−Removed: You should carefully consider the risks and uncertainties described below, as well as other information contained in this Annual Report, including our financial statements and the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” when evaluating our business.
+Added: You should carefully consider the risks and uncertainties described below, as well as other information contained in this Annual Report, including the notes to our consolidated financial statements and the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” when evaluating our business.
The risks described below are not the only ones facing us, and are not necessarily presented in the order of importance.
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defense spending for the vast majority of our revenues.
−Removed: Disruptions or deteriorations in our relationships with the relevant agencies of the U.S.
+Added: Disruptions, including from government shutdowns, or deteriorations in our relationships with the relevant agencies of the U.S.
government could have a material adverse impact on our business, financial condition and results of operations.
−Removed: • Significant delays or reductions in appropriations for our programs and changes in U.S.
+Added: • Significant delays, including from government shutdowns, or reductions in appropriations for our programs and changes in U.S.
government priorities and spending levels more broadly may negatively impact our business and could have a material adverse impact on our business, financial condition and results of operations.
−Removed: • Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-materials type contracts.
+Added: • Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and T&M type contracts.
In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation.
• We are subject to the U.S.
−Removed: government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
+Added: government’s requirements, including the DoW’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
• We are subject to a number of procurement, international trade, and other rules, regulations and requirements related to our industry, our products, and the businesses we operate.
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• Contractual disputes with industry participants or the inability of our key suppliers to timely deliver our components, parts or services, could cause our products, systems or services to be produced or delivered in an untimely or unsatisfactory manner.
−Removed: • We are susceptible to a security breach, through cyber-attack, cyber-intrusion, insider threats or otherwise, and to other significant disruptions of our IT networks and related systems, or those of our customers, suppliers, vendors, subcontractors, partners, or other third parties.
+Added: • We may be susceptible to a security breach, through cyber-attack, cyber-intrusion, insider threats or otherwise, and to other significant disruptions of our IT networks and related systems, or those of our customers, suppliers, vendors, subcontractors, partners, or other third parties.
• We may be at greater risk from terrorism and other threats to our physical security and personnel, than other companies.
• Our future success will depend on our ability to respond to the rapid technological changes in the markets in which we compete, and our ability to introduce new or enhanced products and to enter into new markets.
−Removed: • Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon factors not wholly within our control.
+Added: • Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon
+Added: factors not wholly within our control.
Failure to meet our contractual obligations could adversely affect our business, financial condition, results of operations, reputation and future prospects.
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• We have unfunded obligations under our pension plans, and we use estimates in accounting for our pension plans and changes in our estimates could adversely affect our financial condition and results of operations.
−Removed: • Changes to financial accounting standards may affect our results of operations and cause us to change our business practices.
• Acquisitions could result in operating difficulties, dilution and other harmful consequences.
−Removed: • We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster or other significant disruption.
+Added: • We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster, severe weather or other significant disruption.
• We cannot predict the consequences of future geopolitical events, but they may adversely affect the markets in which we operate, our ability to insure against risks, our operations or our results of operations.
−Removed: • We operate under a proxy agreement with the DoD that regulates significant areas of our governance.
−Removed: If we fail to comply with the proxy agreement our classified U.S.
+Added: • We operate under an amended and restated proxy agreement with the DoW that regulates significant areas of our governance.
+Added: If we fail to comply with the amended and restated proxy agreement our classified U.S.
government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations.
1 unchanged sentence
• Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage mergers and acquisitions or change of control transactions.
−Removed: • Risks related to ownership of our common stock.
+Added: • There can be no assurance that we will continue to pay or increase our dividend or to repurchase shares of our common stock.
+Added: Additionally, there can be no assurance that we will not accelerate our dividend or repurchases of our common stock.
Risks Relating to Our Business
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We depend on revenues from contracts and subcontracts with the U.S.
−Removed: government, including defense-related programs with the DoD and a broad range of programs with all branches of the U.S.
+Added: government, including defense-related programs with the DoW and a broad range of programs with all branches of the U.S.
Revenues derived directly or indirectly from contracts with the U.S.
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government’s willingness to commit substantial resources to the continued purchase of our products, could significantly reduce our revenues and have a material adverse impact on our business, financial condition and results of operations.
−Removed: Significant delays or reductions in appropriations for our programs and changes in U.S.
+Added: Significant delays, including from government shutdowns, or reductions in appropriations for our programs and changes in U.S.
government priorities and spending levels more broadly may negatively impact our business and could have a material adverse impact on our business, financial condition and results of operations.
The availability of U.S.
−Removed: government funding for significant programs in which we participate may be impacted by a number of factors beyond our control including the overall federal budget, changes in spending priorities and defense spending levels, sequestration, the appropriations process, use of continuing resolutions (with restrictions, e.g., on starting new programs) and the permissible level of federal debt.
+Added: government funding for significant programs in which we participate may be impacted by a number of factors beyond our control including full or partial government shutdowns, the overall federal budget, changes in spending priorities and defense spending levels, sequestration, the appropriations process, use of continuing resolutions (with restrictions, e.g., on starting new programs) and the permissible level of federal debt.
These factors may also delay or adversely impact purchasing or payment decisions by our customers.
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government priorities and spending levels have fluctuated and may continue to fluctuate over time.
−Removed: We cannot predict the impact on existing, follow-on, replacement or future programs from potential changes in priorities whether due to changes in defense spending levels, the threat environment, procurement strategy, military strategy and planning and/or changes in social, economic or political priorities.
−Removed: As the DoD budget represents the largest part of the federal discretionary budget, it is possible that the various legislative actions might exert downward pressure on defense spending, as well as other non-defense discretionary outlays.
+Added: We cannot predict the impact on existing, follow-on, replacement or future programs from potential changes in priorities whether due to changes in defense spending levels, the threat environment, procurement strategy, the evolution of warfare, military strategy and planning and/or changes in social, economic or political priorities.
+Added: As the DoW budget represents the largest part of the federal discretionary budget, it is possible that the various legislative actions might exert downward pressure on defense spending, as well as other non-defense discretionary outlays.
government may also delay, modify or cancel ongoing competitive bidding processes, procurements and programs, as well as change its acquisition strategy.
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defense spending priorities, what challenges budget reductions will present for the defense industry, whether annual appropriations bills for all agencies will be enacted for U.S.
−Removed: government fiscal year 2025 and thereafter, and how the current administration will approach those decisions through the budgeting process.
−Removed: Additionally, the current U.S.
−Removed: administration has discussed various changes to defense spending levels ranging from across-the-board percentage cuts, to a change in spending allocations in favor of new priorities, and potential increases in the top-line spending profile.
−Removed: It remains unclear whether and to what extent the DoD’s budget may change and, if it does, to what extent our business, financial condition and results of operations may be affected.
+Added: government FY2027 and thereafter, and how the current administration will approach those decisions through the budgeting process.
+Added: While the FY2026 DoW budget was approved, there remains uncertainty with regard to the U.S.
+Added: government’s spending priorities, including whether and to what extent the DoW’s budget may change, and, if it does, to what extent our business, financial condition and results of operations may be affected.
Additionally, the U.S.
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government agencies due to changes in the definition of “inherently governmental” work, such as proposals to limit contractor access to sensitive or classified information and work assignments.
−Removed: Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-materials type contracts.
+Added: Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and T&M type contracts.
In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation.
−Removed: We generate revenue through various fixed-price, cost-plus and time-and-materials contracts.
+Added: We generate revenue through various fixed-price, cost-plus and T&M type contracts.
For a general description of our U.S.
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We are subject to the U.S.
−Removed: government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
−Removed: We require a facility security clearance to perform on classified contracts for the DoD and certain other agencies of the U.S.
