes the number of shares of common stock issued immediately following the consummation of the Business Combination:


		Number of Shares
Common stock, outstanding prior to Business Combination		23,156,000
Less: redemption of Roman DBDR shares		(18,515,018)
Common stock of Roman DBDR		4,640,982
Roman DBDR Founder Shares		5,789,000
Shares issued in PIPE		4,500,000
Business Combination and PIPE financing shares - Class A common stock		14,929,982
Class B common stock held by Holdings		61,136,800
Total shares of common stock - Class A and Class B immediately after Business Combination		76,066,782

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Major classes of inventories


	December 31,
	2021		2020
Raw materials	$	27,474	$	27,157
Work in process		582		1,055
Finished goods		363		3,998
Inventory reserve		(2,613)		(2,013)
	$	25,806	$	30,197

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and equipment


		December 31,
	Useful Life	2021		2020
Machinery and equipment	5 – 10 years	$	59,437	$	57,360
Furniture and fixtures	3 – 5 years		955		955
Computer equipment	3 – 5 years		925		908
Leasehold improvements	Shorter of lease term or estimated useful life		11,358		10,875
Vehicles	5 years		264		264
Software	1 – 3 years		2,889		1,186
Construction in progress			985		519
Total			76,813		72,067
Less: Accumulated depreciation and amortization			(54,636)		(44,208)
Property and equipment, net		$	22,177	$	27,859

DEBT (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Balances payable under all borrowing facilities


	December 31,		December 31,
	2021		2020
Total debt	$	380,000	$	240,000
Less: current portion of term loan (scheduled payments)		12,500		24,000
Less: debt discount and debt issuance costs, net		7,471		4,113
Total long-term debt	$	360,029	$	211,887
Derivative liability - redemption with a make-whole provision	$	552	$	—

Maturity of borrowings


Years
2022	$	12,500
2023		18,750
2024		18,750
2025		200,000
2026		130,000
Total debt	$	380,000

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

Assumptions used to determine fair value


	Year Ended
	12/27/2021
Valuation date share price	$	9.95
Risk-free interest rate		0.98% - 1.12	%
Expected volatility		57.92% - 58.88	%
Expected dividends		0	%
Expected forfeiture rate		0	%
Expected term		3 - 4 years

The following assumptions were used to determine the fair value of the private warrants as of December 31, 2021:


	12/31/2021
Exercise Price	$	11.50
Risk-free interest rate		1.26	%
Expected volatility		33	%
Expected dividends		0	%
Expected term (years)		4.9 years
Common Stock market value	$	8.21

The following assumptions were used to determine the fair value of the Earnout considerations as of December 31, 2021:


	12/31/2021
Valuation date share price	$	8.21
Risk-free interest rate		0.97% - 1.12	%
Expected volatility		67.5	%
Expected dividends		0	%
Expected term (years)		3 - 4 years

Assumptions utilized to calculate value of options granted

The assumptions utilized to calculate the value of the options granted for the year ended December 31, 2020 and 2019, respectively, were as below:


	2020		2019
Expected term	1 year		1.25 years
Volatility	44.00	%	30.00	%
Risk-free rate	1.07	%	2.36	%
Expected dividends	0	%	0	%
Expected forfeiture rate	0	%	0	%

Options activity

The following table sets forth the options activity under the Holdings’ equity plan which was assumed by the Company and recapitalized for the year ended December 31, 2021:


		Weighted		Weighted Average	Aggregate
		Average		Remaining	Intrinsic
	Number	Exercise Price		Contractual	Value
	of Shares	Per Shares		Term (years)	(in thousands)
Outstanding at January 1, 2021	6,823,006	$	1.15	5.4	$	72,489
Granted	—		—	—		—
Exercised	1,413,235	$	0.71			13,133
Outstanding at December 31, 2021	5,409,771	$	1.27	4.1		37,542
Vested and expected to vest at December 31, 2021	5,409,771	$	1.27	4.1		37,542
Exercisable at December 31, 2021	4,947,921	$	0.91	3.9		36,104

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Financial assets measured at fair value on a recurring basis


