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What changed in Redwire Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Redwire Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+282 added−329 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-20)

Top changes in Redwire Corp's 2024 10-K

282 paragraphs added · 329 removed · 220 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+18 added−8 removed49 unchanged
Biggest changeCertain aspects of our manufacturing activities require relatively scarce raw materials; occasionally, we have experienced difficulty in our ability to procure raw materials, components, sub-assemblies and other supplies required in our manufacturing process. Regulatory Federal Communications Commission The regulations, policies and guidance issued by the Federal Communications Commission (“FCC”) apply to the operation of our spacecraft.
Biggest changeRaw Materials and Suppliers In manufacturing our products, we use our own production capabilities as well as a base of third-party suppliers and subcontractors. Certain aspects of our manufacturing activities require relatively scarce raw materials; occasionally, we have experienced difficulty in our ability to procure raw materials, components, sub-assemblies and other supplies required in our manufacturing process.
Individuals from all backgrounds, experiences and skill sets are needed to make Redwire successful. We value each other. • Excellence: We are focused professionals who are committed to delivering results. Recruitment We have an experienced talent acquisition team and our recruitment efforts are focused on hiring diverse space-industry experienced talent who are attracted to Redwire’s core values.
Individuals from all backgrounds, experiences and skill sets are needed to make Redwire successful. We value each other. • Excellence: We are focused professionals who are committed to delivering results. We have an experienced talent acquisition team and our recruitment efforts are focused on hiring space-industry experienced talent who are attracted to Redwire’s core values.
Redwire has three primary areas of focus that form our business: (1) Enabling space mission providers, such as government agencies and large prime contractors, with a broad portfolio of space infrastructure, systems, subsystems, and components; (2) Providing the infrastructure and technology needed for people to explore, live and work in space; and (3) Assisting international spacefaring allies in the development of organic space capabilities.
Redwire has three primary areas of focus that form our business: (1) Enabling space mission providers, such as government agencies and large prime contractors, with a broad portfolio of space defense and civil infrastructure, systems, subsystems, and components; (2) Providing the infrastructure and technology needed for people to explore, live and work in space; and (3) Assisting international spacefaring allies in the development of organic space capabilities.
In addition, some of our foreign competitors currently benefit from, and others may benefit in the future from, protective measures by their home countries where governments are providing financial support, including significant investments in the development of new technologies. Government support of this nature greatly reduces the commercial risks associated with aerospace technology development activities for these competitors.
In addition, some of our foreign competitors currently benefit from, and others may benefit in the future from, protective measures by their home countries where governments are providing financial support, including significant investments in the development of new Page 9 technologies. Government support of this nature greatly reduces the commercial risks associated with aerospace technology development activities for these competitors.
We frequently “partner” or are involved in subcontracting and teaming relationships with companies that are, from time to time, competitors on other programs. We compete domestically and internationally against space systems components providers, including Moog Inc., Space Micro Inc., Rocket Lab USA, Inc. (a segment of Rocket Labs), and in some instances against large companies such as Northrup Grumman.
We frequently “partner” or are involved in subcontracting and teaming relationships with companies that are, from time to time, competitors on other programs. We compete domestically and internationally against space systems components providers, including Moog Inc., Space Micro Inc., Rocket Lab USA, Inc. (a segment of Rocket Labs), and in some instances against large companies such as Northrop Grumman.
Page 9 We are committed to technical excellence and mission success which is reinforced by our core values: • Integrity: We stand for honesty, fairness, and commitment in all that we do, and an uncompromising adherence to ethical behavior. • Innovation: We are change agents. We find new ways to solve our customers’ most challenging problems.
We are committed to technical excellence and mission success which is reinforced by our core values: • Integrity: We stand for honesty, fairness, and commitment in all that we do, and an uncompromising adherence to ethical behavior. • Innovation: We are change agents. We find new ways to solve our customers’ most challenging problems.
As a result of these relationships, we participate in numerous large, high-profile contracts, Page 7 such as the Artemis program, where Redwire is contracted to provide the Solar Arrays for the Lunar Orbiting Power and Propulsion Element. When deployed, these solar arrays will be one of the largest ever built.
As a result of these relationships, we participate in numerous large, high-profile contracts, such as the Artemis program, where Redwire is contracted to provide the Solar Arrays for the Lunar Orbiting Power and Propulsion Element. When deployed, these solar arrays will be one of the largest ever built.
We have completed nine acquisitions since March 2020, which collectively have provided us with a broad portfolio of complementary technologies and solutions to serve our target markets and customers. These acquisitions include: • 2020 – Acquired Redwire Space Components, LLC (f/k/a Adcole Space, LLC), Redwire Space Sensors, Inc.
We have completed ten acquisitions since March 2020, which collectively have provided us with a broad portfolio of complementary technologies and solutions to serve our target markets and customers. These acquisitions include: • 2020 – Acquired Redwire Space Components, LLC (f/k/a Adcole Space, LLC), Redwire Space Sensors, Inc.
As space becomes an increasingly contested domain and near peer threats continue to emerge, the U.S. and other nations have articulated a need for significant investment in both improving the resiliency of existing space assets and the deployment of new, next-generation capabilities.
As space becomes an increasingly contested domain and near peer threats continue to emerge, Page 8 the U.S. and other nations have articulated a need for significant investment in both improving the resiliency of existing space assets and the deployment of new, next-generation capabilities.
These missions included our power generation hardware on the International Space Station (“ISS”), NASA’s Imaging X-ray Polarimetry Explorer (“IXPE”) mission, and NASA’s DART mission. Structures and Mechanisms Spacecraft requires lightweight rigid and strong structures to support various internal and external components and sensors.
These missions included our power generation hardware on the International Space Station (“ISS”), NASA’s Imaging X-ray Polarimetry Explorer (“IXPE”) mission, and NASA’s DART mission. Page 6 Structures and Mechanisms Spacecraft requires lightweight rigid and strong structures to support various internal and external components and sensors.
International Traffic in Arms Regulations and Export Controls Our orbital infrastructure business is subject to, and we must comply with, stringent U.S. and international import and export control laws, including the International Traffic in Arms Regulations (“ITAR”), Export Administration Regulations (“EAR”) of the Bureau of Industry and Security of the U.S.
Page 10 International Traffic in Arms Regulations and Export Controls Our orbital infrastructure business is subject to, and we must comply with, stringent U.S. and international import and export control laws, including the International Traffic in Arms Regulations (“ITAR”), Export Administration Regulations (“EAR”) of the Bureau of Industry and Security of the U.S.
Our core space infrastructure offerings include a broad array of modern products and services, which have been enabling space missions since the 1960s and have been flight-proven on over 200 spaceflight missions, including missions such as the National Aeronautics and Space Administration’s (“NASA”) Artemis program, New Horizons and Perseverance, the Space Force’s GPS, and the European Page 3 Space Agency’s (“ESA”) Project for On-Board Autonomy (“PROBA”) programs.
Our core space infrastructure offerings include a broad array of modern products and services, which have been enabling space missions since the 1960s and have been flight-proven on over 200 spaceflight missions, including missions such as the National Aeronautics and Space Administration’s (“NASA”) Artemis, New Horizons and Perseverance programs, the Space Force’s GPS, and the European Space Agency’s (“ESA”) Project for On-Board Autonomy (“PROBA”) programs.
Redwire provides a comprehensive range of sensors, including star trackers and sun sensors, critical for accurate navigation and control of spacecraft. These sensors leverage advanced algorithms for precise mapping of star positions relative to spacecraft, an essential element in modern space navigation.
Redwire provides a comprehensive range of sensors, including star trackers and sun sensors, which are critical for accurate navigation and control of spacecraft. These sensors leverage advanced algorithms for precise mapping of star positions relative to spacecraft, an essential element in modern space navigation.
Redwire has participated in ESA’s small satellite missions, such as PROBA-1 and PROBA-V.
Redwire has participated in ESA’s small satellite missions, such as PROBA-1, PROBA-3 and PROBA-V.
Products and Solutions Avionics and Sensors Satellites that go into orbit generally require sensors and avionics systems and Redwire has developed advanced capabilities in these critical subsectors of the space supply chain with more than 50 years of heritage in manufacturing space-qualified sensors. We provide a variety of space-qualified sensors and advanced avionics systems.
Page 5 Products and Solutions Avionics, Sensors and Payloads Satellites that go into orbit generally require sensors and avionics systems. Redwire has developed advanced capabilities in these critical subsectors of the space supply chain with more than 50 years of heritage in manufacturing space-qualified sensors. We provide a variety of space-qualified sensors and advanced avionics systems.
These structures and mechanisms are often required to deploy a payload, such as an antenna, science instrument or camera to a precise Page 5 position to complete the mission.
These structures and mechanisms are often required to deploy a payload, such as an antenna, science instrument or camera to a precise position to complete the mission.
Redwire’s primary business model is to provide mission critical solutions based on core space infrastructure offerings for government and commercial customers through long-duration projects. These core offerings include leading technologies and production capability for avionics and sensors; power generation; structure and mechanisms; radio frequency (“RF”) systems; platforms, payloads and missions; and microgravity payloads.
Redwire’s primary business model is to provide mission critical solutions based on core space infrastructure offerings for government and commercial customers through long-duration projects. These core offerings include leading technologies and production capability for mission solutions including: avionics, sensors and payloads; power generation; structures and mechanisms; radio frequency (“RF”) systems; spacecraft platforms and missions; and microgravity payloads.
There are currently eight active payload facilities built by Redwire on the ISS as of December 31, 2023. Commercial Community Relationships Through our numerous strategic partnerships with large and high-profile commercial customers, we believe that our core space infrastructure offerings are enabling the commercialization of LEO and potentially beyond.
There are currently eleven active payload facilities built by Redwire on the ISS as of December 31, 2024. Commercial Community Relationships Through our numerous strategic partnerships with large and high-profile commercial customers, we believe that our core space infrastructure offerings are enabling the commercialization of LEO and potentially beyond.
Power Generation Power generation is critical for space endeavors. Redwire offers a variety of solar array solutions for spacecraft spanning the spectrum of size, power needs, and orbital location. We possess proprietary technologies, technical know-how, and the facilities to design, build, and deliver competitive power generation solutions tailored to customer need.
Redwire offers a variety of solar array solutions for spacecraft spanning the spectrum of size, power needs, and orbital location. We possess proprietary technologies, technical know-how, and the facilities to design, build, and deliver competitive power generation solutions tailored to customer need.
Redwire produces constellation dispenser systems that consist of payload adapting structures, the integrated structural systems that support multiple satellites of different sizes across multiple launch vehicle platforms, and separation systems that deploy or dispense satellites off the launch vehicle.
Redwire produces constellation dispenser systems that consist of payload adapters, the integrated structural systems that support multiple satellites of different sizes across multiple launch vehicle platforms, and separation systems that deploy or dispense satellites off the launch vehicle.
As of December 31, 2023, the Company operated in one operating segment and one reportable segment: space infrastructure. Refer to Note B – Summary of Significant Accounting Policies of the accompanying notes to the consolidated financial statements for additional information regarding this conclusion.
As of December 31, 2024, the Company operated in one operating segment and one reportable segment: space infrastructure. Refer to Note B – Summary of Significant Accounting Policies and Note W – Segment Reporting of the accompanying notes to the consolidated financial statements for additional information regarding this conclusion.
The regulations exist to advance the national security and foreign policy interests of the U.S. and EU, as applicable. Human Capital We strive to be the employer of choice in the space community. As of December 31, 2023, we had approximately 700 employees based in the U.S. and Europe.
The regulations exist to advance the national security and foreign policy interests of the U.S. and EU, as applicable. Human Capital We strive to be the employer of choice in the space community. As of December 31, 2024, we had approximately 750 employees based in the U.S. and Europe.
Redwire’s payload adapting structure solutions are based on heritage products that have flown over multiple decades, and have delivered over 300 pieces of flight hardware over the last 7 years.
Redwire’s payload adapter solutions are based on heritage products that have flown over multiple decades, and have delivered over 300 pieces of flight hardware over the last 7 years.
(f/k/a Deep Space Systems, Inc.), In Space Group, Inc. and its subsidiaries, Redwire Space, Inc. (f/k/a Made In Space, Inc.) and Made in Space Europe S.a.r.l (collectively “MIS”), Redwire Space Solutions, LLC (f/k/a Roccor, LLC), and LoadPath, LLC. • 2021 – Acquired Oakman Aerospace, LLC, Redwire Space Enterprises, Inc. (f/k/a Deployable Space Systems, Inc.), and Redwire Space Technologies, Inc.
(f/k/a Deep Space Systems, Inc.), In Space Group, Inc. and its subsidiaries, Redwire Space, Inc. (f/k/a Made In Space, Inc.) and Made in Space Europe S.a.r.l (collectively “MIS”), Redwire Space Solutions, LLC (f/k/a Roccor, LLC), and LoadPath, LLC. Page 4 • 2021 – Acquired Oakman Aerospace, LLC, Redwire Space Enterprises, Inc.
With our core space infrastructure offerings, Redwire is a leading innovator in space infrastructure, enabling space mission providers with the foundational building blocks and integrated solutions needed for complex space missions. Space infrastructure is critical to our terrestrial economy in areas, such as national security, telecommunications, navigation and timing, and Earth observation.
With our core space infrastructure offerings, Redwire is a leading innovator in space infrastructure, enabling space mission providers with the foundational building blocks and integrated solutions needed for complex space missions. Redwire is developing critical space infrastructure that is impacting our terrestrial economy in areas, such as national security, global defense, telecommunications, navigation and timing, and Earth observation.
Looking forward, we expect to continue our investment in fields we believe offer the greatest opportunities for long-term growth and profitability. We conduct research and development principally in the U.S. and Belgium. Research and development expenses were $5.0 million for the year ended December 31, 2023.
Looking forward, we expect to continue our investment in fields we believe offer the greatest opportunities for long-term growth and profitability. We conduct research and development principally in the U.S. and Belgium. Research and development expenses were $6.1 million for the year ended December 31, 2024.
Page 8 Intellectual Property We own a substantial intellectual property portfolio that includes many U.S. and foreign patents, as well as many U.S. trademarks, domain names and copyrights. We actively pursue internal development of intellectual property. In addition to our patent portfolio, we own other intellectual property such as unpatented trade secrets, know-how, data and software.
Intellectual Property We own a substantial intellectual property portfolio that includes many U.S. and foreign patents, as well as many U.S. trademarks, domain names and copyrights. We actively pursue internal development of intellectual property. In addition to our patent portfolio, we own other intellectual property such as unpatented trade secrets, subject matter expertise, data and software.
The microgravity environment enables certain products and materials to be created with properties superior to comparable products manufactured on Earth. These products and materials include the production of pharmaceutical seed crystals used for drug development processes as pharmaceutical companies look to deliver new, optimized treatments for patients on Earth.
The microgravity environment enables certain products and materials to be manufactured with space-enhanced properties that are not comparable to products manufactured on Earth. These products and materials include the production of pharmaceutical seed crystals used for drug development processes as pharmaceutical companies look to deliver new, optimized treatments for patients on Earth.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Seasonality No material portion of our business is considered to be seasonal. Various factors can affect the distribution of our revenue between accounting periods, including the timing of contract awards and the timing and availability of customer funding, as well as the timing of product deliveries and customer acceptance.
Seasonality No material portion of our business is considered to be seasonal. Various factors can affect the distribution of our revenue between accounting periods, including the timing of contract awards and the timing and availability of customer funding, as well as the timing of product deliveries and customer acceptance.
Redwire provides the P200 small satellite platform which is capable of supporting payloads up to 70 kg and targets spacecraft mass less than 200 kg, making it compatible with typical shared launch opportunities and small satellite launchers.
Redwire also provides the EU based LEO Hammerhead, a small satellite platform which is capable of supporting payloads up to 70 kg and targets spacecraft mass less than 200 kg, making it compatible with typical shared launch opportunities and small satellite launchers.
Our technology innovation is centered on the following core space infrastructure offerings: • Avionics and Sensors; Page 4 • Power Generation; • Structures and Mechanisms; • Radio Frequency Systems; • Platforms, Payloads and Missions; and • Microgravity Payloads.