−Removed: Security clearances are subject to regulations and requirements including, among others, the National Industrial Security Program Operating Manual (the “NISPOM”), which specifies the requirements for the protection of classified information released or disclosed in
−Removed: connection with classified U.S.
+Added: government’s requirements, including the DoW’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
+Added: We require a facility security clearance to perform on classified contracts for the DoW and certain other agencies of the U.S.
+Added: Security clearances are subject to regulations and requirements including, among others, the National Industrial Security Program Operating Manual (the “NISPOM”), which specifies the requirements for the protection of classified information released or disclosed in connection with classified U.S.
government contracts.
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Furthermore, the Italian state beneficially owns approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.).
−Removed: In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI through a proxy agreement, which we have done by entering into an interim proxy agreement, with the DoD.
−Removed: We are currently operating under an interim proxy agreement while we seek to enter into a new proxy agreement with the DoD.
+Added: In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI through a proxy agreement, which we have done by entering into an amended and restated proxy agreement, with the DoW.
The terms of any new proxy agreement or other mitigation agreements could impose heightened or new restrictions, which could further impact our business operations.
Proxy agreements, including ours, typically have limited duration and need to be renewed on a regular basis.
−Removed: For additional information on the terms and requirements of the proxy agreement, see “— Risks Relating to Our Ownership and Status under the Proxy Agreement — We operate under a proxy agreement with the DoD that regulates significant areas of our governance.
−Removed: If we fail to comply with the proxy agreement our classified U.S.
+Added: For additional information on the terms and requirements of the amended and restated proxy agreement, see “— Risks Relating to Our Ownership and Status under the Amended and Restated Proxy Agreement — We operate under an amended and restated proxy agreement with the DoW that regulates significant areas of our governance.
+Added: If we fail to comply with the amended and restated proxy agreement, our classified U.S.
government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations .”
−Removed: While we currently mitigate FOCI under the interim proxy agreement, the DoD reserves the right to terminate the proxy agreement or impose such additional security safeguards as it believes necessary in order to prevent unauthorized access to classified and controlled unclassified information and any U.S.
−Removed: government agency may deny or revoke our access to classified and controlled unclassified information under its jurisdiction if it considers it necessary to protect national security.
−Removed: Failure to maintain an agreement with the DoD regarding the appropriate FOCI mitigation arrangement could result in invalidation or termination of our facility security clearances, which in turn would mean that we would not be able to perform under current or enter into future contracts with the U.S.
+Added: While we currently mitigate FOCI under the amended and restated proxy agreement, the DoW reserves the right to terminate such proxy agreement or impose such additional security safeguards as it believes necessary in order to prevent unauthorized access to classified and controlled unclassified information and any U.S.
+Added: government agency may deny or revoke our access to classified and controlled
+Added: unclassified information under its jurisdiction if it considers it necessary to protect national security.
+Added: Failure to maintain an agreement with the DoW regarding the appropriate FOCI mitigation arrangement could result in invalidation or termination of our facility security clearances, which in turn would mean that we would not be able to perform under current or enter into future contracts with the U.S.
government requiring facility security clearances.
We depend on revenues from contracts and subcontracts with the U.S.
−Removed: government, including defense-related programs with the DoD and a broad range of programs with each of the service branches.
+Added: government, including defense-related programs with the DoW and a broad range of programs with each of the service branches.
Revenues derived directly or indirectly from contracts with the U.S.
government were approximately 80%, 79% and 80% for the years ended December 31, 2025, 2024, and 2023, respectively.
−Removed: If we fail to maintain an agreement with the DoD regarding the appropriate FOCI mitigation arrangement or otherwise fail to comply with the NISPOM, this could have a material adverse impact on our business, financial condition and results of operations.
+Added: If we fail to maintain an agreement with the DoW regarding the appropriate FOCI mitigation arrangement or otherwise fail to comply with the NISPOM, this could have a material adverse impact on our business, financial condition and results of operations.
For further information, see “— Risks Relating to Our Business — We depend on U.S.
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Additionally, our U.S.
−Removed: government contracts are heavily regulated and subject to audit and negative audit
−Removed: findings which could result in the termination of these or other contracts or the failure to receive future awards, see “— Risks Relating to Our Business — We operate in a highly regulated environment and are routinely audited and reviewed by the U.S.
+Added: government contracts are heavily regulated and subject to audit and negative audit findings which could result in the termination of these or other contracts or the failure to receive future awards, see “— Risks Relating to Our Business — We operate in a highly regulated environment and are routinely audited and reviewed by the U.S.
government and its agencies .”
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They could also ultimately result in termination of a contract (or contracts) for convenience or reduced future orders.
−Removed: Furthermore, President Trump issued an Executive Order in January 2025, which requires, in relevant part, that every Federal contract or grant award include a clause that requires the contractor or grant recipient to (1) agree that its compliance with all applicable federal anti-discrimination laws is material to the government’s payment decisions on such contract or grant for purposes of the False Claims Act, and (2) certify that it does not operate any programs promoting diversity, equity and inclusion that violate any applicable federal anti-discrimination laws.
+Added: Furthermore, the President issued an Executive Order in January 2025, which requires, in relevant part, that every Federal contract or grant award include a clause that requires the contractor or grant recipient to (1) agree that its compliance with all applicable federal anti-discrimination laws is material to the government’s payment decisions on such contract or grant for purposes of the False Claims Act, and (2) certify that it does not operate any programs promoting diversity, equity and inclusion that violate any applicable federal anti-discrimination laws.
The Executive Order increases our compliance risk through an increased risk of civil False Claims Act liability, if our current practices are deemed to violate the federal anti-discrimination laws.
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government contracts, which are heavily regulated and subject to audit by the U.S.
−Removed: government and its agencies, such as the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency, the DoD Inspector General, and others.
+Added: government and its agencies, such as the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency, the DoW Inspector General, and others.
These agencies review performance on government contracts, direct and indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards.
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These laws and regulations include, but are not limited to, the Anti-Kickback Act, the Arms Export Control Act, including the ITAR, the Communications Act, the Defense Federal Acquisition Regulations, the EAR (which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the FCPA, the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S.
−Removed: Department of the Treasury, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S.
+Added: Department of the Treasury, DoW, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S.
Customs and Border Protection and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
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These organizational conflicts of interest regulations have led to increased bid protests related to arguments to disqualify or overturn awards based on conflict grounds.
−Removed: Considerable uncertainty exists regarding future legislation and regulations as the current administration has issued changing guidance on a wide array of topics including the Executive Order issued in January 2025, which requires, in relevant part, that every Federal contract or grant award include a clause that requires the contractor or grant recipient to (1) agree that its compliance with all applicable federal anti-discrimination laws is material to the government’s payment decisions on such contract or grant for purposes of the False Claims Act, and (2) certify that it does not operate any programs promoting diversity, equity and inclusion that violate any applicable federal anti-discrimination laws.
+Added: Considerable uncertainty exists regarding future legislation and regulations as the current administration has issued changing guidance on a wide array of topics.
Future legislation and regulations may increase the restrictions in current organizational conflicts of interest regulations and rules.
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Our industry has experienced, and we expect will continue to experience, significant changes to business practices globally as a result of an increased focus on affordability, efficiencies, business systems, recovery of costs and a reprioritization of available defense funds to key areas for future defense spending.
−Removed: For example, the current administration implemented an Executive Order in January 2025 creating the Department of Government Efficiency which has the stated purpose of modernizing Federal technology and software to maximize governmental efficiency and productivity.
−Removed: These initiatives and changes to procurement practices may change the way U.S.