	Level 1		Level 2		Level 3		Total
December 31, 2021
Liabilities Carried at Fair Value:
Public warrants	$	—	$	17,714	$	—	$	17,714
Private warrants		—		—		17,557		17,557
Earnout consideration		—		—		38,427		38,427
Derivative liability - redemption with make-whole provision		—		—		552		552

Financial liabilities measured at fair value on a recurring basis

The Company’s financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates:


	Level 1		Level 2		Level 3		Total
December 31, 2021
Liabilities Carried at Fair Value:
Public warrants	$	—	$	17,714	$	—	$	17,714
Private warrants		—		—		17,557		17,557
Earnout consideration		—		—		38,427		38,427
Derivative liability - redemption with make-whole provision		—		—		552		552

Reconciliation of warrant liabilities measured at fair value


	Warrant Liabilities
Assumed warrant liability upon business combination at December 27, 2021		38,756
Change in estimated fair value		(3,485)
Estimated fair value at December 31, 2021		35,271

Assumptions used to determine fair value


	Year Ended
	12/27/2021
Valuation date share price	$	9.95
Risk-free interest rate		0.98% - 1.12	%
Expected volatility		57.92% - 58.88	%
Expected dividends		0	%
Expected forfeiture rate		0	%
Expected term		3 - 4 years

The following assumptions were used to determine the fair value of the private warrants as of December 31, 2021:


	12/31/2021
Exercise Price	$	11.50
Risk-free interest rate		1.26	%
Expected volatility		33	%
Expected dividends		0	%
Expected term (years)		4.9 years
Common Stock market value	$	8.21

The following assumptions were used to determine the fair value of the Earnout considerations as of December 31, 2021:


	12/31/2021
Valuation date share price	$	8.21
Risk-free interest rate		0.97% - 1.12	%
Expected volatility		67.5	%
Expected dividends		0	%
Expected term (years)		3 - 4 years

Earnout consideration


	Earnout Consideration
	Liability
Fair value recognized upon business combination		(48,002)
Change in estimated fair value		9,575
Estimated fair value at December 31, 2021	$	(38,427)

GEOGRAPHIC INFORMATION AND CONCENTRATIONS (Tables)

12 Months Ended

Dec. 31, 2021

Risks and Uncertainties [Abstract]

Geographical revenue information


	Year Ended December 31,
	2021		2020		2019
Net sales by country
Domestic	$	218,441	$	213,982	$	191,502
International		49,507		46,604		51,788
Total	$	267,948	$	260,586	$	243,290

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income before benefit for income taxes


	Years Ended December 31,
	2021		2020		2019
Income before income taxes	$	82,557	$	77,815	$	81,473
Income before income taxes attributable to period subsequent to business combination for the year ended December 31, 2021	$	12,206		—		—

Components of benefit for income taxes


	Year Ended December 31,
	2021
Current:
Federal	$	—
State		—
		—
Deferred:
Federal		(856)
State		(1)
		(857)
Total benefit from income taxes	$	(857)

Reconciliation of taxes at the federal statutory rate


	Year Ended December 31,
	2021
U.S. federal statutory tax rate	21.00	%
State taxes	0.03	%
Valuation allowances	—
NCI adjustment	(18.53)	%
Permanent differences	(3.35)	%
Effective income tax rate	(0.85)	%

Components of deferred tax assets


	December 31,
	2021
Deferred Tax Assets:
Investment in Holdings	$	29,102
Imputed Interest		623
Earnout consideration liability		970
Federal R&D Credit		—
Net operating loss carryforward		819
Total deferred tax assets	$	31,514
valuation allowance		(5,864)
Total deferred tax assets net of valuation allowance	$	25,650

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share


	Year Ended December 31,
	2021
Basic and diluted:
Net income	$	83,414
Less: Net income attributable to Holdings L.L.C. prior to business combination		(70,352)
Less: Net income attributable to non-controlling interest subsequent to business combination		450
Net income attributable to CompoSecure, Inc for period subsequent to business combination	$	13,512
Plus: adjustment due to net effect of dilutive class B units, stock options and exchangeable notes to net income		(331)
Net income attributable to CompoSecure, Inc for period subsequent to business combination after adjustment	$	13,181
Weighted average common shares outstanding used in computing net income per share—basic		14,930
Weighted average common shares outstanding used in computing net income per share—diluted		94,926
Net income per share – basic	$	0.91
Net income per share – diluted	$	0.14