Our technology innovation is centered on the following core space infrastructure offerings: • Avionics, Sensors and Payloads; • Power Generation; • Structures and Mechanisms; • RF Systems; • Spacecraft Platforms and Missions; and • Microgravity Payloads.
Redwire created a commercial manufacturing platform to operate in LEO, the Additive Manufacturing Facility (“AMF”). AMF was developed based on a desire for on-demand local manufacturing and has already printed over 200 objects in space. Redwire is currently building an in-space 3D printer, FabLab, capable of manufacturing electronics and equipment of myriad materials, including aerospace-grade titanium.
AMF was developed based on a desire for on-demand local manufacturing and has already printed over 200 objects in space. Redwire is currently building an in-space 3D printer, FabLab, capable of manufacturing electronics and equipment of myriad materials, including aerospace-grade titanium.
As we continue to grow, we are increasing our recruiting capacity by utilizing artificial intelligence (“AI”) sourcing tools, and enhancing internal incentives for recruitment. Diversity and Inclusion Redwire is committed to recruiting, retaining and promoting a diverse workforce.
As we continue to grow, we are increasing our recruiting capacity by utilizing artificial intelligence (“AI”) sourcing tools, and enhancing internal incentives for recruitment. Redwire is committed to recruiting, retaining and promoting a high-performing workforce. We strive to offer competitive salaries and benefits.
We have also invested in a RF testing capability that was custom tailored to the specific needs of small satellite communications and sensor payloads in proliferated LEO.
These systems support a variety of satellite applications, including encrypted tactical communications, signal detection and positioning. We have also invested in a RF testing capability that was custom tailored to the specific needs of small satellite communications and sensor payloads in proliferated LEO.
As of December 31, 2023, our total contracted backlog was $372.8 million. Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). For further information, refer to “Backlog” in Item 7.
Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). For further information, refer to “Backlog” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
Redwire has successfully 3D printed a meniscus in space with its BioFabrication Facility (“BFF”) aboard the ISS. Other Redwire biotechnologies beneficial to regenerative medicine include the company’s Advanced Space Experiment Processor, which, along with the BFF, can manufacture small tissue samples in space called organoids, which are utilized by pharmaceutical companies to test the safety and efficacy of novel drug.
Other Redwire biotechnologies beneficial to regenerative medicine include the company’s Advanced Space Experiment Processor, which, along with the BFF, can manufacture small tissue samples in space called organoids, which are utilized by pharmaceutical companies to test the safety and efficacy of novel drugs. Redwire created a commercial manufacturing platform to operate in LEO, the Additive Manufacturing Facility (“AMF”).
(f/k/a Techshot, Inc.). • 2022 – Acquired Redwire Space NV (f/k/a Qinetiq Space NV), (“Space NV”). On September 2, 2021, the Merger (the “Merger”) with Genesis Park Acquisition Corp.
(f/k/a Deployable Space Systems, Inc.), and Redwire Space Technologies, Inc. (f/k/a Techshot, Inc.). • 2022 – Acquired Redwire Space NV (f/k/a Qinetiq Space NV), (“Space NV”). • 2024 – Acquired Hera Systems, Inc. (“Hera Systems”) and formed Redwire Poland sp. z.o.o. On September 2, 2021, the Merger (the “Merger”) with Genesis Park Acquisition Corp.
Redwire has a proprietary enterprise software suite that enables digital engineering and generation of high-fidelity, interactive modeling and simulations of individual components, entire spacecraft and full constellations in a cloud-based environment.
Redwire leverages high-fidelity digital engineering tools and model-based systems engineering to produce end-to-end virtual environments that decrease cost, increase speed to market, and enable mission optimization. Redwire has a proprietary enterprise software suite that enables digital engineering and generation of high-fidelity, interactive modeling and simulations of individual components, entire spacecraft and full constellations in a cloud-based environment.
Our IBDM is fully aligned with the international docking system standard and can be used for autonomous docking of crewed vehicles, cargo vehicles station modules as well as resource transfer through automated umbilical mating. Radio Frequency Systems Radio frequency communications are required on spacecraft for safe operation and providing communications or delivering other products, such as imagery to the user.
Our IBDM is fully aligned with the international docking system standard and can be used for autonomous docking of crewed vehicles, cargo vehicles station modules as well as resource transfer through automated umbilical mating.
Redwire preforms either directly or through large prime contractors for many U.S. national security agencies, including but not limited to, the U.S. Air Force, U.S. Space Force, Defense Advanced Research Projects Agency (“DARPA”) and the National Reconnaissance Office (“NRO”).
Redwire preforms either directly or through large prime contractors for many U.S. national security agencies, including but not limited to, the U.S. Air Force, U.S. Space Force, DARPA and the National Reconnaissance Office (“NRO”). An increasing number of these projects are focused on high volume delivery of products to meet the need for space asset proliferation.
The AST office predominantly processes launch license requests submitted by launch vehicle operators, which include information on the constituent payloads flying on any given mission. As a result, reviews of our payloads by AST will occur during, for example, the processing of a launch vehicle provider launch license.
As a result, reviews of our payloads by AST will occur during, for example, the processing of a launch vehicle provider launch license.
The Redwire Pharmaceutical In-space Laboratory – Bio-crystal Optimization eXperiment (“PIL-BOX”) payload offers pharmaceutical companies and researchers access to leverage the microgravity environment to grow crystals of protein-based pharmaceuticals and other key molecules. Redwire’s in-space biotechnology manufacturing includes the in-space bioprinting of biostructures and tissues.
The Redwire Pharmaceutical In-space Laboratory – Bio-crystal Optimization eXperiment (“PIL-BOX”) payload offers pharmaceutical companies and researchers access to leverage the microgravity environment to grow crystals of protein-based pharmaceuticals and other key molecules. Redwire has launched 28 PIL-BOXes for our partners, including, but not limited to, Bristol Myers Squibb, Eli Lilly, and ExesaLibero Pharma.
We view the commercial market opportunity as one with significant growth possibilities as launch costs continue to decrease, making industrial and other commercial pursuits increasingly viable. Customer Concentration The majority of the Company’s revenues are derived from government contracts.
We view the commercial market opportunity as one with significant growth possibilities as launch costs continue to decrease, making industrial and other commercial pursuits increasingly viable. Customer Concentration Refer to Note Q – Revenues of the accompanying notes to the consolidated financial statements for further information on sales by major customers and location.
Redwire’s microgravity payloads are developing next-generation capabilities and services that benefit from microgravity environments or are required to develop space infrastructure. This includes space-based biotechnology applications, space plant and animal science, in-space additive manufacturing, Page 6 in-space advanced material manufacturing and support of human exploration and habitation.
Microgravity Payloads Microgravity provides unique conditions for scientific exploration which cannot be replicated on Earth. Redwire’s microgravity payloads are enabling next-generation capabilities and services which includes space-based biotechnology applications, plant and animal science, in-space additive manufacturing, in-space advanced material manufacturing and support of human exploration and habitation.
These antennas are also being used for the first generation of a national security satellite constellation in LEO. Our Link-16 antenna, among others, are critical to U.S. commercial and defense applications with special niche applications focused on serving environments that have historically been difficult to close beyond line-of-sight links.
Our Link-16 antenna, among others, are critical to U.S. commercial and defense applications with special niche applications focused on serving environments that have historically been difficult to close beyond line-of-sight links. Spacecraft Platforms and Missions Digital engineering facilitates the modeling and simulation of prospective space architectures to support trade analysis, operational concepts, and testing.
An increasing number of these projects are focused on high volume delivery of products to meet the need for space asset proliferation. These relationships are characterized and maintained by mission success as measured by on-orbit performance and project delivery performance requirements and schedule.
These relationships are characterized and maintained by mission success as measured by on-orbit performance and project delivery performance requirements and schedule.
When we communicate with our spacecraft using any part of the electromagnetic spectrum, we are operating a space station to which FCC regulations apply. Operators of regulated space stations are required to hold and maintain compliance with proper licenses throughout the duration of any given mission.
Regulatory Federal Communications Commission The regulations, policies and guidance issued by the Federal Communications Commission (“FCC”) apply to the operation of our spacecraft. When we communicate with our spacecraft using any part of the electromagnetic spectrum, we are operating a space station to which FCC regulations apply.
The P200 platform is an evolution of the PROBA platform which has acquired extensive flight heritage, accumulating more than 25 years in orbit without failure on any of the launched satellites. We are leading small satellite pioneering research missions like PROBA-1, ESA’s small satellite with fully autonomous capabilities and PROBA-V, ESA’s operational Earth observation mission based on a small satellite.
The Hammerhead platform is an evolution of the PROBA platform, which has acquired extensive flight heritage, accumulating more than 25 years in orbit without failure on any of the launched satellites.
In support of NASA’s Artemis program, we are also engaged in lunar research related to communications and navigation solutions as well as in-situ resource utilization. These developments aim to aid in establishing long-term infrastructure to sustain humans on the moon. Backlog We view growth in backlog as a key measure of our business growth.
These developments aim to aid in establishing long-term infrastructure to sustain humans on the moon. Backlog We view growth in backlog as a key measure of our business growth. As of December 31, 2024, our total contracted backlog was $296.7 million.
While primarily intended to function as mission assurance tools, these cameras may be capable of capturing incidental Earth imagery while in orbit. As such, these cameras may be subject to the licensing requirements and regulations of National Oceanic and Atmospheric Association’s (“NOAA") Commercial Report Sensing Regulatory Affairs (“CRSRA”) office.
National Oceanic and Atmospheric Administration Redwire spacecraft will operate with space-qualified photographic equipment installed. While primarily intended to function as mission assurance tools, these cameras may be capable of capturing incidental Earth imagery while in orbit.
If these proposed rules become final, they could change system design and financial costs in order to comply with or secure new Redwire spectrum licensure. National Oceanic and Atmospheric Administration Redwire spacecraft will operate with space-qualified photographic equipment installed.
Additionally, the FCC is currently considering additional rules which could change the operational, technical and financial requirements for commercial space operators subject to U.S. jurisdiction. If these proposed rules become final, they could change system design and financial costs in order to comply with or secure new Redwire spectrum licensure.
The FCC enacted a new set of licensing guidelines for small satellites and related systems that may apply to future spacecraft. As a result, we may face a transition to the small satellite licensing guidelines. Additionally, the FCC is currently considering additional rules which could change the operational, technical and financial requirements for commercial space operators subject to U.S. jurisdiction.
Operators of regulated space stations are required to hold and maintain compliance with proper licenses throughout the duration of any given mission. The FCC enacted a new set of licensing guidelines for small satellites and related systems that may apply to future spacecraft. As a result, we may face a transition to the small satellite licensing guidelines.
The Federal Aviation Administration As a participant in launch activities, we are indirectly subject to the license requirements of the Federal Aviation Administration’s (“FAA”) Office of Commercial Space Transportation (“AST”). The FAA regulates the airspace of the United States, through which launch vehicles must fly during launch to orbit.
As such, these cameras may be subject to the licensing requirements and regulations of National Oceanic and Atmospheric Association’s (“NOAA") Commercial Report Sensing Regulatory Affairs (“CRSRA”) office. The Federal Aviation Administration As a participant in launch activities, we are indirectly subject to the license requirements of the Federal Aviation Administration’s (“FAA”) Office of Commercial Space Transportation (“AST”).
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Redwire offers a wide variety of RF systems that enable space-to-space and space-to-Earth communications. Our RF systems include both fixed and deployable antennas, as well as the RF front end components, such as amplifiers, filters and switches. These systems support a variety of satellite applications, including encrypted tactical communications, signal detection and positioning.
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Spacecraft payloads are the sensors, support systems and processing that provide value to the end user of the satellite. Redwire is engaged in payloads for infrared imaging, space situational awareness and position timing and navigation (“PNT”). • Infrared Payloads: Infrared payloads are utilized to identify thermal signatures from space.
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Platforms, Payloads and Missions Digital engineering facilitates the modeling and simulation of prospective space architectures to support trade analysis, operational concepts, and testing. Redwire leverages high-fidelity digital engineering tools and model-based systems engineering to produce end-to-end virtual environments that decrease cost, increase speed to market, and enable mission optimization.
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Redwire is developing an infrared payload to address requirements for the Space Development Agency’s (“SDA”) Proliferating Warfighter Satellite System to identify and track missiles. • Space Situational Awareness Payloads: Space situational awareness payloads are those that are used to understand the surrounding space environment to maintain freedom of operation for spacecraft or to sense unexpected satellite activity.
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These small satellites demonstrate precision formation flying, a foundational building block to the advancement of space based sensors and measurements. Redwire’s specific payload developments include full optical payloads such as the quantum communications payload providing secure optical communication from satellite to ground.
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Redwire is developing space situational awareness payloads that operate in the RF and optical spectrum, including onboard computing and autonomous image recognition algorithms to positively identify objects from weak or distant signals. • Position Timing and Navigation (“PNT”) Payloads: PNT information is critical to all United States (“U.S.”) infrastructure and is depended on by governments, businesses and individuals continuously.
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Our payload developments also include spectrometers for radiative particles, such as the Energetic Particle Spectrometer (“EPT”) and the 3D Energetic Electron Spectrometer (3D optimized version of the EPT), as well as robotic payloads like robotic arms for on-orbit manufacturing, assembly and servicing applications. Microgravity Payloads Space provides a microgravity environment for scientific exploration which is not found on Earth.
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These services are provided by the U.S. Global Positioning System (“GPS”) constellation and the European Union’s Global Navigation Satellite System (“GNSS”) constellation. Increasingly, sovereign nations are seeking alternative PNT (“Alt PNT”) solutions that can be relied upon as backup solutions in the event of disruption from GPS or GNSS.
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Refer to Note Q – Revenues of the accompanying notes to the consolidated financial statements for further information on sales by major customers and location.
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Redwire is engaged in the development of Alt PNT payloads for nascent proliferated U.S. Department of Defense (“DoD”) LEO constellations, as well as to augment traditional GPS in Medium Earth Orbit (“MEO”). Power Generation Power generation is critical for space endeavors.
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Raw Materials and Suppliers We are generally engaged in light manufacturing activities and have limited exposure to fluctuations in the supply of raw materials. In manufacturing our products, we use our own production capabilities as well as a base of third-party suppliers and subcontractors.
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RF Systems Radio frequency communications systems are used as a primary payload, such as a link in a communications chain; to offload data to ground from other key sensor payloads; a primary sensor by sensing the emissions from other users; or as a secondary payload in order to transmit and receive key spacecraft telemetry and control signals.
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We support several organizations supporting diversity in the aerospace field, such as: the Brooke Owens Fellowship, the Matthew Isakowitz Fellowship, and the ZED Factor Fellowship program. At Redwire, Inclusion is a core value. We are implementing programs that celebrate the diversity of our workforce and highlight the contributions of under-represented communities.
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These antennas are also being used for the first generation of a national security satellite constellation in LEO. Our Link-16 antenna successfully demonstrated the first-ever transmission of a Link-16 signal from space to ground.
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Through our leadership communications, community sponsorships and policy development, we are committed to a culture that promotes diversity and inclusion throughout the Company and our industry. Compensation and Benefits We strive to offer competitive salaries and benefits.
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Our software supports mission assessments and design of new missions such as operation in Very Low Earth Obits (“VLEO”) and dynamic space operations in GEO. Redwire provides five lines of spacecraft tailored to mission and orbit requirements including, VLEO, LEO, MEO, GEO and beyond GEO (“X-GEO”). Redwire’s U.S.
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Sabersat and the EU’s Phantom spacecraft are being developed for VLEO to create capability in this less congested orbit where proximity to Earth provides imaging and low latency advantages. Redwire is the prime mission integrator on the Defense Advanced Research Projects Agency’s (“DARPA”) Otter program in the U.S.
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The Otter program includes the development of a revolutionary air-breathing satellite system and will demonstrate the use of novel electric propulsion in VLEO. Redwire’s operations in the EU are performing on ESA’s Skimsat program to develop this technology.