+Added: Any initiatives and changes to procurement practices may change the way U.S.
government contracts are solicited, negotiated and managed, which may affect whether and how we pursue opportunities to provide our products and services to the U.S.
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Changes in procurement practices favoring incentive-based fee arrangements, different award criteria, non-traditional contract provisions and government contract negotiation offers also may affect our results of operations and predictability.
−Removed: government has been pursuing and may continue to pursue these and other
−Removed: policies that could negatively impact our profitability and adversely impact our business, financial condition and results of operations.
+Added: government has been pursuing and may continue to pursue these and other policies that could negatively impact our profitability and adversely impact our business, financial condition and results of operations.
We use estimates in pricing and accounting for many of our programs, and changes in our estimates could adversely impact our business, financial condition and results of operations.
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This requires us to estimate the costs that we will incur in connection with future contracts.
−Removed: Failure to accurately estimate the costs that we will incur including as a result of changes in underlying assumptions, circumstances or estimates may materially reduce our profit or cause a loss on these contracts and adversely impact our business, financial condition and results of operations.
+Added: Failure to accurately estimate the costs that we will incur including as a result of changes in
+Added: underlying assumptions, circumstances or estimates may materially reduce our profit or cause a loss on these contracts and adversely impact our business, financial condition and results of operations.
Additionally, accounting for our contracts requires judgment relative to assessing costs, including costs associated with customer-directed delays and reductions in scheduled deliveries, unfavorable resolutions of claims and contractual matters, judgments associated with estimating contract revenue and costs and assumptions for schedule and technical issues.
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Our total backlog consists of funded and unfunded amounts.
−Removed: Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.
+Added: Funded backlog represents the revenue value of orders for products and services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.
Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts.
We evaluate bookings which we define as the total value of contract awards received from the U.S.
−Removed: government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S.
−Removed: As of December 31, 2024, our total remaining contract value was approximately $8,509 million with bookings of $4,077 million.
+Added: government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the funded value of contract awards and orders received from customers other than the U.S.
+Added: As of December 31, 2025, our total remaining contract value was approximately $8,448 million with bookings for the year of $4,245 million.
We historically have not realized all of the revenue included in our total contract value or bookings, and we may not realize all of the revenue included in our total contract value or bookings in the future.
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a contract’s funding or scope could be reduced, modified, delayed, de-obligated or terminated early, including as a result of a lack of appropriated funds or cost cutting initiatives and other efforts to reduce U.S.
−Removed: government spending
−Removed: and/or the automatic federal defense spending cuts required by sequestration;
+Added: government spending and/or the automatic federal defense spending cuts required by sequestration;
in the case of funded backlog, the period of performance for the contract has expired or the U.S.
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• the adequacy of our current financing arrangements and access to additional financing.
−Removed: We cannot predict future capital needs, the sufficiency of our current financing or our ability to obtain additional financing if we need it.
+Added: We cannot predict future capital needs, the sufficiency of our current financing or our ability to obtain additional financing if needed, on terms acceptable to us, if at all.
Our operations are capital intensive, and we rely heavily on financing, including working capital financing, such as factoring and supply chain financing.
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Although we believe that our available cash resources, together with our access to credit facilities, as described in Note 12:
−Removed: Debt and future cash that we expect to generate from our operations, are sufficient to meet our presently anticipated liquidity needs and capital expenditure requirements, we might in the future need to raise additional funds to, among other things:
+Added: Debt to the Consolidated Financial Statements, and future cash that we expect to generate from our operations, are sufficient to meet our presently anticipated liquidity needs and capital expenditure requirements, we might in the future need to raise additional funds to, among other things:
• fund our operations;
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We may be required to obtain the consent of US Holding in order to obtain financing and there is no guarantee that their consent will be granted.
−Removed: See “— Risks Relating to Our Ownership and Status under the Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their majority ownership in us may discourage change of control transactions .” The existing debt obligations of Leonardo S.p.A., which contain restrictions applicable to subsidiaries of Leonardo S.p.A., including us, may also negatively impact our ability to obtain additional financing on terms acceptable to us, if at all.
+Added: See “— Risks Relating to Our Ownership and Status under the Amended and Restated Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their majority ownership in us may discourage change of control transactions .” The existing debt obligations of Leonardo S.p.A., which contain restrictions applicable to subsidiaries of Leonardo S.p.A., including us, may also negatively impact our ability to obtain additional financing on terms acceptable to us, if at all.
In addition, any decline in the ratings of our corporate credit or any indications from the rating agencies that their ratings on our corporate credit are under surveillance or review with possible negative implications could adversely impact our ability to access capital.
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These and other adverse macroeconomic consequences could result in our inability to operate profitably and reduce our earnings.
−Removed: The requirements of being a public company may strain our resources and divert management’s attention, and the increases in legal, accounting and compliance expenses may be greater than we anticipate.
−Removed: In 2022, we became a public company, and as such, have incurred, and may continue to incur, legal, accounting and other expenses that we did not incur as a private company.
−Removed: We are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of the Nasdaq Stock Exchange (the “Nasdaq”), including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.
−Removed: Compliance with these rules and regulations can be burdensome.
−Removed: Our management and other personnel need to devote a substantial amount of time to these compliance initiatives.
−Removed: Moreover, these rules and regulations will increase our historical legal and financial compliance costs and will make some activities more time-consuming and costly.
−Removed: We may need to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge and maintain an internal audit function, which will increase our operating expenses.
−Removed: We are evaluating these rules and regulations and their impact on our business and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
Failure to maintain an effective system of internal control over financial reporting or to remediate weaknesses could materially harm our revenues, erode stockholder confidence in our ability to pursue business and report our financial results/condition, and negatively affect the trading price of our common stock.
−Removed: As a public reporting company, we are required to establish and maintain effective internal control over financial reporting.
−Removed: Failure to establish such internal control, or any failure of such internal control once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations.
−Removed: Any failure of our internal control over financial reporting could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.
+Added: As a public reporting company, we are required to maintain an effective system of internal control over financial reporting.
+Added: Failure to maintain an effective system of internal control over financial reporting could adversely impact our public disclosures regarding our business, financial condition or results of operations.
+Added: Any such failure could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.
Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require annual assessment of our internal control over financial reporting.
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Any actual or perceived weaknesses and conditions that need to be addressed in the internal controls over financial reporting (including those weaknesses identified in periodic reports), or disclosure of management’s assessment of the internal controls over financial reporting may have an adverse impact on the price of our common stock.
−Removed: The agreements governing our debt contain various covenants that limit our ability to take certain actions and also require us to meet financial maintenance tests, and failure to comply with these covenants could have an adverse impact on our business, financial condition and results of operations.
−Removed: Our financing arrangements contain restrictions, covenants and events of default that, among other things, require us to satisfy certain financial tests and maintain certain financial ratios and restrict our ability to incur additional indebtedness and to refinance our existing indebtedness.
+Added: The agreements governing our debt contain various covenants that limit our ability to take certain actions and also require us to meet financial maintenance tests, and failure to comply with these
+Added: covenants could have an adverse impact on our business, financial condition and results of operations.
+Added: Our financing arrangements, including our senior unsecured credit agreement, contain restrictions, covenants and events of default that, among other things, require us to satisfy certain financial tests and maintain certain financial ratios and restrict our ability to incur additional indebtedness and to refinance our existing indebtedness.
The terms of our financing arrangements may impose various restrictions and covenants on us that could limit our ability to respond to market conditions, provide for capital investment needs or take advantage of business opportunities by limiting the amount of additional borrowings we may incur.
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This includes efforts to provide solutions that integrate capabilities and resources.
−Removed: Artificial Intelligence technologies have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.