Antidilutive shares excluded from calculation


		Year Ended December 31,
		2021
Denominator:
Warrants		22,415
Earnout Shares		7,500

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details)	Dec. 31, 2021 customer	Dec. 27, 2021 $ / shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of direct customers	20
Number of indirect customers	80
Common stock, par value (usd per share) \| $ / shares		$ 0.0001

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Accounts receivable allowance for doubtful accounts	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Minimum
Property, Plant and Equipment [Line Items]
Useful life	1 year
Maximum
Property, Plant and Equipment [Line Items]
Useful life	10 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue and Shipping and Handling Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Revenue, payment terms, minimum	15 days
Revenue, payment terms, maximum	60 days
Revenue, payment due	90 days
Contract assets	$ 0	$ 0
Contract liabilities	0	0
Shipping and handling costs	$ 2,308	$ 1,596	$ 1,752

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising, Tax Receivable Liability, and Selling, General and Administrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Selling expenses	$ 17,434	$ 181	$ 313
Income tax benefit	$ 857	0	0
Tax Receivable Agreement, percentage	90.00%
Tax receivable agreement liability	$ 24,500	0
Salaries and commissions	16,103	12,650	14,824
Transaction costs	2,784	264	1,065
Professional fees	$ 8,350	$ 6,536	$ 4,546

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnout Consideration (Details)	Dec. 27, 2021 shares
Accounting Policies [Abstract]
Earnout shares (in shares)	7,500,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segments (Details)	12 Months Ended
	Dec. 31, 2021 segment
Accounting Policies [Abstract]
Number of operating segments	1
Number of reportable segments	1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Operating Leases Narrative (Details) $ in Thousands		12 Months Ended
	Aug. 01, 2014	Dec. 31, 2021 USD ($)	Jan. 01, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jun. 16, 2016	Apr. 01, 2012
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use asset, net		$ 5,246		$ 0
Lease liabilities		$ 5,828
Effective interest rate			3.41%
Renewal term		3 years
Weighted-average remaining lease term		4 years 9 months 18 days
Weighted-average discount rate		3.73%
Office space and manufacturing space location 1
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Renewal term		5 years
Lease term						10 years
Base rent		$ 324
Lease escalation factor		3.00%
Office space and manufacturing space location 2
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Renewal term	2 years
Lease term	4 years
Base rent		$ 106
Lease escalation factor		3.00%
Number of renewal options	2
Office space and manufacturing space location 3
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease term					10 years
Base rent		$ 825
Lease escalation factor		3.00%
2016 Credit Facility \| LIBOR
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Basis spread on variable interest rate		3.00%
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining lease terms		1 year
Renewal term		1 year
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining lease terms		5 years
Renewal term		5 years
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use asset, net			$ 6,298
Lease liabilities			$ 6,875

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Operating Leases Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Right-of-use assets	$ 5,246	$ 0
Current lease liabilities	1,119	0
Non-current lease liabilities	$ 4,709	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Operating Leases Lease Cost (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
Operating lease cost	$ 1,305
Variable lease cost	444
Total lease cost	$ 1,749

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Operating Leases Maturity (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
2022	$ 1,294
2023	1,298
2024	1,263
2025	1,302
2026	1,096
Later years	97
Total lease payments	6,350
Less: Imputed interest	522
Present value of lease liabilities	$ 5,828

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Operating Leases Cash Flow (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 1,272
Right-of-use assets obtained in exchange for lease obligations	$ 0