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We are leading small satellite pioneering research missions like PROBA-1 and PROBA-3, ESA’s small satellite with fully autonomous capabilities and PROBA-V, ESA’s Page 7 operational Earth observation mission based on a small satellite. The PROBA-3 small satellites demonstrate precision formation flying, a foundational building block to the advancement of space based sensors and measurements.
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Redwire’s U.S. based spacecraft platforms, Thresher (operating in LEO) and Mako (operating in MEO and GEO), are developed for challenging missions that address dynamic space operations where maneuverability, precision accuracy, and autonomous operation are important. Mako is designed for high precision rendezvous proximity operations (“RPO”), docking, and in-space refueling.
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It has the capability to support dynamic space operations and the adaptability to host a variety of mission payloads. Additionally, Mako serves space situational awareness and scientific missions at GEO and X-GEO orbits. Thresher is also highly maneuverable and is designed for rapid response, having demonstrated the capability to deliver within one year after contract award.
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Redwire’s in-space biotechnology manufacturing includes the in-space bioprinting of biostructures and tissues. Redwire has successfully 3D printed a meniscus in space with its BioFabrication Facility (“BFF”) aboard the ISS.
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In support of NASA’s Artemis program, we are also engaged in lunar research related to communications and navigation solutions as well as in-situ resource utilization. Redwire is developing Mason, which seeks to build critical infrastructure on the surface of the Moon, including shielding structures (e.g., berms), landing pads, roads, and foundations for habitats.
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The FAA regulates the airspace of the United States, through which launch vehicles must fly during launch to orbit. The AST office predominantly processes launch license requests submitted by launch vehicle operators, which include information on the constituent payloads flying on any given mission.
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Additionally, we use our website as a channel of distribution for important Company information. We routinely post on our website important information, including press releases, investor presentations and financial information, which may be accessed by clicking on the Investors section of www.redwirespace.com.
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We also use our website to expedite public access to time-critical information regarding our Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investors section of our website for important and time-critical information.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Summary Some of the principal risks that may impact our business and results of operations are listed below: Business and Industry Risks • risks associated with continued economic uncertainty, including high inflation, supply chain challenges, labor shortages, high interest rates, foreign currency exchange volatility, concerns of economic slowdown or recession and reduced spending or suspension of investment in new or enhanced projects; • the failure of financial institutions or transactional counterparties could adversely affect our current and projected business operations and our financial condition and results of operations; Page 10 • our limited operating history in an evolving industry and history of losses to date makes it difficult to evaluate our future prospects and the risks and challenges we may encounter; • if we are unable to successfully integrate our recently completed and future acquisitions or successfully select, execute or integrate future acquisitions into the business, our operations and financial condition could be materially and adversely affected; • our ability to grow our business depends on the successful development and continued refinement of many of our proprietary technologies, products, and service offerings; • competition with existing or new companies could cause downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share; • a limited number of customers make up a high percentage of our revenue; • matters relating to or arising from our Audit Committee investigation, including regulatory investigations and proceedings, litigation matters, and potential additional expenses, may adversely affect our business and results of operations; • natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business; • adverse publicity stemming from any incident involving Redwire or our competitors could have a material adverse effect on our business, financial condition and results of operations; • our business involves significant risks and uncertainties that may not be covered by insurance or indemnity; • our business could be seriously harmed if we fail to respond to commercial industry cycles in terms of our cost structure, manufacturing capacity, and/or personnel needs; • any delays in the development, design, engineering and manufacturing of our core offerings may adversely impact our business, financial condition and results of operations; • unsatisfactory performance of our core offerings resulting from challenges in the space environment, extreme space weather events or otherwise could have a material adverse effect on our business, financial condition and results of operations; • our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts; • our cash flow and profitability could be reduced if expenditures are incurred prior to the final receipt of a contract; • we 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; • we may not be able to convert our orders in backlog into revenue; • we 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; • our reliance on third-party launch vehicles to launch our spacecraft and customer payloads into space; • we 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, and any insurance we may have may not be adequate to cover our loss; • our 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; • cyber-attacks and other security threats and disruptions could have a material adverse effect on our business; • if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy; • our business, financial condition and results of operations are subject to risks resulting from broader geographic operations; • our net earnings could be materially affected by an impairment of goodwill; • our pension 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; • our ability to use net operating loss carryforwards and certain other tax attributes may be limited; Government Contract Risks • the U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year and consequently having to shut down or operate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have an adverse impact on our business, financial condition, results of operations and cash flows; • we depend significantly on U.S. government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited; • we 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; Page 11 Regulatory Risks • we are subject to stringent U.S. economic sanctions, and trade control laws and regulations; • if we fail to adequately protect our intellectual property rights, our competitive position could be impaired and our intellectual property applications for registration may not be issued or be registered; • protecting and defending against intellectual property claims could have a material adverse effect on our business; Risks Related to Financing and the Ownership of our Securities • our level of indebtedness and the potential need for substantial funding to finance our operations, which may not be available when we need it, on acceptable terms or at all; • we 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; • the reduced relative voting power of holders of our common stock and diluted the ownership of holders of our capital stock as a result of the issuance and sale of shares of our Series A Convertible Preferred Stock; • AE Industrial Partners and Bain Capital have significant influence over us, which could limit other investors’ ability to influence the outcome of key transactions; • provisions in the Certificate of Designation related to our Series A Convertible Preferred Stock may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock; • our 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; • there 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; • it is not possible to predict the actual number of shares we will sell under the Purchase Agreement to B.
Biggest changePage 11 Risk Factors Summary Some of the principal risks that may impact our business and results of operations are listed below: Business and Industry Risks • our results could be affected by continued economic uncertainty, an economic slowdown or a recession; • the failure of financial institutions or transactional counterparties could adversely affect our current and projected business operations and our financial condition and results of operations; • we have limited operating history in an evolving industry and history of losses to date, which makes it difficult to forecast our revenue, plan our expenses and evaluate our business and future prospects; • 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; • our 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; • competition from existing or new companies could cause downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share; • a limited number of customers make up a high percentage of our revenue; • matters relating to or arising from our Audit Committee investigation, including regulatory investigations and proceedings, litigation matters, and potential additional expenses, may adversely affect our business and results of operations; • natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business; • adverse publicity could have a material adverse effect on our business, financial condition and results of operations; • our business involves significant risks and uncertainties that may not be covered by insurance or indemnity; • if 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; • any delays in the development, design, engineering and manufacturing of our core offerings may adversely impact our business, financial condition and results of operations; • we rely on a limited number of suppliers for certain raw materials and supplied components; • unsatisfactory performance of our core offerings could have a material adverse effect on our business, financial condition and results of operations; • our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts; • our cash flow and profitability could be reduced if expenditures are incurred prior to the final receipt of a contract; • we 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; • we may not be able to convert our orders in backlog into revenue; • we 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; • we are dependent on third-party launch vehicles to launch our spacecraft and customer payloads into space; • we 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; • our 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; • our 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; • our systems, products, technologies and services and related equipment may have shorter useful lives than we anticipate; • cyber-attacks and other security threats and disruptions could have a material adverse effect on our business; • if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy; • our business, financial condition and results of operations are subject to risks resulting from broader geographic operations; • net earnings and net assets could be materially affected by an impairment of goodwill; • pension 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; Page 12 • our ability to use net operating loss carryforwards and certain other tax attributes may be limited; Government Contract Risks • we 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; • we depend heavily on contracts with the U.S. government for a substantial portion of our business and changes in the U.S. government’s priorities, or delays or reductions in spending, could have a material adverse effect on our business; • we depend significantly on U.S. government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited; • disputes 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; Regulatory Risks • investments in us may be subject to U.S. foreign investment regulations, which may impose conditions on or limit certain investors’ ability to purchase our common stock, potentially making our common stock less attractive to investors; • we are subject to trade control laws and regulations, including export controls and stringent U.S. economic sanctions, which could affect our ability to do business with certain customers; • our business is subject to a wide variety of additional extensive and evolving government laws and regulations and failure to comply with such laws and regulations could have a material adverse effect on our business; • our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners; • failure to comply with federal, state and foreign laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition; • we are subject to environmental regulation and may incur substantial costs; • changes in tax laws or regulations may increase tax uncertainty and adversely affect results of our operations and our effective tax rate; • if we cannot successfully protect our intellectual property rights or defend against intellectual property claims, our business could suffer; • our technology may violate the proprietary rights of third parties, which could have a negative impact on our operations; Risks Related to Financing and the Ownership of our Securities • we 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; • the 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; • AEI and Bain Capital have significant influence over us, which could limit other investors’ ability to influence the outcome of key transactions; • provisions in the Certificate of Designation related to our Series A Convertible Preferred Stock may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock; • our 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; • there 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 • we may not be able to remain in compliance with the continued listing requirements of the NYSE • we may issue additional common stock or other equity securities which could dilute our shareholders’ ownership interests; • the market price of our common stock and warrants has and may continue to fluctuate; and • we have identified material weaknesses in internal control over reporting.
Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “Risk Factors” section and the following factors, among others: • the terms of customer contracts that affect the timing of revenue recognition; • variability in demand for our services and solutions; • commencement, completion or termination of contracts during any particular quarter; • timing of shipments and product deliveries; • timing of award or performance incentive fee notices; • timing of significant bid and proposal costs; • the costs of remediating unknown defects, errors or performance problems of our product offerings; Page 20 • unexpected weather patterns, natural disasters or other events that force a cancellation or rescheduling of launches; • the cost of raw materials or supplied components critical for the manufacture and operation of our core space infrastructure offerings; • variable purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite quantity (“IDIQ”) contracts; • restrictions on and delays related to the export of defense articles and services; • costs related to government inquiries, changes in governmental regulations or in the status of our regulatory approvals or applications; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and joint ventures; • strategic investments or changes in business strategy; • the timing and cost of, and level of investment in, research and development relating to our core offerings and our current or future facilities • changes in the extent to which we use subcontractors; • seasonal fluctuations in our staff utilization rates; • changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets; • the length of sales cycles; • future accounting pronouncements or changes in our accounting policies; • the impact of epidemics or pandemics; and • general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “Risk Factors” section and the following factors, among others: • the terms of customer contracts that affect the timing of revenue recognition; • variability in demand for our services and solutions; • commencement, completion or termination of contracts during any particular quarter; • timing of shipments and product deliveries; • timing of award or performance incentive fee notices; • timing of significant bid and proposal costs; • the costs of remediating unknown defects, errors or performance problems of our product offerings; • unexpected weather patterns, natural disasters or other events that force a cancellation or rescheduling of launches; • the cost of raw materials or supplied components critical for the manufacture and operation of our core space infrastructure offerings; • variable purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite quantity (“IDIQ”) contracts; • restrictions on and delays related to the export of defense articles and services; • costs related to government inquiries, changes in governmental regulations or in the status of our regulatory approvals or applications; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and joint ventures; • strategic investments or changes in business strategy; • the timing and cost of, and level of investment in, research and development relating to our core offerings and our current or future facilities • changes in the extent to which we use subcontractors; • seasonal fluctuations in our staff utilization rates; • changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets; • the length of sales cycles; • future accounting pronouncements or changes in our accounting policies; • the impact of epidemics or pandemics; and Page 22 • general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
Factors affecting the trading price of our common stock may include: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to it; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet market expectations in a particular period; • changes in financial estimates and recommendations or comments by securities analysts or other third parties concerning us or the aerospace and defense industry and market in general; • future announcements or press coverage concerning our business or our competitors’ businesses and the public’s reaction to such announcements, press coverage or releases, and filings with the SEC; • operating and stock price performance of other companies that investors deem comparable to us; • the size of our public float; • “short squeezes” and meme-like trading of our common stock or the common equity of companies in our industry; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of common stock available for public sale; • any significant change in our board or management; • sales of substantial amounts of common stock by our directors, executive officers or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
Factors affecting the trading price of our common stock may include: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to it; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet market expectations in a particular period; • changes in financial estimates and recommendations or comments by securities analysts or other third parties concerning us or the aerospace and defense industry and market in general; • future announcements or press coverage concerning our business or our competitors’ businesses and the public’s reaction to such announcements, press coverage or releases, and filings with the SEC; • operating and stock price performance of other companies that investors deem comparable to us; • the size of our public float; • “short squeezes” and meme-like trading of our common stock or the common equity of companies in our industry; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of common stock available for public sale; Page 35 • any significant change in our board or management; • sales of substantial amounts of common stock by our directors, executive officers or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
Our maintenance of higher levels of indebtedness could have adverse consequences including impairing our ability to obtain additional financing in the future Our level of debt places significant demands on our cash resources, which could: • make it more difficult to satisfy our outstanding debt obligations; • require us to dedicate a substantial portion of our cash for payments related to our debt, reducing the amount of cash flow available for working capital, capital expenditures, entitlement of our real estate assets, contributions to our tax-qualified pension plan, and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in the industries in which we compete; • place us at a competitive disadvantage with respect to our competitors, some of which have lower debt service obligations and greater financial resources than we do; • limit our ability to borrow additional funds; • limit our ability to expand our operations through acquisitions; and • increase our vulnerability to general adverse economic and industry conditions.
Our maintenance of higher levels of indebtedness could have adverse consequences including impairing our ability to obtain additional financing in the future Our level of debt places significant demands on our cash resources, which could: Page 31 • make it more difficult to satisfy our outstanding debt obligations; • require us to dedicate a substantial portion of our cash for payments related to our debt, reducing the amount of cash flow available for working capital, capital expenditures, entitlement of our real estate assets, contributions to our tax-qualified pension plan, and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in the industries in which we compete; • place us at a competitive disadvantage with respect to our competitors, some of which have lower debt service obligations and greater financial resources than we do; • limit our ability to borrow additional funds; • limit our ability to expand our operations through acquisitions; and • increase our vulnerability to general adverse economic and industry conditions.
Reasons for this include, but are not limited to, the following: • political and economic instability; • governments’ restrictive trade policies; • the imposition or rescission of duties, taxes or government royalties; • exchange rate risks; • exposure to varying legal standards, including data privacy, security and intellectual property protection in other jurisdictions; • difficulties in obtaining required regulatory authorizations; • local domestic ownership requirements; • requirements that certain operational activities be performed in-country; • changing and conflicting national and local regulatory requirements; and • the geographic, language and cultural differences between personnel in different areas of the world.
Reasons for this include, but are not limited to, the following: • political and economic instability; Page 24 • governments’ restrictive trade policies; • the imposition or rescission of duties, taxes or government royalties; • exchange rate risks; • exposure to varying legal standards, including data privacy, security and intellectual property protection in other jurisdictions; • difficulties in obtaining required regulatory authorizations; • local domestic ownership requirements; • requirements that certain operational activities be performed in-country; • changing and conflicting national and local regulatory requirements; and • the geographic, language and cultural differences between personnel in different areas of the world.
The repurchase price of the Series A Convertible Preferred Stock is equal to the greater of (a) (i) 100% of the applicable accrued value as of the repurchase date plus (ii) if prior to October 28, 2027, the aggregate amount of all dividends that would have been paid in respect of an outstanding share of such series of Series A Convertible Preferred Stock from the repurchase date through October 28, 2027 and (b) the amount that such holder would have received in such fundamental change with respect to such share of Series A Convertible Preferred Stock if all shares of Series A Convertible Preferred Stock had been converted into shares of common stock on the business day immediately prior to the effective date of the relevant fundamental change.