−Removed: Many of our larger competitors have significantly greater financial resources than we do and have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do in
−Removed: some areas, including as a result of substantial industry consolidation, which increased the market share of certain of our competitors and enabled them to take advantage of economies of scale and develop new technologies.
+Added: AI technologies have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.
+Added: Many of our larger competitors have significantly greater financial resources than we do and have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do in some areas, including as a result of substantial industry consolidation, which increased the market share of certain of our competitors and enabled them to take advantage of economies of scale and develop new technologies.
These larger competitors may also benefit from supply chain leverage and pricing flexibility, including, in some cases, the ability to price contracts at a loss, due to their size.
1 unchanged sentence
A number of these competitors are also our suppliers and customers.
−Removed: Additionally, some customers, including the DoD, are increasingly purchasing “off the shelf” components from commercial suppliers in lieu of using traditional defense contractors to design and manufacture such items.
+Added: Additionally, some customers, including the DoW, are increasingly purchasing “off the shelf” components from commercial suppliers in lieu of using traditional defense contractors to design and manufacture such items.
Many of our smaller competitors may be able to adapt more quickly to new market opportunities or customer requirements, and focus their resources on developing and commercializing specific technologies or targeting particular market segments.
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An increase in competition from these smaller companies may force us to lower our prices or increase our spending on research and development, sales, and marketing, which could have a deleterious effect on our operating margins and profitability.
−Removed: As these companies continue to expand, their scale and scope may also grow, potentially allowing them to compete more directly and effectively against us.
+Added: As these companies continue to expand, their scale and scope may also grow, potentially allowing them to compete more directly and effectively
Our failure to compete effectively with these smaller, innovative companies can reduce our market share and materially impact our business, financial condition, and operating results.
3 unchanged sentences
Following any contract award, we may experience significant expense or delay, contract modification or contract rescission as a result of our competitors protesting or challenging contracts awarded to us in competitive bidding.
−Removed: Preferences or set-asides for minority-owned, small and small disadvantaged businesses could impact our ability to be a prime contractor and limit our opportunity to work as a subcontractor on certain governmental procurements.
−Removed: As a result of the Small Business Administration (“SBA”) set-aside program, the federal government may decide to restrict certain procurements only to bidders that qualify as minority-owned, small, or small disadvantaged businesses.
+Added: Preferences or set-asides for small or small disadvantaged businesses could impact our ability to be a prime contractor and limit our opportunity to work as a subcontractor on certain governmental procurements.
+Added: As a result of the Small Business Administration (“SBA”) set-aside program, the federal government may decide to restrict certain procurements only to bidders that qualify as small or small disadvantaged businesses.
We would not be eligible to perform as a prime contractor on those programs and in general would be restricted to no more than 49% of the work as a subcontractor on those programs.
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We rely on the strength of our relationships with other industry participants, including major prime contractors and small businesses, to form strategic alliances and we have entered, and expect to continue to enter into joint venture, teaming, partnership, subcontractor and other arrangements.
−Removed: These activities involve risks and uncertainties, including the risk that a joint venture or applicable entity fails to satisfy its obligations, which may result in certain liabilities to us from guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the
−Removed: risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts and the business arrangements generally.
+Added: These activities involve risks and uncertainties, including the risk that a joint venture or applicable entity fails to satisfy its obligations, which may result in certain liabilities to us from guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts and the business arrangements generally.
In some cases, these relationships are subject to exclusivity arrangements which subject us to the risk that we may be forced to forego superior opportunities with a different partner.
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This position may create conflicts of interest and uncertainty in circumstances where we continue to operate as both a subcontractor for and a competitor to one of our industry partners or customers, potentially jeopardizing potential revenue opportunities.
−Removed: While we must compete effectively in the marketplace, our future alliances may depend on our industry partners’ perception of us.
+Added: While we must compete effectively in the marketplace, our future alliances may depend on our industry
+Added: partners’ perception of us.
Our ability to win new and/or follow-on contracts may be dependent upon our relationships within the defense industry.
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We may have disputes with our subcontractors or suppliers, material supply constraints or problems, or component, subsystems or services problems in the future.
−Removed: Also, our subcontractors and other suppliers may not be able to acquire or maintain the quality of the materials, components, subsystems and services they supply, which might result in greater product returns, service problems and warranty
−Removed: claims and could harm our business, financial condition and results of operations.
+Added: Also, our subcontractors and other suppliers may not be able to acquire or maintain the quality of the materials, components, subsystems and services they supply, which might result in greater product returns, service problems and warranty claims and could harm our business, financial condition and results of operations.
Further, warranty claims brought by our customers related to third-party components and materials may arise after our ability to bring corresponding warranty claims against such suppliers expire, which could result in costs to us.
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Each of these subcontractor and supplier risks could have a material adverse impact on our business, financial condition and results of operations.
−Removed: We are susceptible to a security breach, through cyber-attack, cyber-intrusion, insider threats or otherwise, and to other significant disruptions of our IT networks and related systems, or those of our customers, suppliers, vendors, subcontractors, partners, or other third parties.
−Removed: We store sensitive data, including information relating to national security and other sensitive government functions, intellectual property and technology, proprietary business information, and confidential employee information such as personally identifiable or protected health information on our servers and databases.
+Added: We may be susceptible to a security breach, through cyber-attack, cyber-intrusion, insider threats or otherwise, and to other significant disruptions of our IT networks and related systems, or those of our customers, suppliers, vendors, subcontractors, partners, or other third parties.
+Added: We store sensitive data, including information relating to national security and other sensitive government functions, intellectual property and technology, proprietary business information, and
+Added: confidential employee information such as personally identifiable or protected health information on our servers and databases.
We are subject to laws and rules issued by U.S.
−Removed: governments and agencies concerning safeguarding and maintaining information confidentiality including extensive and evolving cyber requirements of the DoD.
+Added: governments and agencies concerning safeguarding and maintaining information confidentiality including extensive and evolving cyber requirements of the DoW.
We face the risk of a security breach with respect to that data, whether through cyber-attack, cyber-intrusion or insider threat via the Internet, malware, e-mail attachments, persons inside our organization or with access to systems inside our organization, threats to the physical security of our facilities and employees or other significant disruption of our IT networks and related systems or those of our suppliers or subcontractors.
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Our efforts and measures have not been effective in the case of every incident, but no incident has had a material negative impact on us to date.
+Added: In addition, the rapid evolution and increased adoption of AI or machine learning technologies may intensify our cybersecurity risks.
Sensitive data saved on networks, systems and facilities therefore remain vulnerable because of the risk that cybersecurity incidents, including, but not limited to, attempts to gain unauthorized access to data;
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Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures.
−Removed: Thus, it is impossible for us to entirely mitigate this risk, and there can be no assurance that future cybersecurity incidents will not have a material
−Removed: negative impact on us.
+Added: Thus, it is impossible for us to entirely mitigate this risk, and there can be no assurance that future cybersecurity incidents will not have a material negative impact on us.
A security breach or other significant disruption involving these types of information and IT networks and related systems could:
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government) and the general public.
−Removed: Additionally, a failure to comply with the National Institute of Standards and Technology Special Publication 800-171 or other DoD cybersecurity requirements including the Cybersecurity Material Model Certificate (“CMMC”), whether or not resulting in a security breach or disruption, could restrict our ability to bid for, be awarded and perform on DoD contracts.
−Removed: DoD requirements to comply with the CMMC now and in the future, and any obligations that may be imposed on us under the CMMC that may be different from or in addition to those otherwise required by applicable laws and regulations, may cause additional expense for compliance.
+Added: Additionally, a failure to comply with the National Institute of Standards and Technology Special Publication 800-171 or other DoW cybersecurity requirements including the Cybersecurity Material Model Certificate (“CMMC”), whether or not resulting in a security breach or disruption, could restrict our ability to bid for, be awarded and perform on DoW contracts.