BUSINESS COMBINATION - Narrative (Details) $ / shares in Units, $ in Thousands	Dec. 27, 2021 USD ($) Vote $ / shares shares	Dec. 31, 2021
Reverse Recapitalization [Line Items]
Earnout shares (in shares)	7,500,000
Tax Receivable Agreement, percentage		90.00%
Stock issued (in shares)	4,500,000
Stock issued, price per share (in usd per share) \| $ / shares	$ 10.00
Stock issued, aggregate purchase price \| $	$ 45,000
Class B Common Stock
Reverse Recapitalization [Line Items]
Number of votes per share \| Vote	1
Recapitalization exchange ratio	1

BUSINESS COMBINATION - Recapitalization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reverse Recapitalization [Line Items]
Cash - Roman DBDR's trust and cash (net of redemptions)	$ 47,359
Cash - PIPE	60,826	$ 0	$ 0
Less: transaction costs and advisory fees paid	(34,132)
Net Business Combination and PIPE financing	188,226
Common Stock
Reverse Recapitalization [Line Items]
Cash - PIPE	45,000
Exchangeable Notes
Reverse Recapitalization [Line Items]
Cash - PIPE	$ 130,000

BUSINESS COMBINATION - Common Stock (Details) - shares	Dec. 27, 2021	Dec. 26, 2021
Reverse Recapitalization [Line Items]
Common stock, outstanding (shares)	76,066,782	23,156,000
Less: redemption of Roman DBDR shares (in shares)	(18,515,018)
Stock issued in private placement (shares)	4,500,000
Business Combination and PIPE Financing shares - Class A common stock (in shares)	14,929,982
Class B common stock held by Holdings (in shares)	61,136,800
Common Shareholders
Reverse Recapitalization [Line Items]
Stock issued (in shares)	4,640,982
Roman DBDR Founders
Reverse Recapitalization [Line Items]
Stock issued (in shares)	5,789,000

REVENUE RECOGNITION (Details)	12 Months Ended
REVENUE RECOGNITION (Details)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Concentration Risk [Line Items]
Revenue, payment terms, minimum	15 days
Revenue, payment terms, maximum	60 days
Revenue, payment due	90 days
Revenues \| Customer concentration risk \| Three top customers
Concentration Risk [Line Items]
Concentration risk percentage	79.10%	74.90%	82.50%

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 27,474	$ 27,157
Work in process	582	1,055
Finished goods	363	3,998
Inventory reserve	(2,613)	(2,013)
Inventory, Net, Total	$ 25,806	$ 30,197

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total	$ 76,813	$ 72,067
Less: Accumulated depreciation and amortization	(54,636)	(44,208)
Property and equipment, net	$ 22,177	27,859
Minimum
Property, Plant and Equipment [Line Items]
Useful life	1 year
Maximum
Property, Plant and Equipment [Line Items]
Useful life	10 years
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total	$ 59,437	57,360
Machinery and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	5 years
Machinery and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	10 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	$ 955	955
Furniture and fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	3 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	5 years
Computer equipment
Property, Plant and Equipment [Line Items]
Total	$ 925	908
Computer equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	3 years
Computer equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	5 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total	$ 11,358	10,875
Vehicles
Property, Plant and Equipment [Line Items]
Useful life	5 years
Total	$ 264	264
Construction in progress
Property, Plant and Equipment [Line Items]
Total	$ 985	519
Software \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	1 year
Software \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	3 years
Software Development [Member]
Property, Plant and Equipment [Line Items]
Total	$ 2,889	$ 1,186

PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 10,428	$ 9,916	$ 8,606

DEBT - Narrative (Details)		1 Months Ended	12 Months Ended
DEBT - Narrative (Details)	Apr. 19, 2021 USD ($) D $ / shares	Jul. 31, 2019 USD ($)	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($) $ / shares	Dec. 31, 2019 USD ($)	Jan. 31, 2022 USD ($)	Dec. 27, 2021 $ / shares	Nov. 30, 2020 USD ($)	Jul. 26, 2016 USD ($)
Debt Instrument [Line Items]
Common stock, par value (usd per share) \| $ / shares							$ 0.0001
Fair value of derivative liability			$ 552,000	$ 0
Interest expense			11,928,000	$ 6,142,000	$ 5,453,000
Derivative notional amount			100,000,000
Subsequent Event
Debt Instrument [Line Items]
Derivative notional amount						$ 125,000,000
2016 Credit Facility
Debt Instrument [Line Items]
Debt issuance costs		$ 1,065,000	1,800,000					$ 3,200,000
Maximum borrowing capacity			$ 310,000,000					300,000,000	$ 120,000,000
Repayment of debt		64,000,000
Repayment of interest		100,000
2016 Credit Facility \| Prime rate
Debt Instrument [Line Items]
Basis spread on variable interest rate			2.00%
2016 Credit Facility \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable interest rate			3.00%
Class A Common Stock
Debt Instrument [Line Items]
Common stock, par value (usd per share) \| $ / shares			$ 0.0001	$ 0.0001
Exchangeable Notes
Debt Instrument [Line Items]
Face amount	$ 130,000,000
Conversion price (usd per share) \| $ / shares	$ 11.50
Interest rate	7.00%
Term	5 years
Redemption, period from Closing Date	3 years
Redemption, stock price percentage threshold	130.00%
Redemption, threshold trading days \| D	20
Redemption, threshold consecutive trading days	30 days
Redemption, notice period	30 days
Redemption price percentage	100.00%
Redemption, VWAP, threshold trading days	5 days
Maximum conversion rate	99.9999
Anti-dilution, period after common stock issuance	45 days
Anti-dilution, threshold consecutive trading days	10 days
Fundamental change, repurchase price percentage	100.00%
Registration default, interest rate for first 90 days	0.25%
Registration default, interest rate after 90 days	0.50%
Event of default, threshold percentage of note holders that may declare notes payable immediately	25.00%
Event of default, percentage of notes payable immediately	100.00%
Event of default, interest rate for first 90 days	0.25%
Event of default, interest rate for days 91-180	0.50%
Fair value of derivative liability	$ 552,000
Interest expense			$ 200,000
Effective interest rate			7.40%
Debt issuance costs	$ 2,600,000
Line of credit and term loan
Debt Instrument [Line Items]
Effective interest rate			3.65%	4.36%
Line of credit \| 2016 Credit Facility \| Revolver
Debt Instrument [Line Items]
Maximum borrowing capacity		60,000,000							40,000,000
Annual commitment fee percentage			0.40%
Term loan \| 2016 Credit Facility
Debt Instrument [Line Items]
Face amount		$ 140,000,000	$ 250,000,000					$ 240,000,000	$ 80,000,000

DEBT - Balances Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Total debt	$ 380,000	$ 240,000
Less: current portion of term loan (scheduled payments)	12,500	24,000
Less: debt discount and debt issuance costs, net	7,471	4,113
Total long-term debt	360,029	211,887
Fair value of derivative liability	$ 552	$ 0

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

DEBT - Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
2022	$ 12,500
2023	18,750
2024	18,750
2025	200,000
2026	130,000
Total debt	$ 380,000	$ 240,000

EQUITY STRUCTURE (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 27, 2021	Dec. 26, 2021	Dec. 31, 2020
Class of Stock [Line Items]
Preferred stock, authorized (shares)	10,000,000			10,000,000
Common stock, outstanding (shares)		76,066,782	23,156,000
Preferred stock, issued (shares)	0
Preferred stock, outstanding (shares)	0
Share price (usd per share)	$ 8.21
Private warrants
Class of Stock [Line Items]
Warrants outstanding (shares)	10,837,400
Warrants, exercise price (usd per share)	$ 11.50
Warrants, commencement, period from Business Combination	30 days
Public warrants
Class of Stock [Line Items]
Warrants outstanding (shares)	11,578,000
Warrants, exercise price (usd per share)	$ 11.50
Warrants, commencement, period from Business Combination	30 days
Class A Common Stock
Class of Stock [Line Items]
Common stock, authorized (shares)	250,000,000			250,000,000
Common stock, issued (shares)	14,929,982			0
Common stock, outstanding (shares)	14,929,982			0
Share price (usd per share)		$ 9.95
Class B Common Stock
Class of Stock [Line Items]
Common stock, authorized (shares)	75,000,000			75,000,000
Common stock, issued (shares)	61,136,800			61,136,800
Common stock, outstanding (shares)	61,136,800			61,136,800
Common stock redemption value	$ 608,311