The repurchase price of the Series A Convertible Preferred Stock is equal to the greater of (a) (i) 100% of the applicable accrued value as of the repurchase date plus (ii) if prior to October 28, 2027, the aggregate amount of all dividends that would have been paid in respect of an outstanding share of such series of Series A Convertible Preferred Stock from the repurchase date through October 28, 2027 and Page 33 (b) the amount that such holder would have received in such fundamental change with respect to such share of Series A Convertible Preferred Stock if all shares of Series A Convertible Preferred Stock had been converted into shares of common stock on the business day immediately prior to the effective date of the relevant fundamental change.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of our Series A Convertible Preferred Stock are entitled to receive certain payments (i) prior to any amounts paid to holders of our common stock and each other class or series of our capital stock now existing or hereafter authorized, the terms of which do not expressly provide that Page 32 such class or series ranks either senior to, or on parity with, the Series A Convertible Preferred Stock, and (ii) on parity with each other class or series of our capital stock established in the future, the terms of which expressly provide that such class or series ranks on a parity basis with the Series A Convertible Preferred Stock.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of our Series A Convertible Preferred Stock are entitled to receive certain payments (i) prior to any amounts paid to holders of our common stock and each other class or series of our capital stock now existing or hereafter authorized, the terms of which do not expressly provide that such class or series ranks either senior to, or on parity with, the Series A Convertible Preferred Stock, and (ii) on parity with each other class or series of our capital stock established in the future, the terms of which expressly provide that such class or series ranks on a parity basis with the Series A Convertible Preferred Stock.
Page 15 On May 25, 2022, a plaintiff commenced derivative litigation in the United States District Court for the District of Delaware on behalf of the Company against Peter Cannito, Les Daniels, Reggie Brothers, Joanne Isham, Kirk Konert, Jonathan Baliff, and John S. Bolton. That litigation is captioned Yingling v. Cannito, et al., Case No. 1:22-cv-00684-MN (D. Del.).
On May 25, 2022, a plaintiff commenced derivative litigation in the United States District Court for the District of Delaware on behalf of the Company against Peter Cannito, Les Daniels, Reggie Brothers, Joanne Isham, Kirk Konert, Jonathan Baliff, and John S. Bolton. That litigation is captioned Yingling v. Cannito, et al., Case No. 1:22-cv-00684-MN (D. Del.).
AEI may nominate five designees to our Board and, under the terms of the Bain Capital Investment Agreement (as defined below), for so long as Bain Capital beneficially owns shares of the Company’s common stock in the aggregate and on as-converted basis, at least equal to 50% of the number of shares of common stock that it held on an as-converted basis immediately following the Bain Capital Closing (as defined below), Bain Capital will have the right to designate one member to the Board.
AEI may nominate five designees to our Board and, under the terms of the Bain Capital Investment Agreement (as defined below), for so long as Bain Capital beneficially owns shares of the Company’s common stock in the aggregate and on as-converted basis, at least equal to 50% of the number of shares of common stock that it held on an as-converted basis immediately following the consummation of the Bain Capital investment, Bain Capital will have the right to designate one member to the Board.
In addition, problems and delays in development or delivery as a result of issues with respect to design, technology, licensing and patent Page 16 rights, labor, learning curve assumptions or materials and components could prevent us from achieving contractual requirements. In many circumstances, we may receive indemnification from the U.S. government. We generally do not receive indemnification from foreign governments.
In addition, problems and delays in development or delivery as a result of issues with respect to design, technology, licensing and patent rights, labor, learning curve assumptions or materials and components could prevent us from achieving contractual requirements. In many circumstances, we may receive indemnification from the U.S. government. We generally do not receive indemnification from foreign governments.
We depend significantly on U.S. government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund, or negative audit findings for, one or more of these contracts could have an adverse impact on our business, financial condition, results of operations and cash flows.
Page 26 We depend significantly on U.S. government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund, or negative audit findings for, one or more of these contracts could have an adverse impact on our business, financial condition, results of operations and cash flows.
The GDPR, DPA 18, and other similar regulations require companies to give specific types of notice and informed consent is required for certain actions, and the GDPR also imposes additional conditions in order to satisfy such consent, such as bundled consents. Page 28 We cannot determine the impact any future laws, regulations and standards may have on our business.
The GDPR, DPA 18, and other similar regulations require companies to give specific types of notice and informed consent is required for certain actions, and the GDPR also imposes additional conditions in order to satisfy such consent, such as bundled consents. We cannot determine the impact any future laws, regulations and standards may have on our business.
In addition, the termination of these relationships, including following any failure to renew a long-term contract, could result in a temporary or permanent loss of revenue. Matters relating to or arising from our Audit Committee investigation, including regulatory investigations and proceedings, litigation matters, and potential additional expenses, may adversely affect our business and results of operations.
In addition, the termination of these relationships, including following any failure to renew a long-term contract, could result in a temporary or permanent loss of revenue. Page 16 Matters relating to or arising from our Audit Committee investigation, including regulatory investigations and proceedings, litigation matters, and potential additional expenses, may adversely affect our business and results of operations.
The rapid evolution of AI, including potential government regulation of AI, will require significant resources to develop, test and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact. Page 19 We are dependent on third-party launch vehicles to launch our spacecraft and customer payloads into space.
The rapid evolution of AI, including potential government regulation of AI, will require significant resources to develop, test and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact. We are dependent on third-party launch vehicles to launch our spacecraft and customer payloads into space.
Page 31 Additionally, as long as AEI and Bain Capital continue to beneficially own at least 25% of the aggregate number of shares of Series A Convertible Preferred Stock originally issued to each of them, we may not undertake certain actions without the prior approval of each of Bain Capital and AEI, and in the event that Bain Capital or AEI does not continue to hold 25% of the aggregate number of shares of Series A Convertible Preferred Stock originally issued to them, we may not undertake certain actions without the prior approval of the holders of a majority of the issued and outstanding shares of Series A Convertible Preferred Stock in the aggregate.
Additionally, as long as AEI and Bain Capital continue to beneficially own at least 25% of the aggregate number of shares of Series A Convertible Preferred Stock originally issued to each of them, we may not undertake certain actions without the prior approval of each of Bain Capital and AEI, and in the event that Bain Capital or AEI does not continue to hold 25% of the aggregate number of shares of Series A Convertible Preferred Stock originally issued to them, we may not undertake certain actions without the prior approval of the holders of a majority of the issued and outstanding shares of Series A Convertible Preferred Stock in the aggregate.
We compete domestically and internationally against space systems components providers, including Moog Inc., Space Micro Inc., Rocket Lab USA, Inc. (a segment of Rocket Labs), and in some cases against large companies such as Northrup Grumman. We may also face competition in the future from emerging low-cost competitors in Europe, India, Russia and China.
We compete domestically and internationally against space systems components providers, including Moog Inc., Space Micro Inc., Rocket Lab USA, Inc. (a segment of Rocket Labs), and in some cases against large companies such as Northrop Grumman. We may also face competition in the future from emerging low-cost competitors in Europe, India, Russia and China.
If our government or prime contractor customer’s requirements should change or if the government or the prime contractor should direct the anticipated procurement to another contractor, or if the anticipated contract award does not materialize, or if the equipment or materials become obsolete or require modification before we are under contract for the procurement, our Page 18 investment in the equipment or materials might be at risk if we cannot efficiently resell them.
If our government or prime contractor customer’s requirements should change or if the government or the prime contractor should direct the anticipated procurement to another contractor, or if the anticipated contract award does not materialize, or if the equipment or materials become obsolete or require modification before we are under contract for the procurement, our investment in the equipment or materials might be at risk if we cannot efficiently resell them.
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 may result in greater product returns, service problems and warranty claims and could harm our business, financial condition, results of operations and cash flows.
Also, our subcontractors and other suppliers Page 27 may not be able to acquire or maintain the quality of the materials, components, subsystems and services they supply, which may result in greater product returns, service problems and warranty claims and could harm our business, financial condition, results of operations and cash flows.
If we do not address these risks successfully, our results of operations could differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our common stock price to decline. As part of growing our business, we have made and may continue to make acquisitions.
If we do not address these risks successfully, our results of operations could Page 14 differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our common stock price to decline. As part of growing our business, we have made and may continue to make acquisitions.
Page 14 Additionally, our markets are facing increasing industry consolidation, resulting in larger competitors who have more market share putting more downward pressure on prices and offering a more robust portfolio of products and services. We are subject to competition based upon product design, performance, pricing, quality, and services.
Additionally, our markets are facing increasing industry consolidation, resulting in larger competitors who have more market share putting more downward pressure on prices and offering a more robust portfolio of products and services. We are subject to competition based upon product design, performance, pricing, quality, and services.
If we are unable to protect sensitive information, including complying with evolving information security, data protection and privacy regulations, our customers or governmental authorities could investigate the adequacy of our threat mitigation and detection processes and procedures, and could bring actions against us for noncompliance with applicable laws and regulations.
If we are unable to protect sensitive information, including complying with evolving information security, data protection and privacy regulations, our customers or governmental authorities could investigate the adequacy of our threat mitigation and detection processes Page 23 and procedures, and could bring actions against us for noncompliance with applicable laws and regulations.
Page 27 Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows and financial condition.
Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows and financial condition.
If we are unable to generate sufficient cash flow to service our debt and fund our operating costs, our liquidity may be adversely affected. Page 30 We 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.
If we are unable to generate sufficient cash flow to service our debt and fund our operating costs, our liquidity may be adversely affected. We 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.
A number of factors will impact the useful lives of our core offerings, including, among other things, the quality of their design and construction, the durability of their component parts and availability of any replacement components, and the occurrence of any anomaly or series of anomalies or other risks affecting the Page 21 technology during launch and in orbit.
A number of factors will impact the useful lives of our core offerings, including, among other things, the quality of their design and construction, the durability of their component parts and availability of any replacement components, and the occurrence of any anomaly or series of anomalies or other risks affecting the technology during launch and in orbit.
Relatedly, if such technologies become viable offerings in the future, we may be subject to competition from our competitors within the space-infrastructure industry, some of which may have substantially greater monetary and knowledge resources than we have and expect to have in the future to devote to the development of these technologies.
Relatedly, if such technologies become viable offerings in the future, we may be subject to competition from our competitors within Page 20 the space-infrastructure industry, some of which may have substantially greater monetary and knowledge resources than we have and expect to have in the future to devote to the development of these technologies.
If for some reason our security clearance is invalidated or terminated, we may not be able to continue to perform on Page 24 classified contracts and would not be able to enter into new classified contracts, which could materially adversely affect our business, financial condition, and results of operations.
If for some reason our security clearance is invalidated or terminated, we may not be able to continue to perform on classified contracts and would not be able to enter into new classified contracts, which could materially adversely affect our business, financial condition, and results of operations.
Any delays in the development, design, engineering and manufacturing of our products and services may adversely impact our business, financial condition and results of operations. We have previously experienced, and may experience in the future, delays or other complications in the design, manufacture, production, delivery and servicing ramp of our core space infrastructure offerings.
Any delays in the development, design, engineering and manufacturing of our core offerings may adversely impact our business, financial condition and results of operations. We have previously experienced, and may experience in the future, delays or other complications in the design, manufacture, production, delivery and servicing ramp of our core space infrastructure offerings.
Adverse 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.
Page 17 Adverse 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.
For some missions, we can elect to buy launch insurance, which can reduce our monetary losses from the launch failure, but even in this case we will have losses associated with our inability to test our technology in space and delays with further technology development.
For some missions, we can elect to buy launch insurance, which can reduce our monetary losses from the Page 21 launch failure, but even in this case we will have losses associated with our inability to test our technology in space and delays with further technology development.
Page 35 Broad market and industry factors may depress the market price of our common stock irrespective of our operating performance. The stock market in general and NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
Broad market and industry factors may depress the market price of our common stock irrespective of our operating performance. The stock market in general and NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
Page 25 In addition, U.S. government contracts generally contain provisions permitting termination, in whole or in part, without prior notice at the U.S. government’s convenience upon payment only for work done and commitments made at the time of termination.
In addition, U.S. government contracts generally contain provisions permitting termination, in whole or in part, without prior notice at the U.S. government’s convenience upon payment only for work done and commitments made at the time of termination.
A variety of federal, state and foreign laws and regulations govern the collection, use, retention, storage, destruction, sharing and security of this information. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations.
A variety of federal, state and foreign laws and regulations govern the collection, use, retention, storage, destruction, sharing and security of this information. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing Page 29 interpretations.
Unsatisfactory performance of our products and services could have a material adverse effect on our business, financial condition and results of operation. We manufacture, design and engineer highly sophisticated core space infrastructure offerings that depend on complex technology.
Unsatisfactory performance of our core offerings could have a material adverse effect on our business, financial condition and results of operation. We manufacture, design and engineer highly sophisticated core space infrastructure offerings that depend on complex technology.
We must be in a position to adjust our cost and expense structure to reflect prevailing market conditions and to continue to motivate and retain our key employees. If we fail to respond, then our business could be seriously harmed.
We must be in a position to adjust our cost and expense structure to reflect prevailing market conditions and to continue to motivate and retain our key Page 18 employees. If we fail to respond, then our business could be seriously harmed.
Also, hostile third parties or nation states may try to install malicious code or devices into our core offerings. Undetected errors may adversely affect our core offerings ease of use and may create customer satisfaction issues.
Also, hostile third Page 19 parties or nation states may try to install malicious code or devices into our core offerings. Undetected errors may adversely affect our core offerings ease of use and may create customer satisfaction issues.
Others may independently develop the same or similar technologies and processes or may improperly acquire and use information about our technologies and processes, which may allow them to provide products and services similar to ours, which could harm our competitive Page 29 position.
Others may independently develop the same or similar technologies and processes or may improperly acquire and use information about our technologies and processes, which may allow them to provide products and services similar to ours, which could harm our competitive position.
These 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.
Page 36 These 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.
In addition, there can be no assurance that the market for our core offerings will develop or continue to expand or that we will be successful in newly identified markets as we currently anticipate.
In addition, there can be no assurance that the Page 15 market for our core offerings will develop or continue to expand or that we will be successful in newly identified markets as we currently anticipate.
Our disaster recovery plan or those of our third- Page 22 party providers may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.
Our disaster recovery plan or those of our third-party providers may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.
Certain 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.
Page 30 Certain 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.
Page 36 In addition, we did not design and maintain effective information technology (“IT”) general controls for information systems that are relevant to the preparation of the consolidated financial statements.
In addition, we did not design and maintain effective information technology (“IT”) general controls for information systems that are relevant to the preparation of the consolidated financial statements.
Risks Relating to the Company’s Business and Industry Our results could be affected by continued economic uncertainty, an economic slowdown or a recession.
Page 13 Risks Relating to the Company’s Business and Industry Our results could be affected by continued economic uncertainty, an economic slowdown or a recession.
Disputes 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 products, systems or services to be produced or delivered in an untimely or unsatisfactory manner. We engage subcontractors on many of our contracts.
Disputes 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. We engage subcontractors on many of our contracts.
Tariffs recently imposed on certain materials and other trade issues may create or exacerbate existing materials shortages and may result in further supplier business closures.
Tariffs recently imposed or applied in the future on certain materials and other trade issues may create or exacerbate existing materials shortages and may result in further supplier business closures.
We have the option to issue dividends payable on the Series A Convertible Preferred Stock by issuing additional shares of Series A Convertible Preferred Stock in satisfaction of such dividend (“PIK Dividend”) and in the future will likely satisfy any such dividends payable with respect to the Series A Convertible Preferred Stock as PIK Dividends.
Page 32 We have the option to issue dividends payable on the Series A Convertible Preferred Stock by issuing additional shares of Series A Convertible Preferred Stock in satisfaction of such dividend (“PIK Dividend”) and in the future may satisfy any such dividends payable with respect to the Series A Convertible Preferred Stock as PIK Dividends.
AEI and Bain Capital have significant influence over us, which could limit your ability to influence the outcome of key transactions.
AEI and Bain Capital have significant influence over us, which could limit other investors’ ability to influence the outcome of key transactions.
Department of Defense (“DoD”) and certain other agencies of the U.S. government. As a cleared entity, we must comply with the requirements of NISPOM, and any other applicable U.S. government industrial security regulations.
DoD and certain other agencies of the U.S. government. As a cleared entity, we must comply with the requirements of NISPOM, and any other applicable U.S. government industrial security regulations.
As of December 31, 2023, our contracted backlog consisted of $372.8 million in customer contracts. However, many of these contracts are cancellable by customers for convenience. In the event of a cancellation for convenience, we are generally entitled to be compensated for the work performed up to the date of cancellation.
As of December 31, 2024, our contracted backlog consisted of $296.7 million in customer contracts. However, many of these contracts are cancellable by customers for convenience. In the event of a cancellation for convenience, we are generally entitled to be compensated for the work performed up to the date of cancellation.
Page 26 Regulatory Risk Factors Investments in us may be subject to U.S. foreign investment regulations which may impose conditions on or limit certain investors’ ability to purchase our common stock, potentially making our common stock less attractive to investors. Our investments in U.S. companies may also be subject to U.S. foreign investment regulations.
Regulatory Risk Factors Investments in us may be subject to U.S. foreign investment regulations which may impose conditions on or limit certain investors’ ability to purchase our common stock, potentially making our common stock less attractive to investors. Our investments in U.S. companies may also be subject to U.S. foreign investment regulations. Under the “Exon-Florio Amendment” to the U.S.
The Series A Convertible Preferred Stock votes with our common stock on an as-converted basis. Additionally, as of December 31, 2023, AEI owned 35,967,202 shares of our outstanding common stock and 2,000,000 of our warrants.
The Series A Convertible Preferred Stock votes with our common stock on an as-converted basis. Additionally, as of December 31, 2024, AEI owned 35,687,607 shares of our outstanding common stock and 2,000,000 of our warrants.
As of December 31, 2023, there were 65,546,174 shares of our common stock outstanding. Substantially all of our issued and outstanding shares are freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act.
As of December 31, 2024, there were 67,002,370 shares of our common stock outstanding. Substantially all of our issued and outstanding shares are freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act.
As relief, the plaintiffs are seeking, among other things, compensatory damages. The defendants believe the allegations are without merit and intend to defend the suit vigorously. On August 16, 2022, the defendants moved to dismiss the complaint in its entirety, and such motion was denied by the Court on March 22, 2023.
As relief, the plaintiffs are seeking, among other things, compensatory damages. On August 16, 2022, the defendants moved to dismiss the complaint in its entirety, and such motion was denied by the Court on March 22, 2023.
As of December 31, 2023, we had $89.5 million of total debt outstanding and up to $18.0 million of additional borrowing capacity under our revolving credit facility. Subject to the limits contained in some of the agreements governing our outstanding debt, we may incur additional debt in the future.
As of December 31, 2024, we had $126.6 million of total debt outstanding and up to $15.0 million of additional borrowing capacity under our revolving credit facility. Subject to the limits contained in some of the agreements governing our outstanding debt, we may incur additional debt in the future.
We are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to our manufacturing in-space operations, employment and labor, health care, tax, privacy and data security, health and safety, and environmental issues.
Failure to comply with such laws and regulations could have a material adverse effect on our business. We are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to our manufacturing in-space operations, employment and labor, health care, tax, privacy and data security, health and safety, and environmental issues.
(“Bain Capital”), and certain other investors (collectively, the “Investors”). Shares of the Convertible Preferred Stock are immediately and currently convertible into approximately 31,452,478 shares of common stock and, on an as-converted basis represent approximately 32.4% of Redwire’s outstanding common stock assuming conversion of the Series A Convertible Preferred Stock as of December 31, 2023.
(“Bain Capital”), and certain other investors (collectively, the “Investors”). Shares of the Convertible Preferred Stock are immediately and currently convertible into approximately 36,416,297 shares of common stock and, on an as-converted basis represent approximately 35% of Redwire’s outstanding common stock assuming conversion of the Series A Convertible Preferred Stock as of December 31, 2024.
As part of this assessment, we will be designing, implementing and documenting IT general controls. We are working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation will likely go beyond December 31, 2024.
As part of this assessment, we will be designing, implementing and documenting IT general controls. We are working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation for our U.S. operations will likely be complete by December 31, 2025 and full remediation for our Europe operations will likely go beyond December 31, 2025.
We are also in the process of standardizing controls, processes and policies across the Company to ensure consistent application including controls over the preparation and review of business performance reviews, account reconciliations, journal entries and contract estimates used in determining the recognition of revenue. • We are in the process of performing an assessment of all IT systems that provide data for financial reporting purposes and consolidating systems where appropriate.
We are also in the process of standardizing controls, processes and policies across the Company to ensure consistent application including controls over the preparation and review of business performance reviews, account reconciliations, journal entries and contract estimates used in determining the recognition of revenue. • We are in the process of performing an assessment of all IT systems that provide data for financial reporting purposes and consolidating systems where appropriate, including, but not limited to, implementing one enterprise resource planning (“ERP”) system for our U.S. operations and one ERP system for our Europe operations.
The Foreign Investment Risk Review Modernization Act (“FIRRMA”), enacted in 2018, amended the DPA to, among other things, expand CFIUS’s jurisdiction beyond acquisitions of control of U.S. businesses.
CFIUS may impose mitigation conditions to grant clearance of a transaction. The Foreign Investment Risk Review Modernization Act (“FIRRMA”), enacted in 2018, amended the DPA to, among other things, expand CFIUS’s jurisdiction beyond acquisitions of control of U.S. businesses.
Specifically, certain members of senior management failed to reinforce the need for compliance with certain of the Company’s accounting and finance policies and procedures, including reinforcement of appropriate communication. • We have not consistently established appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. • We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations, journal entries and contract estimates used in determining the recognition of revenue.
In connection with the Company’s evaluation of internal control over financial reporting, the following material weaknesses have been identified: • We have not consistently established appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. • We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations, journal entries and contract estimates used in determining the recognition of revenue.
In addition, changes in U.S. foreign trade control laws and regulations, U.S. foreign policy, or reclassifications of our products or technologies, may restrict our future operations. Our 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.
In Page 28 addition, changes in U.S. foreign trade control laws and regulations, U.S. foreign policy, or reclassifications of our products or technologies, may restrict our future operations. Our business is subject to a wide variety of additional extensive and evolving government laws and regulations.
Riley Registration Rights Agreement, these parties may sell large amounts of our common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in our stock price or putting significant downward pressure on the price of our common stock.
Upon effectiveness of any registration statement we file pursuant to the Investor Rights Agreement or the Series A Registration Rights Agreement, these parties may sell large amounts of our common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in our stock price or putting significant downward pressure on the price of our common stock.
Under the “Exon-Florio Amendment” to the U.S. Defense Production Act of 1950, as amended (the “DPA”), the U.S. President has the power to disrupt or block certain foreign investments in U.S. businesses if he determines that such a transaction threatens U.S. national security.
Defense Production Act of 1950, as amended (the “DPA”), the U.S. President has the power to disrupt or block certain foreign investments in U.S. businesses if he determines that such a transaction threatens U.S. national security. The Committee on Foreign Investment in the United States (“CFIUS”) has the authority to conduct national security reviews of certain foreign investments.
We 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. The Company’s common stock is listed on the NYSE under the symbol “RDW”.
Page 34 Risks Related to Being a Public Company We 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.
Remediation Plans We 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 tone at the top and other communications training, designing and implementing new control activities, and enhancing existing control activities. • We engaged a third-party global consulting firm to accelerate the design of new controls or enhance existing controls to ensure timely and accurate financial reporting. • We have established an ethics program which requires training and certification for all employees as well as enhances awareness of our whistleblower avenues. • We will continue to conduct training and document our processes and procedures, including accounting policies, and implement a comprehensive financial closing process checklist with additional layers of reviews.
Remediation Plans We 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. • We engaged a third-party global consulting firm to accelerate the design of new controls or enhance existing controls to ensure timely and accurate financial reporting across our operations in both the U.S. and Europe. • We will continue to conduct training and document our processes and procedures, including accounting policies, and implement a comprehensive financial closing process checklist with additional layers of reviews.
Further, the uncertainty of harsh space environmental risks, such as satellite ingestion, solar flares, coronal mass ejectors, meteor showers and other extreme space weather events also may cause the performance of our core offerings to be unsatisfactory.
Further, the uncertainty of harsh space environmental risks, such as satellite ingestion, solar flares, coronal mass ejectors, meteor showers and other extreme space weather events also may cause the performance of our core offerings to be unsatisfactory. Such issues with our core offerings could result in our customers’ delaying or cancelling planned missions, increased regulation or other systemic consequences.
If the number of companies offering launch services or the number of launches does not grow in the future or there is a consolidation among companies who offer these services, this could result in a shortage of space on these launch vehicles, which may cause delays in our ability to meet our customers’ needs.
Currently there are only a handful of companies who offer launch services, and if this sector of the space industry does not grow or there is consolidation among these companies, this could result in a shortage of space on these launch vehicles and we may not be able to secure space on a launch vehicle, which may cause delays in our ability to meet our customers’ needs.
The revenue attributable to our top customers has fluctuated in the past and may fluctuate in the future, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
Revenues from our two largest customers were approximately 10% and 35% of our total revenues for the year ended December 31, 2024. The revenue attributable to our top customers has fluctuated in the past and may fluctuate in the future, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
We are required at least annually to test the recoverability of goodwill or more frequently when events and circumstances indicate that it is more likely Page 23 than not that the fair value of a reporting unit is less than its carrying value. The recoverability test of goodwill is based on the current fair value of our identified reporting units.
We have a significant amount of goodwill recorded on our consolidated balance sheet as of December 31, 2024. We are required at least annually to test the recoverability of goodwill or more frequently when events and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value.
If such incidents should occur, we will likely experience a total loss of our systems, products, technologies and services and our customers’ payloads. The total or partial loss of one or more of our products or customer payloads could have a material adverse effect on our results of operations and financial condition.
The total or partial loss of one or more of our products or customer payloads could have a material adverse effect on our results of operations and financial condition.
We 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, and any insurance we have may not be adequate to cover our loss.
We 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. Although there have been and will continue to be technological advances in spaceflight, it is still an inherently dangerous activity.
Riley, or the actual gross proceeds resulting from those sales; Risks Related to Being a Public Company • our management team has limited experience managing a public company; • the trading price of our common stock and warrants is and may continue to be volatile; and • if we were to identify additional material weaknesses or other deficiencies, or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately and timely report our financial results, in which case our business may be harmed and investors may lose confidence in the accuracy and completeness of our financial reports.
If we were to identify additional material weaknesses or other deficiencies, or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately and timely report our financial results, in which case our business may be harmed and investors may lose confidence in the accuracy and completeness of our financial reports.
The price of our common stock may be adversely affected due to, among other things, our financial results and market conditions. There can be no assurance that we will continue to Page 34 remain in compliance with this standard or that we will remain in compliance with any of the other applicable continued listing standards of the NYSE.
There can be no assurance that we will continue to remain in compliance with the NYSE’s minimum price rule for our common stock or that we will remain in compliance with any of the other applicable continued listing standards of the NYSE.
We may not be able to continue the operational success of the businesses we acquire or successfully finance or integrate such businesses or the businesses with which we form a partnership or joint venture.
We may not be able to continue the operational success of the businesses we acquire or successfully finance or integrate such businesses or the businesses with which we form a partnership or joint venture. In addition, we may have potential write-offs of acquired assets and/or an impairment of any goodwill recorded as a result of such acquisitions or participations.
However, given the current stage of the proceedings, a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time.
This matter is currently in the early stages of discovery, and a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time.
In addition, we may have potential write-offs of Page 13 acquired assets and/or an impairment of any goodwill recorded as a result of such acquisitions or participations. Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business.
Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business.
As of December 31, 2023, our available liquidity totaled $48.3 million, which was comprised of $30.3 million in cash and cash equivalents, and $18.0 million in available borrowings from our existing credit facilities.
We have and may continue to experience net cash outflows from operating activities as we continue to grow our business. As of December 31, 2024, our available liquidity totaled $48.7 million, which was comprised of $33.7 million in cash and cash equivalents, and $15.0 million in available borrowings from our existing credit facilities.
This decline could lead to an impairment of all or a significant portion of the goodwill balance, which could materially affect our net earnings and net assets. The Company did not identify any indicators of impairment during 2023.
If general market conditions deteriorate in portions of our business, we could experience a significant decline in the fair value of our reporting units. This decline could lead to an impairment of all or a significant portion of the goodwill balance, which could materially affect our net earnings and net assets.
We are subject to stringent U.S. economic sanctions and trade control laws and regulations.
We are subject to trade control laws and regulations; including export controls and stringent U.S. economic sanctions, which could affect our ability to do business with certain customers.
Fair value measurement requires assumptions and estimates of many critical factors, including revenue and market growth, operating cash flows and discount rates.
The recoverability test of goodwill is based on the current fair value of our identified reporting units. Fair value measurement requires assumptions and estimates of many critical factors, including revenue and market growth, operating cash flows and discount rates. We have recorded and may record further impairment.
Since inception, we have incurred net losses and have used our cash to fund capital expenditures, costs associated with our acquisitions, and costs associated with the Merger, among other uses. We have and may continue to experience net cash outflows from operating activities as we continue to grow our business.
Our primary sources of liquidity are cash flows provided by operations and access to existing credit facilities. Since inception, we have incurred net losses and have used our cash to fund capital expenditures, costs associated with our acquisitions, and costs associated with the Merger, among other uses.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSuch providers are subject to security risk assessments at the time of onboarding, contract renewal, and upon detection of an increase in risk profile. We use a variety of inputs in such risk assessments, including information supplied by providers and third parties.
Biggest changeWe have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time of onboarding, contract renewal, and upon detection of an Page 38 increase in risk profile.
Despite our security measures, including employee training, our information technology and infrastructure are vulnerable to cyber-attacks, malicious intrusions, breakdowns, destruction, loss of data privacy, breaches due to employee error, Page 38 malfeasance or other disruptions and we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on our operations or financial results.
Despite our security measures, including employee training, our information technology and infrastructure are vulnerable to cyber-attacks, malicious intrusions, breakdowns, destruction, loss of data privacy, breaches due to employee error, malfeasance or other disruptions and we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on our operations or financial results.
Item 1C. Cybersecurity Risk Management and Strategy Redwire is committed to maintaining the trust and confidence of our stakeholders, which includes taking appropriate technical and organizational measures for maintaining information security and data privacy. Cybersecurity is critical to advancing our “Heritage Page 37 plus Innovation” strategy and enabling our digital transformation efforts.
Item 1C. Cybersecurity Risk Management and Strategy Redwire is committed to maintaining the trust and confidence of our stakeholders, which includes taking appropriate technical and organizational measures for maintaining information security and data privacy. Cybersecurity is critical to advancing our “Heritage plus Innovation” strategy and enabling our digital transformation efforts.
Similar to many other companies, we experience attempts to gain unauthorized access to our systems and information on a regular basis, and a number of our employees work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Similar to many other companies, we experience attempts to gain unauthorized access to our systems and information on a regular basis, and a number of our employees work remotely, which creates additional opportunities for cybercriminals to exploit vulnerabilities.
Our corporate information technology department, which maintains our cybersecurity function, is led by our Chief Information Officer (“CIO”), who reports to our Chief Financial Officer (“CFO”) and has direct access to the CEO regarding information technology and cybersecurity related matters.
Our corporate information technology department, which maintains our cybersecurity function, is led by our Chief Information Officer (“CIO”), who reports to our Chief Financial Officer (“CFO”) and has direct access to the CEO regarding information technology and cybersecurity related matters. The Chief Information Security Officer (“CISO”) reports to the CIO and has direct access to the CEO regarding cybersecurity matters.
Comprised of Company officers who serve across several functions, the incident response team includes the Company’s CISO, CIO, General Counsel, CFO, Senior VP and Chief Accounting Officer, and Cybersecurity and Compliance Director. Other employees from the Company’s information technology, finance, compliance and human resources functions support the incident response team, including with respect to diagnosing and mitigating cybersecurity events.
Comprised of Company officers who serve across several functions, the incident response team includes the Company’s CISO, CIO, General Counsel, CFO, Chief Accounting Officer, Cybersecurity Manager and cybersecurity professionals or other employees from the Company’s information technology, finance, compliance and human resources functions support the incident response team, including with respect to diagnosing and mitigating cybersecurity events.
Our cybersecurity policies and frameworks are based on industry and governmental standards to align closely with DoD requirements, instructions and guidance. The Company has adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and Zero Trust Framework.