+Added: DoW requirements to comply with the CMMC now and in the future, and any obligations that may be imposed on us under the CMMC that may be different from or in addition to those otherwise required by applicable laws and regulations, may cause additional expense for compliance.
We must also rely on the safeguards put in place by customers, suppliers, vendors, subcontractors, partners in teaming arrangements or other third parties to minimize the impact of cyber threats, other security threats or business disruptions.
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The markets in which we compete are characterized by rapid technological developments and frequent new product introductions, enhancements and modifications.
−Removed: This includes efforts to provide solutions that integrate Artificial Intelligence technologies that have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.
−Removed: Additionally, our ability to develop other new products and technologies that anticipate changing customer requirements, reduce costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results of operations.
+Added: This includes efforts to provide solutions that integrate AI technologies, including AI-optimized open architecture software that have rapidly developed and are continuously evolving, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.
+Added: Additionally, our ability to develop other new products and technologies that anticipate changing customer requirements, reduce
+Added: costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results of operations.
We will continue to make substantial capital expenditures and incur significant R&D costs aimed at improving our manufacturing capability, reducing costs, and developing and introducing new products and enhancements.
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Examples of unforeseen problems that could negatively affect revenue, schedule and results of operations include premature failure of products that cannot be accessed for repair or replacement, failure to perform in anticipated or unanticipated battlefield conditions, unintended explosions or similar events, problems with design, quality and workmanship, inadequate delivery of subcontractor components or services and degradation of product performance.
−Removed: These failures could
−Removed: result, either directly or indirectly, in loss of life or property.
+Added: These failures could result, either directly or indirectly, in loss of life or property.
Among the factors that may affect revenue and results of operations could be inaccurate cost estimates, design issues, human factors, unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, and, in the case of certain contracts, repayment to the government customer of contract cost and fee payments we previously received, or replacement obligations.
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However, we do not have the right to prohibit the U.S.
−Removed: government from using certain technologies developed by us or to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S.
+Added: government from using certain technologies developed by us or to prohibit third-party
+Added: companies, including our competitors, from using those technologies in providing products and services to the U.S.
government often obtains the right to royalty-free use of technologies or intellectual property that we develop under U.S.
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Moreover, we may not be able to obtain royalty or license agreements on terms acceptable to us, or at all.
−Removed: We also may be subject to significant damages or injunctions against development and sale of certain of our products, services and solutions.
+Added: We also may be subject to significant damages or injunctions against development and sale of certain of our products, services and
Our success depends in large part on our proprietary technology.
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Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management’s attention away from other aspects of our business.
−Removed: Further, in some cases the US government is unilaterally empowered to use, or allow our competitors to use, patented technology, subject only to the obligation to pay reasonable compensation.
+Added: Further, in some cases the U.S.
+Added: government is unilaterally empowered to use, or allow our competitors to use, patented technology, subject only to the obligation to pay reasonable compensation.
Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents, affiliates, subcontractors, suppliers, business partners or joint ventures in which we participate.
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Failure to timely receive permits could result in fines, suspension of production, or cessation of operations at one or more facilities.
−Removed: In addition, restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs such as higher energy costs and the passing down of carbon taxes, emission cap-and-trade programs, and renewable portfolio standards by utility companies.
+Added: In addition, restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs such as higher energy costs and the passing down of carbon taxes, emission cap-and-trade
+Added: programs, and renewable portfolio standards by utility companies.
The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse impact on our business, financial condition and results of operations.
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The size, nature and complexity of our business make us susceptible to investigations, claims, disputes, agency audits, enforcement actions, subpoenas, litigation and other legal proceedings, particularly those involving government authorities.
−Removed: From time to time, we are and may become subject to investigations, claims, disputes, enforcement actions and administrative, civil or criminal litigation, arbitration or other legal proceedings globally and across a broad array of matters, including, but not limited to, government contracts, commercial transactions, false claims, false statements, mischarging, contract performance, fraud, procurement integrity, products liability, warranty liability, the use of hazardous materials, personal injury claims, environmental matters, shareholder-derivative actions, prior acquisitions and divestitures, intellectual property, tax, employees, export/import, anti-corruption, labor, health and safety, accidents, employee benefits and plans, including plan administration, and improper payments, as well as matters relating to our acquisition of assets or companies and other matters.
+Added: From time to time, we are and may become subject to investigations, claims, disputes, enforcement actions and administrative, civil or criminal litigation, arbitration or other legal proceedings globally and across a broad array of matters, including, but not limited to, government contracts, commercial transactions, false claims, false statements, mischarging, contract performance, fraud, procurement integrity, products liability, warranty liability, the use of hazardous materials, personal injury claims, environmental matters, stockholder-derivative actions, prior acquisitions and divestitures, intellectual property, tax, employees, export/import, anti-corruption, labor, health and safety, accidents, employee benefits and plans, including plan administration, and improper payments, as well as matters relating to our acquisition of assets or companies and other matters.
These actions may divert financial and management resources that would otherwise be used to benefit our operations.
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An adverse resolution or outcome of any of these investigations, claims, disputes, enforcement actions, litigation and other legal proceedings could have an adverse impact on our business, financial condition and results of operations.
−Removed: From time to time, the Company may deem it appropriate to take legal action (or threaten to
−Removed: take such action) against a customer, supplier, former employee, subcontractor or other industry participant to protect its contractual and other legal rights.
+Added: From time to time, the Company may deem it appropriate to take legal action (or threaten to take such action) against a customer, supplier, former employee, subcontractor or other industry participant to protect its contractual and other legal rights.
The outcome of such litigation is inherently uncertain, often costly and could adversely impact the Company’s commercial relationships and reputation.
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Our international business may be impacted by changes in U.S.
−Removed: and foreign national policies and priorities, and geopolitical relationships, any of which may be influenced by changes in the threat environment, political leadership, geopolitical uncertainties, world events, acts of terrorism, bilateral and multi-lateral relationships, government budgets, and economic and political factors more generally, and any of which could impact
−Removed: funding for programs, alter export authorizations, or delay purchasing decisions or customer payments.
+Added: and foreign national policies and priorities, and geopolitical relationships, any of which may be influenced by changes in the threat environment, political leadership, geopolitical uncertainties, world events, acts of terrorism, bilateral and multi-lateral relationships, government budgets, and economic and political factors more generally, and any of which could impact funding for programs, alter export authorizations, or delay purchasing decisions or customer payments.
These changes may affect the defense spending priorities and procurement policies of foreign governments which may affect our international military sales.
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This may increase the risk to our employees, subcontractors or other third parties, and/or increase the risk of a wide range of liabilities, as well as loss of property or damage to our products.
−Removed: The ongoing conflicts in Israel and the broader Middle East region have the potential to evolve quickly creating uncertainty along with the potential for disruptions to our Israeli operations in the region
−Removed: including, but not limited to, workforce calls for duty, transportation and other logistical impacts and reduced customer confidence.
+Added: The ongoing conflicts in Israel and the broader Middle East region have the potential to evolve quickly creating uncertainty along with the potential for disruptions to our Israeli operations in the region including, but not limited to, workforce calls for duty, transportation and other logistical impacts and reduced customer confidence.
The occurrence and impact of these factors is difficult to predict, but one or more of them could negatively impact our business, financial condition and results of operations.
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The expansion into new territories requires substantial management attention and financial resources, and any setbacks encountered in these new markets could delay or impede our growth strategy.
−Removed: If we are not able to successfully manage the risks of international expansion, or our investments in these regions do not yield expected returns, our business, financial condition, and operating results may be adversely affected.
+Added: If we are not able to successfully manage the risks of
+Added: international expansion, or our investments in these regions do not yield expected returns, our business, financial condition, and operating results may be adversely affected.
We may not be successful in obtaining the export licenses necessary to conduct certain operations abroad, and Congress may prevent proposed sales to certain foreign governments.
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Additionally, some of our businesses are located in regions where competition for personnel is particularly intense.
−Removed: The rate of turnover for our technical personnel may increase in the future.
+Added: The rate of turnover for our technical personnel may
+Added: increase in the future.
Our ability to hire personnel in specific sectors may also be limited by non-disclosure or non-solicit agreements that we have entered into.
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If qualified personnel are scarce or difficult to attract or retain or if we experience a high level of attrition, generally or in particular areas, or if such personnel are unable to obtain security clearances on a timely basis, we could experience higher labor, recruiting or training costs in order to attract and retain necessary employees.
+Added: Separately, the Executive Order issued on January 7, 2026, relating to executive salaries and incentive compensation metrics applicable for defense contractors could adversely impact our ability to attract or retain executive officers.
Our business could be harmed in the event of difficulties with our unionized workforce, including the effects of a prolonged work stoppage.
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Any such expenses or delays could adversely affect our programs served by employees who are covered by such agreements or representation.
−Removed: We cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor collective bargaining agreements without impacting our financial
+Added: We cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor collective bargaining agreements without impacting our financial condition.
In addition, the presence of unions may limit our flexibility in dealing with our workforce.
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Not every risk or liability can be insured, and for risks that are insurable, the policy limits and terms of coverage reasonably obtainable in the market may not be sufficient to cover all actual losses or liabilities incurred.
−Removed: Even if insurance coverage is available, we may not be able to obtain it or renew existing coverage at a price or on terms acceptable to us.
+Added: insurance coverage is available, we may not be able to obtain it or renew existing coverage at a price or on terms acceptable to us.
Disputes with insurance carriers, including over policy terms, reservation of rights, the applicability of coverage (including exclusions), compliance with provisions (including notice) and/or the insolvency of one or more of our insurers may significantly affect the availability or timing of recovery, and may impact our ability to obtain insurance coverage at reasonable rates in the future.
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Pension and Other Postretirement Benefits to the Consolidated Financial Statements.
−Removed: The process of determining the funded status of these plans and our pension plan expense or income involves significant judgment, particularly with respect to our long-term return on pension assets and discount-rate assumptions.
+Added: The process of determining the funded status of these plans and our pension plan expense or income involves judgment, particularly with respect to our long-term return on pension assets and discount rate assumptions.
If our discount rate assumption or long-term return on assets (“ROA”) (which is used to determine the funded status of our pension plans) is decreased due to changes in our assumptions or other reasons, our pension plan funded status and expense could increase which would negatively impact our results of operations.
In addition, if our actual return on assets differs from our long-term ROA assumption, our pension plan funded status and pension expense would be impacted.
−Removed: Changes to financial accounting standards may affect our results of operations and cause us to change our business practices.
−Removed: We prepare our financial statements in accordance with U.S.
−Removed: These accounting principles are subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to interpret and create appropriate accounting policies.
−Removed: A change in these accounting standards or the questioning of current reporting practices may adversely affect our reported financial results or the way we conduct our business.
Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would adversely affect our business, financial condition and results of operations.
−Removed: As of December 31, 2024 and 2023, we had goodwill and other intangible assets, net of accumulated amortization, of $1,370 million and $1,389 million, respectively, which represented 33% and 35%, respectively, of our total assets.
+Added: As of December 31, 2025 and 2024, we had goodwill and intangible assets, net, of $1,350 million and $1,370 million, respectively, which represented 30% and 33%, respectively, of our total assets.
Our goodwill is subject to an impairment test on an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired.
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We may subsequently experience unforeseen issues with such business which adversely affect the anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the recorded goodwill and intangible assets for such business.
−Removed: Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have a negative impact on our results of operations and financial condition.
+Added: Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of intangible assets could have a negative impact on our results of operations and financial condition.
Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
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Future changes in our stock ownership, some of which are beyond our control, could result in an ownership change under Section 382 of the Tax Code.
−Removed: Furthermore, our ability to utilize NOLs of any companies that we may acquire in the future may be subject to limitations.
+Added: Furthermore, our ability to utilize NOLs of any companies that we may acquire in the
+Added: future may be subject to limitations.
For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability.
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Finally, we may be required to obtain various government approvals and/or the consent of US Holding in order to pursue certain material transactions and there is no guarantee that their consent will be granted.
−Removed: See “— Risks Relating to Our Ownership and Status under the Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions .”
+Added: See “— Risks Relating to Our Ownership and Status under the Amended and Restated
+Added: Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions .”
Pandemics, epidemics, disease outbreaks and health emergencies, such as the COVID-19 pandemic, have had, and future public health crises could have, an adverse impact on our business, financial condition and results of operations.
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Also, in the future, contamination may be found to exist at our current or former facilities or at off-site locations to which we or certain companies that we have acquired or previously owned may have sent waste, and we could be held liable for such contamination.
−Removed: The remediation of such contamination, or the enactment of more stringent laws or regulations or more strict
−Removed: interpretation of existing laws and regulations, may require us to make additional expenditures, and could decrease the amount of cash flows available to us for other purposes, including capital expenditures, R&D and other investments and could have a material adverse impact on our business, financial condition and results of operations.
+Added: The remediation of such contamination, or the enactment of more stringent laws or regulations or more strict interpretation of existing laws and regulations, may require us to make additional expenditures, and could decrease the amount of cash flows available to us for other purposes, including capital expenditures, R&D and other investments and could have a material adverse impact on our business, financial condition and results of operations.
Our leases may be terminated or we may be unable to renew our leases on acceptable terms and if we wish to relocate, we may incur additional costs if we terminate a lease.
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We believe that our future leases will likely also be long-term and non-cancellable and have similar renewal options.
−Removed: If we close or stop fully utilizing a facility, we will most likely remain obligated to perform under the applicable lease, which would include, among other things, making the base rent payments, and paying insurance, taxes and other expenses on the leased property for the remainder of the lease term.
+Added: If we close or stop fully utilizing a facility, we will most likely remain obligated to perform under the applicable lease, which would include, among other things, making the base rent payments, and paying insurance, taxes and other expenses on the leased property for the
+Added: remainder of the lease term.
Our inability to terminate a lease when we stop fully utilizing a facility could negatively impact our business, financial condition and results of operations.
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Our business may be impacted by foreign policy actions taken by governments such as tariffs, sanctions, embargoes, export and import controls and other trade restrictions, which can affect the demand for and our ability to sell our products and services, cause disruptions or cost increases to our supply chain, and ultimately adversely affect our business.
−Removed: Ongoing instability and current conflicts in global markets, including in Eastern Europe, the Middle East and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including the conflict in Ukraine, the U.S.
−Removed: military withdrawal from Afghanistan, new or increased tariffs (including recent U.S.
+Added: Ongoing instability and current conflicts in global markets, including in Central America, Eastern Europe, the Middle East and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including the conflict in Ukraine, new or increased tariffs (including recent U.S.
tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries) or sanctions and potential trade wars have created and continue to create economic and political uncertainties and impacts that could have a material adverse impact on our business, financial condition and results of operations.
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If credit in financial markets outside of the U.S.
−Removed: tightened, it could adversely affect the ability of our customers and
−Removed: suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products, systems and services or impact the ability of our customers to make payments.
+Added: tightened, it could adversely affect the ability of our customers and suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products, systems and services or impact the ability of our customers to make payments.
These matters may cause us to incur increased costs or experience difficulty with future borrowings under our credit facilities or in the debt capital markets, future issuances of common stock or other equity securities or otherwise with financing our operating, investing (including any future acquisitions) or financing activities.
These matters also may cause our insurance coverages to increase in cost, or in some cases, to be unavailable altogether.
−Removed: Risks Relating to Our Ownership and Status under the Proxy Agreement
−Removed: We operate under a proxy agreement with the DoD that regulates significant areas of our governance.
−Removed: If we fail to comply with the proxy agreement our classified U.S.
+Added: Risks Relating to Our Ownership and Status under the Amended and Restated Proxy Agreement
+Added: We operate under an amended and restated proxy agreement with the DoW that regulates significant areas of our governance.
+Added: If we fail to comply with the amended and restated proxy agreement, our classified U.S.
government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations.
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See “— Risks Relating to Our Business — We are subject to the U.S.
−Removed: government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
+Added: government’s requirements, including the DoW’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.
government .” Furthermore, the combination of the Italian state beneficially owning approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.), and the governance of Leonardo S.p.A.
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In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI through a proxy agreement.
−Removed: We have therefore entered into a proxy agreement with the DoD.
−Removed: Among other things, the proxy agreement:
+Added: We have therefore entered into an amended and
+Added: restated proxy agreement with the DoW.
+Added: Among other things, the amended and restated proxy agreement:
• provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A.
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and its subsidiaries (including US Holding and us) (subject to limited exceptions) and must maintain adequate security clearance;
−Removed: • provides that the proxy holders are appointed by our immediate majority stockholder US Holding (in consultation with Leonardo S.p.A.)., but the appointment is subject to approval of the DCSA, an agency of the DoD, and that the proxy holders must be members of our Board;
+Added: • provides that the proxy holders are appointed by our immediate majority stockholder US Holding (in consultation with Leonardo S.p.A.), but the appointment is subject to approval of the DCSA, an agency of the DoW, and that the proxy holders must be members of our Board;
• restricts our ability to share facilities and personnel with and receive certain services from Leonardo S.p.A.
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or its other subsidiaries (including US Holding).
−Removed: We are currently operating under an interim proxy agreement while we seek to enter into a new proxy agreement with the DoD.
+Added: We are currently operating under an amended and restated proxy agreement, which expires in March 2030.
The terms of any new proxy agreement or other mitigation requirements could impose heightened or new restrictions which could further impact our business operations.
Proxy agreements, including ours, typically have limited duration and need to be renewed on a regular basis.
−Removed: Compliance with the proxy agreement requires a significant commitment of resources and management and Board oversight, and the DoD may impose additional security safeguards that it believes necessary to adequately safeguard classified and controlled unclassified information, which
−Removed: could make it more difficult for us to comply with the proxy agreement or adversely impact the manner in which we operate our business.
−Removed: Under the proxy agreement we are required to prepare and submit an annual implementation and compliance report to the DCSA including detailed information with respect to the manner in which we comply with the proxy agreement including with respect to classified information, any acts of noncompliance and other matters specified by DCSA.
+Added: Compliance with the amended and restated proxy agreement requires a significant commitment of resources and management and Board oversight, and the DoW may impose additional security safeguards that it believes necessary to adequately safeguard classified and controlled unclassified information, which could make it more difficult for us to comply with such proxy agreement or adversely impact the manner in which we operate our business.
+Added: Under the amended and restated proxy agreement, we are required to prepare and submit an annual implementation and compliance report to the DCSA including detailed information with respect to the manner in which we comply with such proxy agreement including with respect to classified information, any acts of noncompliance and other matters specified by DCSA.
We are subject to regular audits of our FOCI compliance and have at times been found to not have strictly complied with our proxy agreement or relevant security requirements but have not to date been sanctioned for any such noncompliance.
−Removed: Additionally, the restrictions imposed by the proxy agreement on our communications and ability to share facilities, personnel and services with Leonardo S.p.A.
+Added: Additionally, the restrictions imposed by the amended and restated proxy agreement on our communications and ability to share facilities, personnel and services with Leonardo S.p.A.
or its other subsidiaries mean that we cannot benefit from the full range of synergies and cost savings typically enjoyed by a majority-owned subsidiary.
−Removed: In the event of a material breach of the proxy agreement or the failure of the DoD to renew a current proxy agreement upon its expiration, the DoD may (i) novate our classified contracts to a company not under FOCI at our expense, (ii) terminate our classified contracts and deny us new classified contracts, (iii) revoke our facility security clearance and/or (iv) suspend or debar us from participation in all U.S.
+Added: In the event of a material breach of the amended and restated proxy agreement or the failure of the DoW to renew the current proxy agreement upon its expiration, the DoW may (i) novate our classified contracts to a company not under FOCI at our expense, (ii) terminate our classified contracts and deny us new classified contracts, (iii) revoke our facility security clearance and/or (iv) suspend or debar us from participation in all U.S.
government contracts.
We depend on revenues from contracts and subcontracts with the U.S.
−Removed: government, including defense-related programs with the DoD and a broad range of programs with the U.S.
+Added: government, including defense-related programs with the DoW and a broad range of programs with the U.S.
Navy and U.S.
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defense spending for the vast majority of our revenues.
−Removed: Disruptions or deterioration in our relationships with the relevant agencies of the U.S.
+Added: Disruptions, including from government shutdowns, or deterioration in our relationships with the relevant agencies of the U.S.
government could have a material adverse impact on our business, financial condition and results of operations.
−Removed: ” Therefore, if we fail to comply with the terms of the proxy agreement and the DoD imposes any of the above remedies, this could have a material adverse impact on our business, financial condition and results of operations.
−Removed: See “— Risks Relating to Our Ownership and Status under the Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions .
+Added: ” Therefore, if we fail to comply with the terms of the amended and restated proxy agreement and the DoW imposes any of the above remedies, this could have a material adverse impact on our business, financial condition and results of operations.
+Added: See “— Risks Relating to Our Ownership and Status under the Amended and Restated Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict
+Added: with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions .
CFIUS may modify, delay or prevent our future acquisition or investment activities.
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Foreign-government-controlled investors may be subject to a higher level of CFIUS scrutiny than non-foreign-government-controlled investors.
−Removed: Additionally, future foreign
−Removed: investments in us could be within the jurisdiction of CFIUS and, given the nature of our business, may trigger a mandatory CFIUS notification requirement or warrant voluntary notification to CFIUS, impacting our ability to attract such investment.
+Added: Additionally, future foreign investments in us could be within the jurisdiction of CFIUS and, given the nature of our business, may trigger a mandatory CFIUS notification requirement or warrant voluntary notification to CFIUS, impacting our ability to attract such investment.
Further, CFIUS may decide to block, delay, or impose material conditions on any such future foreign investment in us that it reviews.
−Removed: Because we are deemed to be controlled by a foreign company, we are required to mitigate FOCI through our proxy agreement.
+Added: Because we are deemed to be controlled by a foreign company, we are required to mitigate FOCI through our amended and restated proxy agreement.
Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage mergers and acquisitions or change of control transactions.
−Removed: The proxy agreement provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A.
+Added: The amended and restated proxy agreement provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A.
are voted through proxy holders, who must be independent from current and prior affiliation with Leonardo S.p.A.
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In exercising their power as proxy holders, the proxy holders are directed to act to protect the legitimate economic interests of our stockholders and in a manner consistent with their fiduciary duties, but they are not generally required to follow instructions of Leonardo S.p.A., US Holding or us.