EQUITY COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Dec. 27, 2021 Vote individual shares	May 31, 2017 USD ($) shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Jan. 01, 2022 shares	Dec. 26, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	6,823,006		5,409,771	6,823,006			9,778
Options exercised (in shares)			1,413,235
Number of grantees affected by recapitalization \| individual	12
Earnout shares (in shares)	7,500,000
Shares subject to ASC 718 (in shares)			657,160
Shares subject to ASC 718, for each phase (in shares)			328,580
Earnout shares, intrinsic value \| $			$ 5,395
Grant date fair value (usd per share) \| $ / shares				$ 6.36	$ 4.31
Options exercisable and vested (in shares)			4,947,921	5,894,922	5,128,908
Weighted average exercise price (usd per share) \| $ / shares			$ 1.26	$ 406.63	$ 265.62
Weighted average remaining contractual term for options exercisable			3 years 10 months 24 days	4 years 10 months 24 days	5 years 8 months 12 days
Unrecognized compensation expense for options \| $			$ 1,425
Class B Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of votes per share \| Vote	1
Recapitalization exchange ratio	1
Awards outstanding (shares)			1,236,027
Intrinsic value \| $			$ 10,843
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized number of shares (shares)	1,650,785
Purchase price discount	15.00%
Remaining shares authorized for issuance (shares)			1,650,785
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period			10 years
Expense \| $			$ 1,310	$ 1,143	$ 1,211
Unrecognized compensation expense, period of recognition			3 years
Earnout Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense \| $			$ 4,610
Profits interest incentive units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense \| $			$ 193	$ 433	$ 470
Unrecognized compensation expense, period of recognition			1 year
Incentive units granted (in shares)		1,320,765	0
Profits interest hurdle \| $		$ 232,232
Unrecognized compensation cost \| $			$ 39
Subsequent Event \| ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in authorized number of shares, percentage						1.00%
Number of additional shares authorized, maximum (shares)						1,686,531
Maximum \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			5 years
Minimum \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized number of shares (shares)	8,987,609
Increase in authorized number of shares, percentage	4.00%

EQUITY COMPENSATION - Assumptions for Earnout Consideration (Details)	Dec. 31, 2021
Valuation date share price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	9.95
Risk-free interest rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	0.98
Risk-free interest rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	1.12
Expected volatility \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	57.92
Expected volatility \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	58.88
Expected dividends
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	0
Expected forfeiture rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	0
Expected term \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	3
Expected term \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Earnout consideration, measurement input	4

EQUITY COMPENSATION - Assumptions for Options Granted (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Expected term	1 year	1 year 3 months
Volatility	44.00%	30.00%
Risk-free rate	1.07%	2.36%
Expected dividends	0.00%	0.00%
Expected forfeiture rate	0.00%	0.00%

EQUITY COMPENSATION - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of Shares
Outstanding (in shares)	6,823,006
Granted (in shares)	0
Exercised (in shares)	1,413,235
Outstanding (in shares)	5,409,771	6,823,006
Vested and expected to vest (in shares)	5,409,771
Exercisable (in shares)	4,947,921	5,894,922	5,128,908
Weighted Average Exercise Price Per Shares
Outstanding (in usd per share)	$ 1.15
Granted (in usd per share)	0
Exercised (in usd per share)	0.71
Outstanding (in usd per share)	1.27	$ 1.15
Vested and expected to vest (in usd per share)	1.27
Exercisable (in usd per share)	$ 0.91
Weighted Average Remaining Contractual Term
Outstanding, weighted average remaining contractual term	4 years 1 month 6 days	5 years 4 months 24 days
Vested and expected to vest, weighted average remaining contractual term	4 years 1 month 6 days
Exercisable, weighted average remaining contractual term	3 years 10 months 24 days	4 years 10 months 24 days	5 years 8 months 12 days
Aggregate Intrinsic Value
Outstanding, aggregate intrinsic value	$ 37,542	$ 72,489
Vested and expected to vest, aggregate intrinsic value	37,542
Exercised	13,133
Exercisable, aggregate intrinsic value	$ 36,104

