What changed in this filing

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Item 1A. Risk Factors

2026-02-23 compared with 2025-02-24 · 36 added, 48 removed, 370 unchanged (19% of the section changed)

1 unchanged sentence

We rely on U.S.

Government contracts for a substantial percentage of our revenue, and some of those contracts are subject to continued appropriations by Congress and may be terminated or delayed if future funding is not made available.

Government contracts (either directly or as a sub-tier contractor to a government contractor) for a substantial percentage of our revenue, and some of those contracts are subject to continued appropriations by Congress and may be terminated or delayed if future funding is not made available.

In addition, the U.S.

Government may not renew or may seek to modify or terminate our existing contracts.

For the year ended December 31, 2024, U.S.

For the year ended December 31, 2025, whether directly or as a sub-tier contractor to a government contractor, U.S.

Government contracts comprised approximately 68% of our total consolidated revenues.

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Additionally, there is a risk that no continuing resolution would be entered into in certain circumstances, which would also cause a whole or partial government shutdown.

The impact of any government shutdown is uncertain.

However, if a government shutdown were to occur and were to continue for an extended period, our employees could be at risk of furlough and we could be at risk of program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could have a material adverse effect on our financial condition, results of operations and cash flows.

In the event of a government shutdown, there is uncertainty regarding which government functions would shut down or continue operations during a lapse in appropriations, and corresponding uncertainty regarding the extent or magnitude of potential impacts to our operations.

If a government shutdown were to occur and were to continue for an extended period, our employees could be at risk of furlough and we could be at risk of program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Demand for our products and services is vulnerable to economic downturns, the competitiveness of alternative energy sources and industry conditions.

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Demand for our products and services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors beyond our control, including economic and industry conditions.

These factors include, but are not limited to, inflation, geopolitical issues, the availability and cost of credit, the demand for and competitiveness of nuclear power with other energy sources, the cyclical nature of the power generation industry, low business and consumer confidence, high unemployment, energy conservation measures and decisions of utilities that operate nuclear power plants.

These factors include,

but are not limited to, inflation, geopolitical issues, the availability and cost of credit, the demand for and competitiveness of nuclear power with other energy sources, the cyclical nature of the power generation industry, low business and consumer confidence, high unemployment, energy conservation measures and decisions of utilities that operate nuclear power plants.

Our customers may find it more difficult to raise capital in the future due to limitations on the availability of credit, increases in interest rates and other factors affecting the federal, municipal and corporate credit markets.

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Our future business prospects in Canada are dependent upon the continued operation of Canadian nuclear plants and refurbishment of the majority of the plants in Ontario to extend their operating lives.

or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows.

Unfavorable economic conditions, competition from other forms of power generation, increased competition for refurbishment contracts, changes in government policy or operational or project execution issues may lead nuclear plant operators in Canada to cease operations or delay, curtail or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows.

We are subject to risks associated with contractual pricing in our industries, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses.

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and other countries, including Canada, where we manufacture heavy nuclear components and products for our medical radioisotopes business that may be sold to US customers.

federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.

For example, in January 2025, the U.S.

presidential administration stated its intention to impose a 25% tariff on imports from Canada into the United States, and the Canadian government stated it would take certain retaliatory measures.

On February 3, 2025, the U.S.

presidential administration and the Canadian prime minister announced a 30-day pause to the implementation of these tariffs.

As we currently manufacture substantially all of our products for our medical radioisotope business in Canada, a 25% tariff on all imports from Canada would increase the costs of those products manufactured in Canada and could adversely impact our gross profit for this business if we are unable to pass this cost to our customers.

Our Canadian business does not currently have any material contracts for the sale of heavy nuclear components to US customers so the direct risk related to those tariffs is currently negligible.

Such tariffs and, if enacted, any further legislation or actions taken by the U.S.

federal government or Canadian government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by such governments, could adversely impact our profitability and ability to sell products and services.

Legislation or actions taken by the U.S.

federal government, Canadian government or other foreign governments that restrict trade, such as tariffs, trade barriers, and other protectionist or retaliatory measures, could adversely impact our profitability and ability to sell products and services.

For example, new or increased tariffs would increase the cost of our products and the components and raw materials that go into making them.

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We are required to maintain minimum security standards for handling information under our government contracts and failure to do so could result in termination of those contracts.

For example, as a contractor to the DoW, we are required to comply with applicable cybersecurity standards, including the DoW's Cybersecurity Maturity Model Certification, ("CMMC") program.

CMMC requirements may change over time and could impose additional compliance obligations on us and our suppliers, and failure to meet applicable CMMC requirements could affect our ability to receive or perform certain defense-related contracts.

