Redwire (RDW) risk factors, 2025 10-K

Risks Relating to the Company’s Business and Industry

1. 01Our results could be affected by continued economic uncertainty, an economic slowdown or a recession
2. 02We regularly maintain cash balances with financial institutions in excess of the FDIC insurance limit. A failure of a depository institution to return deposits could impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance
3. 03We have limited operating history in an evolving industry and a history of losses to date, which makes it difficult to forecast our revenue, plan our expenses and evaluate our business and future prospects
4. 04As part of growing our business, we have made and may continue to make acquisitions. Any acquisitions, partnerships or joint ventures into which we enter could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations
5. 05Our ability to grow our business depends on the successful development and continued refinement of many of our proprietary technologies, products, and service offerings, which are subject to many uncertainties, some of which are beyond our control
6. 06Competition from existing or new companies could cause us to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share
7. 07A limited number of customers make up a high percentage of our revenue. If we cannot maintain these relationships, our future operating results will be adversely affected
8. 08Natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business
9. 09Adverse publicity stemming from any incident or perceived risk involving us, our customers, users of our products and services, other operators in the space sector or our competitors could have a material adverse effect on our business, financial condition and results of operations
10. 10Our business involves significant risks and uncertainties that may not be covered by insurance or indemnity
11. 11If we fail to respond to commercial industry cycles in terms of our cost structure, manufacturing capacity, and/or personnel needs, our business could be seriously harmed
12. 12Any delays in the development, design, engineering and manufacturing of our core offerings may adversely impact our business, financial condition and results of operations
13. 13Unsatisfactory performance of our core offerings could have a material adverse effect on our business, financial condition and results of operation
14. 14Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts. Our profits may decrease and/or we may incur significant unanticipated costs if we do not accurately estimate the costs of these engagements
15. 15Our cash flow and profitability could be reduced if expenditures are incurred prior to the final receipt of a contract
16. 16We may in the future invest significant resources in developing new offerings and exploring the application of our technologies for other uses and those opportunities may never materialize
17. 17We may not be able to convert our orders in backlog into revenue
18. 18We may use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations
19. 19We are dependent on third-party launch vehicles to launch our spacecraft and customer payloads into space
20. 20We may experience a total loss of our technology and products and our customers’ payloads if there is an accident on launch or during the journey into space
21. 21Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
22. 22The individual or cumulative effects of factors discussed above could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful
23. 23Our margins and operating results may suffer if we experience unfavorable changes in the proportion of cost-plus-fee or fixed-price contracts in our total contract mix
24. 24Our systems, products, technologies and services and related equipment may have shorter useful lives than we anticipate
25. 25Cyber-attacks and other security threats and disruptions could have a material adverse effect on our business
26. 26We are highly dependent on the services of our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy
27. 27Our business, financial condition and results of operations are subject to risks resulting from broader geographic operations
28. 28Net earnings and net assets could be materially affected by an impairment of goodwill
29. 29Pension funding and costs are dependent on several economic assumptions which, if changed, may cause our future results of operations and cash flows to fluctuate significantly over time
30. 30The Company’s ability to use its net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Government Contracts

1. 31We are subject to the requirements of the National Industrial Security Program Operating Manual (“NISPOM”) for our facility security clearance, which is a prerequisite to our ability to perform on classified contracts for the U.S. government
2. 32Disputes with our subcontractors or the inability of our subcontractors to perform, or our key suppliers to timely deliver our components, parts or services, could cause our core offerings to be produced or delivered in an untimely or unsatisfactory manner
3. 33Our business is subject to a wide variety of additional extensive and evolving government laws and regulations. Failure to comply with such laws and regulations could have a material adverse effect on our business
4. 34Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners
5. 35We are subject to environmental regulation and may incur substantial costs
6. 36Changes in tax laws or regulations may increase tax uncertainty and adversely affect results of our operations and our effective tax rate
7. 37Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes, which could harm our results of operations
8. 38If we cannot successfully protect our intellectual property, our business could suffer
9. 39Our technology may violate the proprietary rights of third parties, which could have a negative impact on our operations

Risks Related to Financing and Ownership of our Securities

1. 40We have a substantial amount of debt. Our ability to operate is limited by the agreements governing our debt
2. 41We may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all
3. 42The issuance and sale of shares of our Series A Convertible Preferred Stock has reduced the relative voting power of holders of our common stock and diluted the ownership of holders of our capital stock
4. 43AEI and Bain Capital have significant influence over us, which could limit other investors’ ability to influence the outcome of key transactions
5. 44Provisions in our Certificate of Designation (the “Certificate of Designation”) may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock
6. 45Our Series A Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to, the rights of holders of our other outstanding capital stock
7. 46There may be sales of a substantial amount of our common stock by our current shareholders, and these sales could cause the price of our common stock to fall

Risks Related to Being a Public Company

1. 47We may not be able to remain in compliance with the continued listing requirements of the NYSE, and if the NYSE delists our common stock, it would have an adverse impact on the trading, liquidity and market price of our common stock
2. 48We may issue additional common stock or other equity securities which could dilute our shareholders’ ownership interests
3. 49A market for our common stock may not be sustained and the market price of our common stock and warrants has and may continue to fluctuate due to numerous circumstances beyond our control
4. 50We do not anticipate paying dividends on our common stock for the foreseeable future
5. 51A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis
6. 52These material weaknesses could result in misstatements of substantially all accounts and disclosures that could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected
7. 53We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the deficiencies that led to the material weaknesses, including training, designing and implementing new control activities, and enhancing existing control activities