RETIREMENT PLAN - Defined Contribution Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Contribution Plan Disclosure [Line Items]
Required period of service to participate in plan	90 days
Retirement plan expense	$ 1,102	$ 1,030	$ 943
Matching scenario one
Defined Contribution Plan Disclosure [Line Items]
Employer match	100.00%
Employee contributions	1.00%
Matching scenario two
Defined Contribution Plan Disclosure [Line Items]
Employer match	50.00%
Employee contributions	5.00%

RETIREMENT PLAN - Deferred Compensation Plan (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Percent of EBITDA contributed		0.25%
Contributions	$ 150	$ 0	$ 0	$ 501
Liability		$ 242	$ 1,534
Vesting period		7 years
Vesting percentage, year one		0.00%
Vesting percentage, year two		5.00%
Vesting percentage, year three		15.00%
Vesting percentage, year four		20.00%
Vesting percentage, year five		30.00%
Vesting percentage, year six		50.00%
Vesting percentage, year seven		100.00%
Amount vested		$ 1,223

FAIR VALUE MEASUREMENTS - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 27, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 35,271	$ 38,756	$ 0
Earnout consideration	38,427	$ 48,002	$ 0
Derivative liability - redemption with make-whole provision	552
Public warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	17,714
Private warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	17,557
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Earnout consideration	0
Derivative liability - redemption with make-whole provision	0
Level 1 \| Public warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 1 \| Private warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Earnout consideration	0
Derivative liability - redemption with make-whole provision	0
Level 2 \| Public warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	17,714
Level 2 \| Private warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Earnout consideration	38,427
Derivative liability - redemption with make-whole provision	552
Level 3 \| Public warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0
Level 3 \| Private warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 17,557

FAIR VALUE MEASUREMENTS - Reconciliation of Warrant Liability (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Class of Warrant or Right [Roll Forward]
Estimated fair value, beginning	$ 38,756	$ 0
Change in estimated fair value	(3,485)	(3,485)	$ 0	$ 0
Estimated fair value, ending	$ 35,271	$ 35,271	$ 0

FAIR VALUE MEASUREMENTS - Fair Value Assumptions (Details) - Dec. 31, 2021	Y	Total	$ / shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Share price (usd per share)			$ 8.21
Exercise Price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input		11.50
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input		1.26
Risk-free interest rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Reverse Recapitalization, Contingent Consideration, Measurement Input		0.97
Risk-free interest rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Reverse Recapitalization, Contingent Consideration, Measurement Input		1.12
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input		33
Reverse Recapitalization, Contingent Consideration, Measurement Input		67.5
Expected dividends
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input	4.9	0
Reverse Recapitalization, Contingent Consideration, Measurement Input		0
Expected term \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Reverse Recapitalization, Contingent Consideration, Measurement Input		3
Expected term \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Reverse Recapitalization, Contingent Consideration, Measurement Input		4

FAIR VALUE MEASUREMENTS - Narrative (Details)	Dec. 27, 2021 shares
Fair Value Disclosures [Abstract]
Earnout shares (in shares)	7,500,000

FAIR VALUE MEASUREMENTS - Earnout Consideration (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Derivative Instrument, Contingent Consideration, Liability [Roll Forward]
Beginning balance	$ (48,002)	$ 0
Change in estimated fair value	9,575	9,575	$ 0	$ 0
Ending balance	$ (38,427)	$ (38,427)	$ 0

GEOGRAPHIC INFORMATION AND CONCENTRATIONS - Geographical Revenue Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 267,948	$ 260,586	$ 243,290
Domestic
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	218,441	213,982	191,502
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 49,507	$ 46,604	$ 51,788