Our cybersecurity policies and frameworks are based on industry and governmental standards to align closely with DoD requirements, instructions and guidance. The Company has adopted the National Institute of Standards and Technology (“NIST”) Special Procedure (SP) 800-171, NIST Cybersecurity Framework and Zero Trust Framework. The NIST SP 800-171 is to ensure compliance for protecting controlled unclassified information for U.S.
In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate.
We use a variety of inputs in such risk assessments, including information supplied by providers and third parties. In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate.
The Company utilizes the industry leading endpoint protection tool recognized by Gartner. We employ threat protection firewalls at our facilities and perform network and vulnerability monitoring with industry leading tools. We also work with trusted and leading third parties to help us assess and strengthen our information security program.
We utilize third-party tools to protect Redwire data and implemented the security and data protection technologies. The Company utilizes the industry leading endpoint protection tool recognized by Gartner. We employ threat protection firewalls at our facilities and perform network and vulnerability monitoring with industry leading tools.
We engage third-party services to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices to address new challenges. These evaluations include testing both the design and operational effectiveness of security controls. We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers.
We also work with trusted and leading third parties to help us assess and strengthen our information security program. We engage third-party services to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices to address new challenges. These evaluations include testing both the design and operational effectiveness of security controls.
The Company has implemented cybersecurity tools to enable a Zero Trust Network Access that includes an Internet Intrusion detection and response combined with an always-on virtual private network solution to reduce our external exposure. We utilize third-party tools to protect Redwire data and implemented the security and data protection technologies.
We evaluate our physical, electronic and administrative safeguards on a continuous basis to ensure they are effectively deployed across the business. The Company has implemented cybersecurity tools to enable a Zero Trust Network Access that includes an Internet Intrusion detection and response combined with an always-on virtual private network solution to reduce our external exposure.
The Chief Information Security Officer (“CISO”) reports to the CIO and is responsible for our Company’s information security strategy, policy, security engineering, operations and cyber threat detection and response. Our current CISO has extensive information technology, cybersecurity and project management experience, and has served in various information technology roles for over 35 years, including experience with three other public companies.
The CISO is responsible for our Company’s information security strategy, policy, security engineering, operations and cyber threat detection and response. Our current CIO and CISO have extensive information technology, cybersecurity and project management experience. Our CIO is a cyber defense, operations and communications officer as a U.S. Navy information professional.
The NIST Cybersecurity Framework models the best practices for security and the capabilities needed to identify, protect, detect and respond to cybersecurity risks and events, while the Zero Trust Framework addresses security challenges. We evaluate our physical, electronic and administrative safeguards on a continuous basis to ensure they are effectively deployed across the business.
Government projects as contractually required. The NIST Cybersecurity Framework models the best practices for security and the capabilities needed to identify, protect, detect and respond to cybersecurity risks and events, while the Zero Trust Framework addresses security challenges. The Company is pursuing the U.S. DoD Cybersecurity Maturity Model Certification (CMMC) in 2025.
Added
Our CISO has over 35 years in various information technology roles, including experience with three other public companies and is a certified information systems security professional (“CISSP”) and DoD information systems security manager.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn North America we have two facilities in California, four facilities in Colorado, two facilities in Florida, and one facility in Indiana, Massachusetts, New Mexico and Virginia, respectively. In Europe, we have one facility in Luxembourg and one in Belgium.
Biggest changeIn North America we have four facilities in California and Colorado, respectively, two facilities in Florida, and one facility in Indiana, Massachusetts, New Mexico and Virginia, respectively. In Europe, we have one facility in Luxembourg, Belgium and Poland, respectively.
Each of these facilities is strategically located near major national security or civil space community facilities, key customer facilities, commercial space centers and/or prestigious engineering talent pools. We believe that our properties are in good operating condition and believe the productive capacity of our properties is adequate to meet current contractual requirements and those for the foreseeable future.
Each of these facilities is strategically located near major national security or civil space community facilities, key customer facilities, commercial space centers and/or prestigious engineering talent pools. Page 39 We believe that our properties are in good operating condition and believe the productive capacity of our properties is adequate to meet current contractual requirements and those for the foreseeable future.
However, as we continue to grow, we plan to continue and even accelerate the pace of leasehold improvements so that our facility capacity is not a limiting factor on our growth. Expansion and reconfiguration of our existing facilities are also being studied to support further growth and cost optimization in the future. Page 39
However, as we continue to grow, we plan to continue and even accelerate the pace of leasehold improvements so that our facility capacity is not a limiting factor on our growth. Expansion and reconfiguration of our existing facilities are also being studied to support further growth and cost optimization in the future.
We lease all of our properties. The majority of leases are for varying term lengths up to nine years. Our locations range in size from 4,740 to 52,800 square feet. Our headquarters is located in Jacksonville, Florida, in proximity to major NASA and other space offices and operations.
We lease all of our properties. The majority of leases are for varying term lengths up to nine years. Our locations range in size from approximately 2,400 to 52,800 square feet. Our headquarters is located in Jacksonville, Florida, in proximity to major NASA and other space offices and operations.
Item 2. Properties We operate from 12 locations in the United States and 2 locations in Europe consisting of offices, warehouses, service centers, laboratories and other facilities approximating 363,213 square feet as of December 31, 2023. The Company also retains use of additional storage and administrative space as needed to support operations, which are not included in the table below.
Item 2. Properties We operate from 14 locations in the United States and 3 locations in Europe consisting of offices, warehouses, service centers, laboratories and other facilities approximating 393,000 square feet as of December 31, 2024. The Company also retains use of additional storage and administrative space as needed to support operations, which are not included in the table below.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor further information on the risks associated with existing and future investigations, lawsuits, arbitration, claims, enforcement actions and other legal proceedings, please refer to Item 1A. “Risk Factors.” Item 4. Mine Safety Disclosures Not Applicable. PART II
Biggest changeFor further information on the risks associated with existing and future investigations, lawsuits, arbitration, claims, enforcement actions and other legal proceedings, please refer to Item 1A. “Risk Factors.” Item 4. Mine Safety Disclosures Not Applicable. Page 40 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−2 removed3 unchanged
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers None. Page 40 Stock Performance Graph Not applicable. Item 6. [Reserved]
Biggest changeThe issuance is exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Stock Performance Graph Not applicable. Item 6. [Reserved]
Holders As of March 15, 2024, there were 37 holders of our common stock and 11 holders of our warrants of record. These numbers do not include an estimate of the indeterminate number of beneficial holders whose shares and warrants may be held by brokerage firms and clearing agencies.
Holders As of March 7, 2025, there were 23 holders of our common stock and 6 holders of our warrants of record. These numbers do not include an estimate of the indeterminate number of beneficial holders whose shares and warrants may be held by brokerage firms and clearing agencies.
Each warrant entitles the registered holder to purchase one share of our common stock at a price of $11.50 per share, subject to certain adjustments. As of March 15, 2024, there were 65,578,724 shares of common stock outstanding and 8,188,811 public warrants outstanding.
Each public warrant entitles the registered holder to purchase one share of our common stock at a price of $11.50 per share, subject to certain adjustments. As of March 7, 2025, there were 75,573,294 shares of common stock outstanding and 2,492,450 public warrants outstanding.
On May 1, 2023 and November 1, 2023, in accordance with the Convertible Preferred Stock Certificate of Designation, the Company issued 6,039.66 and 6,600.54 shares, respectively, of Series A Convertible Preferred Stock to holders of record as of April 15, 2023 and October 15, 2023, respectively, as a dividend paid-in-kind on the Convertible Preferred Stock.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings On May 1, 2024 and November 1, 2024, in accordance with the Convertible Preferred Stock Certificate of Designation, the Company issued 7,022.45 and 7,736.65 shares, respectively, of Series A Convertible Preferred Stock to holders of record as of April 15, 2024 and October 15, 2024, respectively, as a dividend paid-in-kind on the Convertible Preferred Stock.
Removed
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings On October 28, 2022 and November 3, 7 and 8, 2022, we issued a total of 81,250 shares of Series A Convertible Preferred Stock to AE Industrial Partners Fund II, LP (“AEI Fund II”) and AE Industrial Partners Structured Solutions I, LP (“AEI Structured Solutions”), affiliates of AEI, BCC Redwire Aggregator, L.P.
Removed
(“Bain Capital”) and certain other investors for aggregate proceeds of $81.3 million. These shares were issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+34 added−53 removed39 unchanged
Biggest changeResults of Operations For purposes of the following discussion and analysis, any financial impact related to the acquisition of Redwire Space NV (f/k/a QinetiQ Space NV) (“Space NV”) is referred to as the “Space NV Acquisition.” Page 41 Table of Contents Results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 The following table presents our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022: Year Ended $ Change from prior year period % Change from prior year period (in thousands, except percentages) December 31, 2023 % of revenues December 31, 2022 % of revenues Revenues $ 243,800 100 % $ 160,549 100 % $ 83,251 52 % Cost of sales 185,831 76 131,854 82 53,977 41 Gross margin 57,969 24 28,695 18 29,274 102 Operating expenses: Selling, general and administrative expenses 68,525 28 70,342 44 (1,817) (3) Transaction expenses 13 — 3,237 2 (3,224) (100) Impairment expense — — 96,623 60 (96,623) (100) Research and development 4,979 2 4,941 3 38 1 Operating income (loss) (15,548) (6) (146,448) (91) 130,900 (89) Interest expense, net 10,699 4 8,219 5 2,480 30 Other (income) expense, net 1,503 1 (16,075) (10) 17,578 (109) Income (loss) before income taxes (27,750) (11) (138,592) (86) 110,842 (80) Income tax expense (benefit) (486) — (7,972) (5) 7,486 (94) Net income (loss) (27,264) (11) (130,620) (81) 103,356 (79) Net income (loss) attributable to noncontrolling interests (1) — (3) — 2 (67) Net income (loss) attributable to Redwire Corporation $ (27,263) (11) % $ (130,617) (81) % $ 103,354 (79) % Revenues Revenues increased by $83.3 million, or 52%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Biggest changeResults of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023: Year Ended $ Change from prior year period % Change from prior year period (in thousands, except percentages) December 31, 2024 % of revenues December 31, 2023 % of revenues Revenues $ 304,101 100 % $ 243,800 100 % $ 60,301 25 % Cost of sales 259,646 85 185,831 76 73,815 40 Gross profit 44,455 15 57,969 24 (13,514) (23) Operating expenses: Selling, general and administrative expenses 71,398 23 68,525 28 2,873 4 Transaction expenses 9,129 3 13 — 9,116 70,123 Research and development 6,128 2 4,979 2 1,149 23 Operating income (loss) (42,200) (14) (15,548) (6) (26,652) 171 Interest expense, net 13,483 4 10,699 4 2,784 26 Other (income) expense, net 60,648 20 1,503 1 59,145 3,935 Income (loss) before income taxes (116,331) (38) (27,750) (11) (88,581) 319 Income tax expense (benefit) (2,020) (1) (486) — (1,534) 316 Net income (loss) (114,311) (38) (27,264) (11) (87,047) 319 Net income (loss) attributable to noncontrolling interests 4 — (1) — 5 (500) Net income (loss) attributable to Redwire Corporation $ (114,315) (38) % $ (27,263) (11) % $ (87,052) 319 % Revenues Revenues increased by $60.3 million, or 25%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Although contracted backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog. In addition, some of our multi-year contracts are subject to annual funding. Management fully expects all amounts reflected in contracted backlog to ultimately be fully funded.
Although contracted backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog. In addition, some of our multi-year contracts are subject to annual funding. Management expects all amounts reflected in contracted backlog to ultimately be fully funded.
Page 51 Table of Contents Private Warrants Classification of the Company’s private warrants is based on management’s analysis of the guidance in ASC 815, Derivatives and Hedging, and in a statement issued by the Staff of the Securities and Exchange Commission regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.” The Company determined that the private warrants meet the definition of a derivative and, therefore, are classified as a liability measured at fair value, subject to remeasurement at each reporting period.
Private Warrants Classification of the Company’s private warrants is based on management’s analysis of the guidance in ASC 815, Derivatives and Hedging, and in a statement issued by the Staff of the Securities and Exchange Commission regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.” The Company determined that the private warrants meet the definition of a derivative and, therefore, are classified as a liability measured at fair value, subject to remeasurement at each reporting period.
Supplemental Non-GAAP Information We use Adjusted EBITDA and Pro Forma Adjusted EBITDA to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources which are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and are considered to be Non-GAAP financial performance measures.
We use Adjusted EBITDA to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources which are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and are considered to be Non-GAAP financial performance measures.
The Company has four reporting units, Mission Solutions, Space Components, Engineering Services, and Redwire Europe, which were determined based on similar economic characteristics, financial metrics and product and servicing offerings. We may use both qualitative and quantitative approaches when testing goodwill and indefinite-lived intangible assets for impairment.
The Company has five reporting units, Mission Solutions, Space Components, Engineering Services, Hera Systems and Redwire Europe, which were determined based on similar economic characteristics, financial metrics and product and servicing offerings. We may use both qualitative and quantitative approaches when testing goodwill and indefinite-lived intangible assets for impairment.
In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.
In the event that we require additional financing, we may not be able to secure such financing on terms acceptable to us or at all.
Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, net, income tax expense (benefit), depreciation and amortization, impairment expense, acquisition deal costs, acquisition integration costs, acquisition earnout costs, purchase accounting fair value adjustment related to deferred revenue, severance costs, capital market and advisory fees, litigation-related expenses, write-off of long-lived assets, equity-based compensation, committed equity facility transaction costs, debt financing costs, and warrant liability change in fair value adjustments.
Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, net, income tax expense (benefit), depreciation and amortization, impairment expense, transaction expenses, acquisition integration costs, acquisition earnout costs, purchase accounting fair value adjustment related to deferred revenue, severance costs, capital market and advisory fees, litigation-related expenses, write-off of long-lived assets, equity-based compensation, committed equity facility transaction costs, debt financing costs, gains on sale of joint ventures, and warrant liability change in fair value adjustments.
Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). Our contracted backlog includes $19.3 million and $37.4 million in remaining contract value from T&M contracts as of December 31, 2023 and as of December 31, 2022, respectively.
Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). Our contracted backlog includes $16.7 million and $19.3 million in remaining contract value from T&M contracts as of December 31, 2024 and as of December 31, 2023, respectively.
Contracted backlog from foreign operations in Luxembourg and Belgium was $106.0 million and $129.9 million as of December 31, 2023 and December 31, 2022, respectively. These amounts are subject to foreign exchange rate translations from euros to U.S. dollars that could cause the remaining backlog balance to fluctuate with the foreign exchange rate at the time of measurement.
Contracted backlog from foreign operations in Luxembourg and Belgium was $70.5 million and $106.0 million as of December 31, 2024 and December 31, 2023, respectively. These amounts are subject to foreign exchange rate translations from euros to U.S. dollars that could cause the remaining backlog balance to fluctuate with the foreign exchange rate at the time of measurement.
The Company evaluates its intangible and long-lived Page 49 Table of Contents assets for impairment when events or changes in circumstances indicate that the carrying value of an asset or asset group may be impaired.
The Company evaluates its intangible and long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of an asset or asset group may be impaired.
The table below presents a reconciliation of Adjusted EBITDA and Pro Forma Adjusted EBITDA to net income (loss), computed in accordance with U.S.
The table below presents a reconciliation of Adjusted EBITDA to net income (loss), computed in accordance with U.S.
There can be no assurance that any of Page 46 Table of Contents these actions will be sufficient to allow us to service our debt obligations, meet our debt covenants, or that such actions will not result in an adverse impact on our business.
There can be no assurance that any of these actions will be sufficient to allow us to adequately service our debt obligations, meet our debt covenants, or that such actions will not result in an adverse impact on our business.
We base our assumptions, judgments and estimates on historical experience and various other factors Page 48 Table of Contents that we believe are reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.
We base our assumptions, judgments and estimates on historical experience and various other factors that we believe are reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.
Because not all companies use identical calculations, Page 43 Table of Contents our presentation of Non-GAAP measures may not be comparable to other similarly titled measures of other companies.