We continue to monitor evolving data-privacy requirements and the use of emerging technologies, such as artificial intelligence, and maintain policies intended to promote their secure and responsible use.

From time to time, we experience system interruptions and delays;

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Our systems implementations and upgrades may not result in productivity improvements at the levels anticipated, or at all.

In addition, the implementation of new technology systems may cause disruptions in our business operations.

addition, the implementation of new technology systems may cause disruptions in our business operations.

Such disruptions and any other information technology system disruptions, and our ability to mitigate these disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business.

Actual or threatened public health epidemics, pandemics or outbreaks, such as COVID-19, could have a material adverse effect on our business and results of operations.

Actual or threatened public health epidemics, pandemics or outbreaks, such as the global outbreak of COVID-19, could have a material adverse effect on our business and results of operations.

Any public health epidemic, pandemic or outbreak poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

Our business could be materially adversely impacted by employee illness, quarantines, government actions, facility closures, other actions to contain the impact of such diseases and/or potential responses to such actions by our customers, suppliers, contractors and employees.

If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health

epidemic, pandemic or outbreak.

These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs.

A public health epidemic, pandemic or outbreak and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect on our business.

The extent to which such an epidemic, pandemic or outbreak impacts our business will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of a public health epidemic, pandemic or outbreak and the actions to contain its impact.

Actual or threatened public health epidemics, pandemics or outbreaks, such as the global outbreak of COVID-19, could materially adversely affect our business.

By disrupting our employees, suppliers, contractors, customers or facilities through illness, quarantines, government-mandated shutdowns, cost increases, operational restrictions, and unfavorable contract impacts that may not be fully recoverable through insurance or government assistance.

Such events may also negatively affect global economic conditions, and the ultimate impact on our business may depend on uncertain future developments, including the severity of the outbreak and measures taken to contain it.

We rely on intellectual property law and confidentiality agreements to protect our intellectual property.

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If insurance or other risk mitigating mechanisms are insufficient for us to recover our costs and resume operations in a timely fashion, it could have a material adverse effect on our business, financial condition and results of operations.

Additionally, increased concern regarding the environment and global climate change may result in state, federal or international requirements such as the imposition of stricter limits on greenhouse gas emissions, carbon pricing mechanisms, increasing global chemical restrictions and bans, water and waste requirements and compliance and disclosure requirements.

If environmental or climate-change laws or regulations are adopted or changed, they could necessitate the need for substantial capital and other expenditures and have further negative impacts on our financial condition, results of operations and cash flows.

Increasing sustainability disclosure requirements may result in increased costs or reputational risks and could limit our ability to manufacture certain of our products.

Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims.

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The loss of the services of qualified employees and any inability to recruit effective replacements or to otherwise attract, motivate, train or retain highly qualified and diverse employees could have a material adverse effect on our business, financial condition and results of operations.

Separately, the recent presidential executive order regarding executive salaries and incentive compensation metrics applicable to defense contractors could adversely impact our ability to attract or retain executive talent.

We also have established leadership development and succession planning programs throughout our business.

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If the supply of a single-sourced or limited-sourced material is delayed or ceases, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our revenues and operating results.

In addition, a single-source or limited-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms

relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.

In addition, a single-source or limited-source supplier of

a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts.

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Food and Drug Administration ("FDA"), Health Canada and the CNSC.

There can be no assurance that we will be successful in addressing all of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations from the FDA, Health Canada or the CNSC.

In addition, commercialization of the medical radioisotope technology could

subject us to product liability claims.

There can be no assurance that we will be successful in addressing all of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations

from the FDA, Health Canada or the CNSC.

In addition, commercialization of the medical radioisotope technology could subject us to product liability claims.

The potential also exists for competitors to emerge with alternative technologies.

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Government contracts.

These laws and regulations include the FAR, Defense Federal Acquisition Regulations, the Truth in Negotiations Act, CAS, and laws, regulations, and orders restricting the use and dissemination of classified information under the U.S.

export control laws and the export of certain products and technical information.

These laws and regulations include the FAR, the Defense FAR Supplement ("DFARS"), the Truthful Cost or Pricing Data Act, the CAS national security laws, regulations, and orders restricting the use and dissemination of classified information, and U.S.

export control laws governing the export of certain products and technical information.

Certain government contracts provide audit rights by government agencies, including with respect to performance, costs, internal controls and compliance with applicable laws and regulations.

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If we fail to comply with existing or future laws and regulations or if a government audit, review, or investigation uncovers improper or illegal activities, we may be subject to civil penalties, criminal penalties, or administrative sanctions, including suspension or debarment from contracting with the U.S.

Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in facilities and could increase environmental

compliance expenditures, including increased energy, raw material and other costs.

Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in facilities and could increase

environmental compliance expenditures, including increased energy, raw material and other costs.

If we are unable to comply with any such regulatory changes, it could have a material adverse effect on our business, financial condition and results of operations.

Further, our reputation could suffer harm if allegations of impropriety were made or found against us, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

In addition, the President recently issued Executive Order ("EO") 14372 that could limit certain contractors performing work under critical defense weapons, supplies, and equipment contracts from issuing dividends or distributions, share repurchases, increasing executive salaries, and using particular metrics to determine executive incentive compensation.

While there remains uncertainty as to how EO 14372 will be interpreted and implemented, it is expected that EO 14372 will be implemented this year through a new DFARS clause and related contract provisions and that the EO's restrictions on dividends, distributions, share repurchases, executive salaries and foreign sales programs will, in some cases, be imposed only after the DoW determines that a contractor has failed to meet identified contract performance requirements.

Employee, agent or partner misconduct or our overall failure to comply with laws, regulations or government contracts could weaken our ability to win contracts, lead to the suspension of our operations and result in reduced revenues and profits.

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• potential liabilities arising out of a nuclear, radiological or criticality incident, whether or not it is within our control.

Our nuclear operations are subject to various safety-related requirements imposed by the U.S.

Our nuclear operations are subject to various safety and quality-related requirements, and occupational radiation protection requirements, imposed by the U.S.

Government, the DOE, the NRC and the CNSC.

In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down our operations, depending upon the assessment of the severity of the situation.

In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down our operations, depending upon the assessment

of the severity of the situation.

Non-compliance may also impact our competitive position when seeking future contracts.

Revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures.

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A violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of our contracts or debarment from bidding on contracts.

Environmental, social and governance matters and any related reporting obligations may impact our business.

and international regulators, investors and other stakeholders are increasingly focused on environmental, social and governance matters.

For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability and climate change, human capital management and cybersecurity, are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.

Our response will require increased costs to comply, the implementation of new reporting processes, entailing additional compliance risk, a skilled workforce and other incremental investments.

Limitations or modifications to indemnification regulations of the U.S.

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The Price-Anderson Act comprehensively regulates the manufacture, use and storage of radioactive materials, while promoting the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and DOE contractors.

(with an available indemnification amount of approximately $16.5 billion) and in foreign countries (with an available indemnification amount of $2 billion).

Because we provide nuclear fabrication and other services to the DOE relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such nuclear power plants, we expect, in the event of a nuclear incident or precautionary evacuation (as such terms are defined in the Atomic Energy Act), to be entitled to the indemnification protections under the Price-Anderson Act against liability arising from nuclear incidents occurring in the U.S., with an available indemnification amount, for our DOE contracts, of approximately $16.5 billion (for nuclear incidents or precautionary evacuations occurring within the US) and of $2 billion (for nuclear incidents or precautionary evacuations occurring in foreign countries).

The statutory authority for indemnification under the Price-Anderson Act has been extended by Congress five times, most recently through December 2065 by Section 107 to the Further Consolidated Appropriations Action, 2024 (Public Law 118-47, March 23, 2024).

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Moreover, because we manufacture nuclear components for the U.S.

Government's defense program, we may be entitled to some of the indemnification protections afforded by Public Law 85-804 for certain of our nuclear operations risks.

Government's defense program, we may be entitled to some of the indemnification protections afforded by Public Law 85-804 for certain of our nuclear and hazardous operations risks.

Public Law 85-804 authorizes certain agencies of the U.S.

Government, such as the DOE and the DoD, to indemnify their contractors against unusually hazardous or nuclear risks when such action would facilitate the national defense.

Government, such as the DOE and the DoW, to indemnify their contractors against unusually hazardous or nuclear risks when such action would facilitate the national defense.

However, because the indemnification protections afforded by Public Law 85-804 are granted on a discretionary basis, situations could arise where the U.S.

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Any delay or denial of such approvals could have a material adverse effect on our medical isotope business.

In addition, if new legislation or regulations are enacted or implemented, or if existing laws or regulations are amended or are interpreted or enforced differently, we may be required to obtain additional operating permits or approvals.

In addition, if new legislation, regulations or presidential executive orders are enacted or implemented, or if existing laws, regulations or presidential executive orders are amended or are interpreted or enforced differently, we may be required to obtain additional operating permits or approvals.

Our inability to obtain, and to comply with, the permits and approvals required for our business could have a material adverse effect on us.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors