Compass Diversified added two more years – 2022 and 2023 – as financial statements that weren’t reliable in addition to its previously disclosed 2024 because of alleged fraud at its portfolio company, Newport Beach-based Lugano Holding.
Compass said it is focused on completing the investigation into Lugano, whose founder and former Chief Executive Moti Ferder has been accused of fraud. Efforts to contact Ferder have been unsuccessful.
Chief Executive Elias Sabo said Compass’s eight other subsidiaries – including Costa Mesa-based 5.11 Tactical – “continue to operate normally, have strong balance sheets, and collectively generate substantial cash flow.
“We have ample liquidity and significant access to capital via our revolving credit facility,” Sabo said. “We continue to work constructively with our banking partners and bondholders to ensure flexibility and stability as we move forward. Our primary focus remains on maximizing long-term value for all stakeholders.”
Shares of Compass fell 1.4% to $6.17 in after-hours trading. The company currently has a $471 million market cap. The company, while based in Westport, Conn., has several top executives who work out of its Costa Mesa office.
The Business Journal’s June 30th issue will have articles on new developments regarding Lugano.