Because not all companies use identical calculations, our presentation of Non-GAAP measures may not be comparable to other similarly titled measures of other companies.
The increase in proceeds received from debt was driven primarily by increased draws from the Adams Street Revolving Credit Facility during the year ended December 31, 2023 compared to the same period in 2022. Foreign Currency Exposures Our operations in Belgium and Luxembourg conduct transactions that are primarily denominated in euros, which limits our foreign currency exposure.
The increase in proceeds received from debt was driven primarily by increased draws from the Adams Street Revolving Credit Facility during the year ended December 31, 2024, compared to 2023. Foreign Currency Exposures Our operations in Europe conduct transactions that are primarily denominated in euros, which limits our foreign currency exposure.
Our ability to fund our cash needs is dependent upon the successful execution of our business strategy and future operating results.
Page 47 Table of Contents Our ability to fund our cash needs is dependent upon the successful execution of our business strategy and future operating results.
Actual results could differ from these assumptions. During 2023, the Company performed its annual impairment tests for each of our reporting units and concluded there were no indicators that the fair value was more likely than not below carrying value. Therefore, no quantitative assessment was performed and no goodwill impairment was recognized during 2023.
Actual results could differ from these assumptions. Page 50 Table of Contents During 2024 and 2023, the Company performed its annual impairment tests for each of our reporting units and concluded there were no indicators that the fair value was more likely than not below carrying value.
As part of our business and debt management strategy, we continuously evaluate opportunities to further strengthen our financial and liquidity position, including the issuance of additional equity or debt securities, refinance or otherwise restructure our existing credit facilities, or enter into new financing arrangements.
As part of our business and debt management strategy, we continuously evaluate opportunities to further strengthen our financial and liquidity position, including issuing additional equity or debt securities, refinancing or otherwise restructuring our existing credit facilities, or entering into new financing arrangements.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Item 1A.
Certain information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Item 1A.
Book-to-Bill Our book-to-bill ratio was as follows for the periods presented: Last Twelve Months (in thousands, except ratio) December 31, 2023 December 31, 2022 Contracts awarded $ 300,042 $ 327,035 Revenues 243,800 160,549 Book-to-bill ratio 1.23 2.04 Book-to-bill is the ratio of total contracts awarded to revenues recorded in the same period.
Book-to-Bill Our book-to-bill ratio was as follows for the periods presented: Last Twelve Months (in thousands, except ratio) December 31, 2024 December 31, 2023 Contracts awarded $ 229,789 $ 300,042 Revenues 304,101 243,800 Book-to-bill ratio 0.76 1.23 Book-to-bill is the ratio of total contracts awarded to revenues recorded in the same period.
Please refer to Note D – Fair Value of Financial Instruments of the accompanying notes to the consolidated financial statements for additional information related to the private warrants and committed equity facility.
Please refer to Note N – Commitments and Contingencies and Note D – Fair Value of Financial Instruments of the accompanying notes to the consolidated financial statements for additional information related to litigation matters and private warrants, respectively.
Revenue from T&M contracts is recognized based on the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other direct billable costs.
The Company recognizes revenue for performance obligations over time using the cost-to-cost method for FFP and CPFF contracts. Revenue from T&M contracts is recognized based on the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other direct billable costs.
Finite-lived intangible assets and long-lived assets are amortized to expense over their estimated useful life on a straight-line basis or over the period the economic benefits of the intangible asset are consumed.
Therefore, no quantitative assessment was performed and no goodwill impairment was recognized during 2024 and 2023, respectively. Finite-lived intangible assets and long-lived assets are amortized to expense over their estimated useful life on a straight-line basis or over the period the economic benefits of the intangible asset are consumed.
Page 47 Table of Contents Cash Flows The table below summarizes certain information from the consolidated statements of cash flows for the following periods: Year Ended (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents at beginning of year $ 28,316 $ 20,523 Operating activities: Net income (loss) (27,264) (130,620) Non-cash adjustments 21,700 94,900 Changes in working capital 6,795 4,063 Net cash provided by (used in) operating activities 1,231 (31,657) Net cash provided by (used in) investing activities (8,327) (37,382) Net cash provided by (used in) financing activities 9,060 76,560 Effect of foreign currency rate changes on cash and cash equivalents (2) 272 Net increase (decrease) in cash and cash equivalents 1,962 7,793 Cash and cash equivalents at end of period $ 30,278 $ 28,316 Operating activities Net cash provided by operating activities was $1.2 million during the year ended December 31, 2023, as compared to net cash used in operating activities of $31.7 million during the same period in 2022, resulting in a $32.9 million decrease in the use of cash year-over-year.
Page 48 Table of Contents Cash Flows The table below summarizes certain information from the consolidated statements of cash flows for the following periods: Year Ended (in thousands) December 31, 2024 December 31, 2023 Cash, cash equivalents and restricted cash at beginning of year $ 30,278 $ 28,316 Operating activities: Net income (loss) (114,311) (27,264) Reconciling adjustments to net income (loss) 75,006 21,700 Changes in working capital 21,957 6,795 Net cash provided by (used in) operating activities (17,348) 1,231 Net cash provided by (used in) investing activities (7,199) (8,327) Net cash provided by (used in) financing activities 43,716 9,060 Effect of foreign currency rate changes on cash, cash equivalents and restricted cash (376) (2) Net increase (decrease) in cash, cash equivalents and restricted cash 18,793 1,962 Cash, cash equivalents and restricted cash at end of period $ 49,071 $ 30,278 Operating activities Net cash used in operating activities was $17.3 million during the year ended December 31, 2024 compared to net cash provided by operating activities of $1.2 million, resulting in a $18.6 million increase in the use of cash year-over-year.
This year-over-year decrease was primarily due to a $2.0 million loss as a result of an increase in the fair value of the Company’s private warrant liability for the year ended December 31, 2023 as compared to $17.8 million gain for the comparable period in 2022.
This year-over-year increase was primarily due to a $52.0 million loss as a result of an increase in the fair value of the Company’s private warrant liability for the year ended December 31, 2024 as compared to a $2.0 million loss during the same period in 2023, driven by a larger increase in the Company’s common stock price during the year ended December 31, 2024 as compared to the increase during 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in this Annual Report on Form 10-K. Certain information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis is provided as a supplement to, and should be read in conjunction with the consolidated financial statements and accompanying notes included in this Annual Report on Form 10-K.
Organic revenue includes revenue earned during the period presented for those entities treated as organic, while acquisition-related revenue includes the same for all other entities, excluding any pre-acquisition revenue earned during the period. There is no acquisition-related backlog activity presented in the table above as all acquired entities have completed four fiscal quarters post-acquisition.
Organic revenue includes revenue earned during the period presented for those entities treated as organic, while acquisition-related revenue includes the same for all other entities, excluding any pre-acquisition revenue earned during the period. The acquisition-related backlog activity presented in the table above is related to the Hera Systems acquisition completed during third quarter of 2024.
Please refer to Note M – Income Taxes of the accompanying notes to the consolidated financial statements for additional information. Net Income (Loss) Attributable to Noncontrolling Interests The net income (loss) attributable to noncontrolling interests for the year ended December 31, 2023 remained materially consistent as compared with the same period in 2022.
Please refer to Note M – Income Taxes of the accompanying notes to the consolidated financial statements for additional information. Net Income (Loss) Attributable to Noncontrolling Interests The net income (loss) attributable to noncontrolling interests for the year ended December 31, 2024 and 2023 was de minimis.
Redwire incurred acquisition costs including due diligence, integration costs and additional expenses related to pre-acquisition activity. ii. Redwire recorded adjustments related to the impact of recognizing deferred revenue at fair value as part of the purchase accounting for previous acquisitions. iii. Redwire incurred severance costs related to separation agreements entered into with former employees. iv.
Redwire incurred acquisition costs including due diligence, integration costs and additional expenses related to pre-acquisition activity. Acquisition deal costs was reclassified as Transaction expenses to conform with current period presentation. Page 45 Table of Contents ii. Redwire recorded adjustments related to the impact of recognizing deferred revenue at fair value as part of the purchase accounting for previous acquisitions. iii.
Other (Income) Expense, net Other (income) expense, net decreased from net other income to net other expense by $17.6 million, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Other (Income) Expense, net Other (income) expense, net increased by $59.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
GAAP for the following periods: Year Ended (in thousands) December 31, 2023 December 31, 2022 Net income (loss) $ (27,264) $ (130,620) Interest expense, net 10,699 8,220 Income tax expense (benefit) (486) (7,972) Depreciation and amortization 10,724 11,288 Impairment expense — 96,623 Acquisition deal costs (i) 13 3,237 Acquisition integration costs (i) 546 3,915 Purchase accounting fair value adjustment related to deferred revenue (ii) 15 139 Severance costs (iii) 313 1,311 Capital market and advisory fees (iv) 8,607 5,547 Litigation-related expenses (v) 1,235 2,877 Equity-based compensation (vi) 8,658 10,786 Committed equity facility transaction costs (vii) 259 1,364 Debt financing costs (viii) 17 102 Warrant liability change in fair value adjustment (ix) 2,011 (17,784) Adjusted EBITDA 15,347 (10,967) Pro forma impact on Adjusted EBITDA (x) — 3,932 Pro Forma Adjusted EBITDA $ 15,347 $ (7,035) i.
GAAP for the following periods: Year Ended (in thousands) December 31, 2024 December 31, 2023 Net income (loss) $ (114,311) $ (27,264) Interest expense, net 13,483 10,699 Income tax expense (benefit) (2,020) (486) Depreciation and amortization 11,692 10,724 Transaction expenses (i) 9,129 13 Acquisition integration costs (i) 609 546 Purchase accounting fair value adjustment related to deferred revenue (ii) — 15 Severance costs (iii) 867 313 Capital market and advisory fees (iv) 6,703 8,607 Litigation-related expenses (v) 11,011 1,235 Equity-based compensation (vi) 11,326 8,658 Committed equity facility transaction costs (vii) — 259 Debt financing costs (viii) — 17 Gain on sale of joint ventures, net of costs incurred (ix) (1,255) — Warrant liability change in fair value adjustment (x) 51,960 2,011 Adjusted EBITDA $ (806) $ 15,347 i.
(in thousands) December 31, 2023 December 31, 2022 Organic backlog, beginning balance $ 313,057 $ 139,742 Organic additions during the period 300,042 327,035 Organic revenue recognized during the period (243,800) (160,549) Foreign currency translation 3,491 6,829 Organic backlog, ending balance 372,790 313,057 Acquisition-related contract value, beginning balance — — Acquisition-related backlog, ending balance — — Contracted backlog, ending balance $ 372,790 $ 313,057 We view growth in backlog as a key measure of our business growth.
(in thousands) December 31, 2024 December 31, 2023 Organic backlog, beginning balance $ 372,790 $ 313,057 Organic additions during the period 207,704 300,042 Organic revenue recognized during the period (297,699) (243,800) Foreign currency translation (1,826) 3,491 Organic backlog, ending balance 280,969 372,790 Acquisition-related contract value, beginning balance — — Acquisition-related contract value acquired during the period 21,940 — Acquisition-related additions during the period 145 — Acquisition-related revenue recognized during the period (6,402) — Acquisition-related backlog, ending balance 15,683 — Contracted backlog, ending balance $ 296,652 $ 372,790 We view growth in backlog as a key measure of our business growth.
Page 45 Table of Contents Backlog The following table presents our contracted backlog as of December 31, 2023 and December 31, 2022, and related activity for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
For the LTM ended December 31, 2023, none of the contracts awarded balance relates to acquired contract value. Page 46 Table of Contents Backlog The following table presents our contracted backlog as of December 31, 2024 and December 31, 2023, and related activity for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
If the asset or asset group’s carrying value exceed the sum of undiscounted cash flows, the Company records an impairment loss equal to the excess of carrying amount over the estimated fair value of the asset or asset group. During 2023, the Company identified no triggering events and therefore, no impairment assessment was performed on its intangible and long-lived assets.
If the asset or asset group’s carrying value exceed the sum of undiscounted cash flows, the Company records an impairment loss equal to the excess of carrying amount over the estimated fair value of the asset or asset group.
However, changes in exchange rates will affect the Company’s consolidated financial statements as expressed in U.S. dollars. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in conformity with U.S. GAAP, which requires us to make estimates, assumptions and judgments that affect the amounts reported in our consolidated financial statements and accompanying notes to the consolidated financial statements.
However, changes in exchange rates will affect the Company’s consolidated financial statements as expressed in U.S. dollars. Page 49 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in conformity with U.S.
Please refer to Note J – Debt of the accompanying notes to the consolidated financial statements for additional information related to the Company’s debt obligations.
This increase was primarily related to an increase in borrowings on the revolving credit facility compared to 2023. Please refer to Note J – Debt of the accompanying notes to the consolidated financial statements for additional information related to the Company’s debt obligations.
Gross Margin Gross margin increased $29.3 million, or 102%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. As a percentage of revenues, gross margin was 24% and 18% for the year ended December 31, 2023 and 2022, respectively.
Page 43 Table of Contents Gross Profit and Margin Gross profit decreased $13.5 million, or 23%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023. As a percentage of revenues, gross margin was 15% and 24% for the year ended December 31, 2024 and 2023, respectively.
The change was primarily due to a decrease of $30.2 million in cash used related to the Company’s net loss and non-cash adjustments for the year ended December 31, 2023 in comparison to the same period in 2022 and an increase in cash provided by working capital related to increases in deferred revenue of $22.7 million partially offset by an increase in contract assets and accounts receivable of $5.4 million and $5.6 million, respectively, and a decrease in accounts payable and accrued expenses of $3.3 million.
The change was primarily due to an increase of $87.0 million in cash used related to the Company’s net loss for the year ended December 31, 2024 in comparison to 2023, partially offset by an increase in cash provided by working capital of $15.2 million and increase of $53.3 million in the effects of non-cash adjustments.
Recent Developments During the year ended December 31, 2023, the Company continued to deliver improved operations and financial performance year-over-year. • Revenues increased 52% for the year ended December 31, 2023 compared to the same period in 2022. • Selling, general and administrative expenses as a percentage of revenues decreased to 28% for the year ended December 31, 2023 from 44% during the same period in 2022. • Net loss decreased 79% for the year ended December 31, 2023 compared to the same period in 2022. • Net cash provided by operating activities was $1.2 million during the year ended December 31, 2023, as compared to net cash used in operating activities of $31.7 million during the same period in 2022. • Contracted backlog increased year-over-year to $372.8 million as of December 31, 2023, as compared to $313.1 million as of December 31, 2022.
Recent Developments Selected year-over-year financial performance metrics and operational developments for the year ended December 31, 2024, are described below. • Revenues increased 25% for the year ended December 31, 2024 compared to the same period in 2023. • Selling, general and administrative expenses as a percentage of revenues decreased to 23% for the year ended December 31, 2024 from 28% during the same period in 2023. • Net loss increased by $87.0 million for the year ended December 31, 2024 compared to the same period in 2023, impacted by $17.7 million of net unfavorable EAC changes and $52.0 million of non-cash loss related to change in fair value of private warrants. • Net cash used by operating activities was $17.3 million during the year ended December 31, 2024, as compared to net cash provided by operating activities of $1.2 million during the same period in 2023. • Contracted backlog decreased year-over-year to $296.7 million as of December 31, 2024, as compared to $372.8 million as of December 31, 2023. • The Company completed its tenth acquisition in August 2024 of Hera Systems, Inc.
Income Tax Expense (Benefit) The table below provides information regarding our income tax expense (benefit) for the following periods: Year Ended (in thousands, except percentages) December 31, 2023 December 31, 2022 Income tax expense (benefit) $ (486) $ (7,972) Effective tax rate 1.8 % 5.8 % The decrease in our effective tax rate for the year ended December 31, 2023, as compared to the year ended December 31, 2022 is primarily due to the change in the fair market valuation of warrants, change in the valuation allowance, and the non-recurring impact of the non-deductible impairment of goodwill.