−Removed: The proxy agreement provides that the proxy holders may vote for or consent to in, their sole and absolute discretion, without consultation with US Holding or Leonardo S.p.A., the election of additional directors who are not proxy holders (and who are selected from candidates proposed by US Holding after reasonable consultation with our nominating and corporate governance committee, and subject to DCSA’s approval in certain circumstances), any changes or amendments to our certificate of incorporation or bylaws, the sale or disposal of our property, assets or business, our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets, or any other matter affecting us, other than as described below.
+Added: The amended and restated proxy agreement provides that the proxy holders may vote for or consent to in, their sole and absolute discretion, without consultation with US Holding or Leonardo S.p.A., the election of additional directors who are not proxy holders (and who are selected from candidates proposed by US Holding after reasonable consultation with our nominating and corporate governance
+Added: committee, and subject to DCSA’s approval in certain circumstances), any changes or amendments to our certificate of incorporation or bylaws, the sale or disposal of our property, assets or business, our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets, or any other matter affecting us, other than as described below.
However, the proxy holders may only vote for or consent to the following matters with the express written approval of US Holding:
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In addition, the proxy holders may only vote to declare or suspend dividends after prior consultation with US Holding.
−Removed: At all times subject to the proxy agreement, on November 28, 2022, the Company entered into the Registration Rights Agreement as well as the Cooperation Agreement with Leonardo S.p.A and US Holding.
+Added: On November 28, 2022, the Company entered into the Registration Rights Agreement and on June 18, 2025, the Amended and Restated Cooperation Agreement with Leonardo S.p.A and US Holding, which are both subject to the amended and restated proxy agreement.
The Registration Rights Agreement, among other things, provides Leonardo S.p.A.
2 unchanged sentences
The requirements of the Registration Rights Agreement may burden management attention and resources.
−Removed: The Cooperation Agreement, among other things, provides (a) Leonardo S.p.A.
+Added: The Amended and Restated Cooperation Agreement, among other things, provides (a) Leonardo S.p.A.
with certain consent, access and cooperation rights, (b) US Holding with certain consent rights with respect to actions taken by the Company and its subsidiaries, including with respect to the creation or issuance of any new classes or series of stock (subject to customary exceptions), listing or delisting from any securities exchange, and making material changes to the Company’s accounting policies and changing the Company’s auditor, and (c) neither US Holding nor Leonardo S.p.A.
−Removed: with the ability to transfer any Company voting securities for a period of six months following the merger with RADA, except in connection with a change in control of the Company or for transfers to affiliates.
+Added: with the ability to transfer any Company voting securities for a period of six months following the merger with RADA Electronic Industries Ltd., except in connection with a change in control of the Company or for transfers to affiliates.
Conflicts of interest may arise between our majority stockholder and us.
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or its affiliates could pursue business interests that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have a material relationship.
−Removed: Conflicts of interest could also arise with respect to business opportunities that could be advantageous to Leonardo S.p.A., and they may pursue acquisition opportunities that may be complementary to our business.
+Added: Conflicts of interest could also arise with respect to business
+Added: opportunities that could be advantageous to Leonardo S.p.A., and they may pursue acquisition opportunities that may be complementary to our business.
As a result, those acquisition opportunities may not be available to us.
−Removed: Under the terms of our amended and restated certificate of incorporation, neither Leonardo S.p.A.
+Added: Under the terms of our third amended and restated certificate of incorporation, neither Leonardo S.p.A.
nor US Holding have an obligation to offer us corporate opportunities.
3 unchanged sentences
and the proxy holders will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.
−Removed: This influence, including the requirement in our proxy agreement for approval by the proxy holders and our majority stockholder of mergers and consolidations, may also discourage change of control transactions.
+Added: This influence, including the requirement in our amended and restated proxy agreement for approval by the proxy holders and our majority stockholder of mergers and consolidations, may also discourage change of control transactions.
Changes in the leadership at our indirect majority stockholder could create uncertainty and potentially exacerbate these risks.
−Removed: Our amended and restated certificate of incorporation provides that we waive any interest or expectancy in corporate opportunities presented to Leonardo S.p.A.
−Removed: Our amended and restated certificate of incorporation provides that we, on our behalf and on behalf of our subsidiaries, renounce and waive any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities that are from time to time presented to Leonardo S.p.A., or its officers, directors, agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, even if the opportunity is one that we or our subsidiaries might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so.
+Added: Our third amended and restated certificate of incorporation provides that we waive any interest or expectancy in corporate opportunities presented to Leonardo S.p.A.
+Added: Our third amended and restated certificate of incorporation provides that we, on our behalf and on behalf of our subsidiaries, renounce and waive any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities that are from time to time presented to Leonardo S.p.A., or its officers, directors, agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, even if the opportunity is one that we or our subsidiaries might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so.
None of Leonardo S.p.A.
or its agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty by reason of the fact that such person pursues, acquires or participates in such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries.
−Removed: To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders will be deemed to have notice of and
−Removed: consented to this provision of our amended and restated certificate of incorporation.
+Added: To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders will be deemed to have notice of and consented to this provision of our third amended and restated certificate of incorporation.
This will allow Leonardo S.p.A.
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Although we operate largely independently from Leonardo S.p.A.
−Removed: and the proxy agreement contains limitations on services that we may provide to and receive from Leonardo S.p.A.
+Added: and the amended and restated proxy agreement contains limitations on services that we may provide to and receive from Leonardo S.p.A.
and its affiliates, we have historically provided, and expect to continue to provide, certain services to Leonardo S.p.A.
and its affiliates to support its U.S.
−Removed: operations (aside from us) and have historically received and expect to continue to receive certain services from Leonardo S.p.A., including services related to group training support, subject in all cases to the proxy agreement.
+Added: operations (aside from us) and have historically received and expect to continue to receive certain services from Leonardo S.p.A., including services related to group training support, subject in all cases to the amended and restated proxy agreement.
We continue to provide or procure certain services to or from Leonardo S.p.A.
4 unchanged sentences
and its affiliates with services in support of its U.S.
−Removed: operations (aside from us), including services related to tax, financial and accounting support, legal support, trade compliance, marketing and, communications on an arm’s-length basis.
+Added: operations (aside from us), including services related to tax,
+Added: financial and accounting support, legal support, trade compliance, marketing and, communications on an arm’s-length basis.
Under the tax allocation agreement, we are responsible for administering certain U.S.
11 unchanged sentences
There can be no assurance that we will continue to pay or increase our dividend or to repurchase shares of our common stock.
−Removed: Additionally, there can be no assurance that we will not accelerate our dividend or repurchase of our common stock.
−Removed: Cash dividend payments and share repurchases are subject to limitations under applicable laws and the discretion of our Board of Directors and are determined after considering then-existing conditions, including earnings, other operating results and capital requirements and cash deployment alternatives.
+Added: Additionally, there can be no assurance that we will not accelerate our dividend or repurchases of our common stock.
+Added: Cash dividend payments and share repurchases are subject to limitations under applicable laws and the discretion of our Board and are determined after considering then-existing conditions, including earnings, other operating results and capital requirements and cash deployment alternatives.
Additionally, the declaration of a cash dividend payment is contingent upon consent by our indirect majority stockholder.
−Removed: The timing and amount of share repurchases under Board of Directors approved share repurchase plans may differ from stated expectations and is within the discretion of management and will depend on many factors, including our ability to generate sufficient cash flows from operations in the future or to borrow money from available financing sources, our results of operations, capital requirements and applicable law.
+Added: The timing and amount of share repurchases under Board approved share repurchase plans may differ from stated expectations and is within the discretion of management and will depend on many factors, including our ability to generate sufficient cash flows from operations in the future or to borrow money from available financing sources, our results of operations, capital requirements and applicable law and the applicability of presidential executive orders.
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.