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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GEOGRAPHIC INFORMATION AND CONCENTRATIONS - Narrative (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues \| Customer concentration risk \| Two customers
Concentration Risk [Line Items]
Concentration risk percentage	71.90%	72.10%
Revenues \| Customer concentration risk \| Three customers
Concentration Risk [Line Items]
Concentration risk percentage			74.90%
Accounts receivable \| Customer concentration risk \| Two customers
Concentration Risk [Line Items]
Concentration risk percentage	66.00%	61.00%
Purchases \| Vendor concentration risk \| Two vendors
Concentration Risk [Line Items]
Concentration risk percentage	10.00%
Purchases \| Vendor concentration risk \| Four vendors
Concentration Risk [Line Items]
Concentration risk percentage	9.00%

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax benefit	$ 857	$ 0	$ 0
valuation allowance	5,864
Operating Loss Carryforwards [Line Items]
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	0
Unrecognized Tax Benefits	0
Federal
Operating Loss Carryforwards [Line Items]
Net operating losses	3,892
State
Operating Loss Carryforwards [Line Items]
Net operating losses	$ 8

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

INCOME TAXES - Income Before Income Tax Benefit (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income before income taxes	$ 12,206	$ 82,557	$ 77,815	$ 81,473

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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INCOME TAXES - Components of Benefit for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ 0
State	0
Current	0
Deferred:
Federal	(856)
State	(1)
Deferred	(857)	$ 0	$ 0
Total benefit from income taxes	$ (857)	$ 0	$ 0

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

INCOME TAXES - Reconciliation of Taxes at the Federal Statutory Rate (Details)	12 Months Ended
	Dec. 31, 2021
Income Tax Disclosure [Abstract]
U.S. federal statutory tax rate	21.00%
State taxes	0.03%
Valuation allowances	0.00%
NCI adjustment	(18.53%)
Permanent differences	(3.35%)
Effective income tax rate	(0.85%)

INCOME TAXES - Components of Deferred Tax Assets (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Deferred Tax Assets:
Investment in Holdings	$ 29,102
Imputed Interest	623
Earnout consideration liability	970
Federal R&D Credit	0
Net operating loss carryforward	819
Total deferred tax assets	31,514
valuation allowance	(5,864)
Total deferred tax assets net of valuation allowance	$ 25,650

EARNINGS PER SHARE - Basic and Diluted Calculation (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 27, 2021

Dec. 31, 2020

Dec. 31, 2019

Earnings Per Share [Abstract]

Less: Net income attributable to non-controlling interest subsequent to business combination

$ 83,414

$ (70,352)

$ 77,815

$ 81,473

450

Net income attributable to CompoSecure, Inc for period subsequent to business combination

13,512

Plus: adjustment due to net effect of dilutive class B units, stock options and exchangeable notes to net income

(331)

Net income attributable to CompoSecure, Inc for period subsequent to business combination after adjustment

$ 13,181

Weighted average shares used in computing net income per share - basic (shares)

14,930

Weighted average shares used in computing net income per share - diluted (shares)

94,926

Net income per share - basic (in usd per share)

^[1]

$ 0.91

Net income per share - diluted (in usd per share)

^[1]

$ 0.14

[1]

EARNINGS PER SHARE - Antidilutive Shares (Details) shares in Thousands	12 Months Ended
	Dec. 31, 2021 shares
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (shares)	22,415
Earnout Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (shares)	7,500

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Minimum
Loss Contingencies [Line Items]
Estimate of possible commission payments due	$ 4,000
Maximum
Loss Contingencies [Line Items]
Estimate of possible commission payments due	$ 11,000

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2021
Related Party Transaction [Line Items]
Expenses, related parties	$ 9,508	$ 6,724	$ 9,232
Amounts accrued, related parties	3,402	$ 2,786
Minimum
Related Party Transaction [Line Items]
Estimate of possible commission payments due	4,000
Maximum
Related Party Transaction [Line Items]
Estimate of possible commission payments due	$ 11,000
Related Party, Potential Commissions Due [Member] \| Minimum
Related Party Transaction [Line Items]
Estimate of possible commission payments due				$ 4,000
Related Party, Potential Commissions Due [Member] \| Maximum
Related Party Transaction [Line Items]
Estimate of possible commission payments due				$ 11,000

Carrying amount as of the balance sheet date of obligations due all related parties.

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