Income Tax Expense (Benefit) The table below provides information regarding our income tax expense (benefit) for the following periods: Year Ended (in thousands, except percentages) December 31, 2024 December 31, 2023 Income tax expense (benefit) $ (2,020) $ (486) Effective tax rate 1.7 % 1.8 % Page 44 Table of Contents The effective tax rate for the year ended December 31, 2024 remained materially consistent as compared to the year ended December 31, 2023.
Please refer to Note T – Impairment Expense of the accompanying notes to the consolidated financial statements for additional information. Research and Development Research and development expenses for the year ended December 31, 2023 remained materially consistent as compared with the same period in 2022.
Please refer to Note X – Subsequent Events of the accompanying notes to the consolidated financial statements for additional information related to the subsequent acquisition. Research and Development Research and development expenses increased $1.1 million, or 23%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Riley, which includes consideration paid to enter into the Purchase Agreement as well as changes in fair value recognized as a gain or loss during the respective periods. viii. Redwire incurred expenses related to debt financing agreements, including amendment related fees paid to third parties that are expensed in accordance with U.S. GAAP. Page 44 Table of Contents ix.
Redwire incurred expenses related to equity-based compensation under Redwire’s equity-based compensation plan. vii. Redwire incurred expenses related to the committed equity facility with B. Riley, which includes consideration paid to enter into the Purchase Agreement as well as changes in fair value recognized as a gain or loss during the respective periods. viii.
Contractual Obligations The following table presents our contractual obligations as of December 31, 2023: 2024 2025 2026 2027 2028 Thereafter Total Adams Street Term Loan $ 310 $ 310 $ 29,902 $ — $ — $ — $ 30,522 Adams Street Delayed Draw Term Loan 150 150 14,469 — — — 14,769 Adams Street Incremental Term Loan 320 320 30,948 — — — 31,588 Adams Street Revolving Credit Facility — — 12,000 — — — 12,000 2022 D&O Financing Loan 598 — — — — — 598 Total long-term debt maturities 1,378 780 87,319 — — — 89,477 Future minimum operating lease payments 4,582 4,098 3,509 3,371 1,852 1,572 18,984 Future minimum finance lease payments 564 479 363 289 136 — 1,831 Total contractual obligations $ 6,524 $ 5,357 $ 91,191 $ 3,660 $ 1,988 $ 1,572 $ 110,292 As of December 31, 2023, the Company entered into an economic development agreement to serve as the anchor tenant at the Novaparke Innovation & Technology Campus in Floyd County, Indiana.
Contractual Obligations The following table presents our contractual obligations as of December 31, 2024: 2025 2026 2027 2028 2029 Thereafter Total Adams Street Term Loan $ 310 $ 29,902 $ — $ — $ — $ — $ 30,212 Adams Street Delayed Draw Term Loan 150 14,469 — — — — 14,619 Adams Street Incremental Term Loan 320 30,948 — — — — 31,268 Adams Street Revolving Credit Facility — 50,000 — — — — 50,000 D&O Financing Loan 486 — — — — — 486 Total long-term debt maturities 1,266 125,319 — — — — 126,585 Future minimum operating lease payments 5,485 4,545 4,366 2,861 1,836 2,858 21,951 Future minimum finance lease payments 571 462 382 218 42 — 1,675 Total contractual obligations $ 7,322 $ 130,326 $ 4,748 $ 3,079 $ 1,878 $ 2,858 $ 150,211 During the year ended December 31, 2023, the Company entered into an economic development agreement to serve as the anchor tenant at the Novaparke Innovation & Technology Campus in Floyd County, Indiana, the construction of which is anticipated to be completed during fiscal year 2025.
This was partially offset by an increase in net proceeds received from debt $10.0 million during the year ended December 31, 2023 compared to net repayments of $1.0 million in the same period in 2022.
Financing activities Net cash provided by financing activities increased by $34.7 million during the year ended December 31, 2024, as compared to 2023. The change was primarily due to an increase in net proceeds received from debt of $37.1 million during the year ended December 31, 2024, compared to $10.0 million in 2023 and advances from third-parties of $7.8 million.
For the periods presented, the pro forma impact included the results of Space NV. Key Performance Indicators The following Key Performance Indicators (“KPIs”) are used by Management to assess the financial performance of the Company, monitor relevant trends and support financial, operational and strategic decision-making.
Redwire adjusted the private warrant liability to reflect changes in fair value recognized as a gain or loss during the respective periods. Key Performance Indicators The following Key Performance Indicators (“KPIs”) are used by Management to assess the financial performance of the Company, monitor relevant trends and support financial, operational and strategic decision-making.
Revenue Recognition The Company engages in long-term contracts, including firm fixed-price (“FFP”), cost-plus fixed fee (“CPFF”) and T&M for production and service activities. The Company recognizes revenue for performance obligations over time using the cost-to-cost method for FFP and CPFF contracts.
During 2024 and 2023, the Company identified no triggering events and therefore, no impairment assessment was performed on its intangible and long-lived assets. Revenue Recognition The Company engages in long-term contracts, including firm fixed-price (“FFP”), cost-plus fixed fee (“CPFF”) and T&M for production and service activities.
Redwire’s primary business model is providing mission critical solutions based on core space infrastructure offerings for government and commercial customers through long-duration projects.
Redwire’s primary business model is providing mission critical solutions based on core space infrastructure offerings for government and commercial customers through long-duration projects. We are developing critical space infrastructure that is impacting our Page 41 Table of Contents terrestrial economy in areas, such as national security, global defense, telecommunications, navigation and timing, and Earth observation.
Our book-to-bill ratio was 1.23 for the LTM ended December 31, 2023, as compared to 2.04 for the LTM ended December 31, 2022. For the LTM ended December 31, 2023, none of the contracts awarded balance relates to acquired contract value.
Our book-to-bill ratio was 0.76 for the LTM (“Last Twelve Months”) ended December 31, 2024, as compared to 1.23 for the LTM ended December 31, 2023. For the LTM ended December 31, 2024, contracts awarded includes $21.9 million of acquired contract value from the Hera Systems acquisition, which was completed in the third quarter of 2024.
As of December 31, 2023, we had $30.3 million in cash and cash equivalents and $18.0 million in available borrowings from our existing credit facilities.
Liquidity and Capital Resources Our operations are primarily funded with cash flows provided by operating activities and access to existing credit facilities. As of December 31, 2024, we had $33.7 million in cash and cash equivalents and $15.0 million in available borrowings from our existing credit facilities.
The year-over-year decrease in SG&A expenses as a percentage of revenue was primarily driven by a decrease in share-based compensation and legal expenses of $2.2 million and $1.6 million, respectively. This decrease also reflects the Company’s continued focus on cost discipline and streamlining corporate overhead costs to enhance operating leverage.
SG&A expenses a s a percentage of revenues decreased to 23% for the year ended December 31, 2024 from 28% during the same period in 2023. This decrease reflects the Company’s continued focus on cost discipline and streamlining corporate overhead costs to enhance operating leverage.
The year-over-year increase in gross margin was primarily driven by an increase in large fixed-price contract awards as a percentage of revenues, completion of low gross margin contracts to improve the overall contract portfolio gross margin and gross margin contributions from the Space NV Acquisition.
The year-over-year decrease in gross margin as a percentage of revenues was driven by changes in contract mix, including larger contracts with lower margins and completion of certain higher margin contracts, impacting the overall contract portfolio gross margin.
The year-over-year increase in revenues was driven by an increase of $43.3 million in contributed revenue from the Space NV Acquisition. Additionally, the increase was partially due to changes in contract mix, increase in average contract size and increased volume of production in the power generation and microgravity payloads.
The year-over-year increase in revenues was primarily related to increases in average contract size and increased volume of production in the power generation and structures and mechanisms space infrastructure offerings.
Selling, General and Administrative (“SG&A”) Expenses SG&A expenses decreased $1.8 million , or 3%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. As a percentage of revenues, SG&A expenses were 28% and 44% for the year ended December 31, 2023 and 2022, respectively.
Please refer to Note Q – Revenues of the accompanying notes to the consolidated financial statements for additional information related to the Company’s net EAC adjustments. Selling, General and Administrative (“SG&A”) Expenses SG&A expenses increased $2.9 million , or 4%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Investing activities Net cash used in investing activities decreased $29.1 million for the year ended December 31, 2023 as compared to the same period in 2022. The decrease is primarily due to $33.2 million of cash used for the acquisition of Space NV in 2022, for which there is no comparable activity for the year ended December 31, 2023.
Please refer to Note D – Fair Value of Financial Instruments of the accompanying notes to the consolidated financial statements for additional information related to the fair value of warrants. Investing activities Net cash used in investing activities decreased by $1.1 million for the year ended December 31, 2024, as compared to the same period in 2023.
The changes in contract assets, accounts receivable and deferred revenue were primarily driven by the timing of billable milestones during the year ended December 31, 2023 compared to the same period in 2022. The decrease in accounts payable and accrued expenses is primarily a result of timing of payments and invoice receipt.
Please refer to Note N – Commitments and Contingencies of the accompanying notes to the consolidated financial statements for additional information related to litigation matters. The changes in contract assets were primarily driven by the timing of billable milestones during the year ended December 31, 2024 compared to 2023.
Interest Expense, net Interest expense, net increased $2.5 million, or 30%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
The increase was primarily due to strategic decisions to invest in future developments related to avionics, sensors and platforms, structures and mechanisms, power generation technologies and microgravity payloads. Interest Expense, net Interest expense, net increased $2.8 million, or 26%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
These cost savings were partially offset by $12.8 million of contributed SG&A expenses from the Space NV Acquisition. Transaction Expenses Transaction expenses decreased $3.2 million or 100% for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
These increases were partially offset by $17.7 million of net unfavorable EAC adjustments for the year ended December 31, 2024 as compared to $3.5 million of net unfavorable EAC adjustments for the same period in 2023.
Cost of Sales Cost of sales increased $54.0 million, or 41%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The year-over-year increase in cost of sales was primarily driven by increased costs associated with revenue growth for the period and $36.7 million of contributed cost of sales from the Space NV Acquisition.
The year-over-year increase in cost of sales was primarily driven by increased labor and subcontractor costs associated with larger contracts in power generation offerings for which there were no related costs during the same period in 2023.
Removed
Macroeconomic Environment We continue to evaluate the ongoing impact of adverse macroeconomic conditions including, among others, heightened inflation, rising interest rates, volatility in capital markets, supply chain disruptions, and regulatory challenges that have affected the Company’s cost of capital, financial condition and results of operations.
Added
(“Hera”), a spacecraft development company supporting the evolving requirements for national security missions operating in contested space. • The Company expanded its global footprint and opened new facilities in California and Poland (Redwire Poland sp z.o.o.), respectively. • The Company was awarded the Air Force Research Laboratory (“AFRL”) contract to advance enhanced space-based capabilities for the warfighter. • The Company provided the onboard computer for ESA’s PROBA-3 mission and completed the spacecraft integration and testing, which launched in December 2024. • The Company successfully 3D-bioprinted the first live human heart tissue through our 3D BioFabrication Facility onboard the ISS. • The Company secured a follow-on order for Roll-Out Solar Arrays (“ROSA”) for Thales Alenia Space’s telecommunications satellites. • The Company expanded its spacecraft portfolio to 5 platforms for missions across every orbit: SabreSate; Thresher; Mako; Phantom and Hammerhead.
Removed
During 2022, inflation and supply chain pressures adversely impacted the Company’s schedule of various programs and increased production costs, which impacted our revenues and gross margins. While the direct impact of the macroeconomic factors described above was limited during the year ended December 31, 2023, its long-term impacts on the business remain uncertain.
Added
Subsequent to December 31, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which the Company agreed to acquire Edge Autonomy Intermediate Holdings, LLC, a Delaware limited liability company (together with its subsidiaries, “Edge Autonomy”) through a series of mergers set forth in the Merger Agreement, for an aggregate purchase price of $925 million, subject to customary working capital, cash and debt adjustments.
Removed
The transaction expenses incurred during the year ended December 31, 2022 were primarily related to the Page 42 Table of Contents Redwire Space Technologies, Inc. (f/k/a Techshot, Inc.) and Space NV acquisitions while there were nominal expenses incurred during the year ended December 31, 2023.
Added
Edge Autonomy is a leading provider of field-proven uncrewed airborne system technology. Please refer to Note X – Subsequent Events of the accompanying notes to the consolidated financial statements for additional information related to the subsequent acquisition.
Removed
Impairment Expense Impairment expense decreased $96.6 million or 100% for the year ended December 31, 2023, as compared to the year ended December 31, 2022. There was no impairment charge recognized during the year ended December 31, 2023.
Added
Results of Operations We manage and assess our business based on performance on contracts, which are typically long-term and involves the design, development and manufacturing of our core offerings and related activities with varying delivery schedules. Therefore, the results of operations for a particular year, or year-over-year comparison may not be indicative of future operating results.
Removed
In comparison, during the year ended December 31, 2022, the Company performed an interim and annual quantitative impairment assessment, which resulted in a non-cash, pre- and post-tax impairment charge of $96.6 million. Of this amount, $13.1 million related to property and equipment, $2.7 million related to right-of-use assets, $30.9 million related to intangible assets and $49.9 million related to goodwill.
Added
Substantially all of our contracts are accounted for under the percentage-of-completion cost-to-cost method. As a result, revenues on contracts are recorded over time based on progress towards completion for a particular contract, including the estimate of the profit to be earned at completion.
Removed
This increase was primarily related to an increase in our cost of capital due to unfavorable changes in variable interest rates on the Company’s debt obligations and increased borrowings on the revolving credit facility compared to the same period in 2022.
Added
The following discussion of material changes in consolidated revenues should be read in tandem with the subsequent discussion of changes in consolidated cost of sales because changes in revenues are typically accompanied by a corresponding change in cost of sales due to the nature of the percentage-of-completion cost-to-cost method.
Removed
This was partially offset due to a reduction in other expense of $1.1 million in costs related to the committed equity facility, primarily due to non-recurring costs incurred to enter into the facility during 2022.
Added
Page 42 Table of Contents Net EAC Adjustments We record changes in costs estimated at completion (net EAC adjustments) using the cumulative catch-up method of accounting.
Removed
Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA further adjusted for the incremental Adjusted EBITDA that acquired businesses would have contributed for the periods presented if such acquisitions had occurred on January 1 of the year in which they occurred.
Added
Net EAC adjustments can have a significant effect on reported revenues and gross profit and the table below presents the aggregate amounts for the following periods: Year Ended (dollars in thousands) December 31, 2024 December 31, 2023 Gross favorable $ 12,062 $ 11,805 Gross unfavorable (29,758) (15,327) Total net EAC adjustments $ (17,696) $ (3,522) The Company evaluates the contract value and cost estimates at completion for performance obligations no less frequently than quarterly, and more frequently when circumstances significantly change.
Removed
Accordingly, historical financial information for the businesses acquired includes pro forma adjustments calculated in a manner consistent with the concepts of Article 8 of Regulation S-X, which are ultimately added back in the calculation of Adjusted EBITDA.
Added
Changes in contract estimates occur for a variety of reasons including, but not limited to, changes in contract scope, labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, volume assumptions, inflationary trends, and schedule and performance delays.
Removed
From March 2020 through December 31, 2023, the Company has completed nine acquisitions, and as such, we believe Pro Forma Adjusted EBITDA provides meaningful insights into the impact of strategic acquisitions as well as an indicative run rate of the Company’s future operating performance.
Added
We utilize information available to us at the time when revising our estimates and apply consistent judgement across the full portfolio of programs. Refer to Note Q – Revenues of the accompanying notes to the consolidated financial statements for additional information.
Removed
Redwire incurred expenses related to the 2021 Audit Committee investigation and resulting securities litigation as further described in Note N of the accompanying notes to the consolidated financial statements. vi. Redwire incurred expenses related to equity-based compensation under Redwire’s equity-based compensation plan. vii. Redwire incurred expenses related to the committed equity facility with B.
Added
Please refer to Note Q – Revenues of the accompanying notes to the consolidated financial statements for additional information related to the Company’s net EAC adjustments. Cost of Sales Cost of sales increased $73.8 million, or 40%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

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