BBAI 10-K & 10-Q changes, risk factors and insider trading
BigBear.ai Holdings, Inc. (also BBAI-WT) · NYSE · Services-Prepackaged Software · CIK 1836981 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “With the acquisition of Pangiam, a portion of our growth strategy is the market for biometrics activity. A significant commercial market for biometrics technology may not develop, and, even if it does, there can be no assurance our biometrics technology will be successful.”
New heading “The Company is subject to risks relating to evaluations of internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.”
New heading “We are no longer subject to certain reporting exemptions for “emerging growth companies” and will incur additional costs of reporting compliance”
Removed heading “We have business and customer relationships with certain entities who are stockholders or are affiliated with our directors, or both, and conflicts of interest may arise because of such relationships.”
Removed heading “We have identified a material weakness in our internal control over financial reporting that has resulted in the restatement of the Restated Financial Statements. If we are unable to remediate the material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in future material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.”
Removed heading “The future sales of shares of Common Stock by existing stockholders may adversely affect the market price of the Company’s Common Stock.”
Removed heading “The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.”
Removed heading “Although we are no longer a “controlled company” under the New York Stock Exchange (“NYSE”) rules, we may continue to rely on exemptions from certain corporate governance requirements during a one-year transition period.”
Removed heading “The future exercise of registration rights may adversely affect the market price of our Common Stock.”
Largest changes
“We have identified a material weakness in our internal control over financial reporting that has resulted in the restatement of the Restated Financial Statements. …”see in full comparison
“Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings. …”see in full comparison
Our business depends on the economic health of our current and prospective customers and overall demand for technology. In addition, the purchase of our software and services is often discretionary and typically involves a significant commitment of capital and other resources. Global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages and supply chain disruptions, inflation, interest rate fluctuations, bank failures and monetary supply shifts, as well as recession risks, which may continue for an extended period and which could result in our customer prospects and our existing customers experiencing slowdowns in their businesses, which in turn may result in reduced demand for our products, lengthening of sales cycles, loss of customers, and difficulties in collections. Our vendors and suppliers may experience, or may continue to experience, disruptions in their supply chains, which may result in service interruptions or additional operating expenses, and may increase the price at which our vendors and suppliers are willing to sell their products to us. Over the past two years, the United States, the EU, and the U.K. have experienced historically high levels of inflation. In response to high levels of inflation and recession fears, the U.S. Federal Reserve, the European Central Bank, and the Bank of England have raised, and may continue to raise, interest rates and implement fiscal policy interventions. Even if these interventions lower inflation, they may also reduce economic growth rates, create a recession, and have other similar effects. A further downturn in economic conditions, global political and economic uncertainty, a lack of availability of credit, a reduction in business confidence and activity, the curtailment of government or corporate spending, public health concerns or emergencies, financial market volatility, and other factors have in the past and may in the future affect the industries to which we sell our software and services. Our customers may suffer from reduced operating budgets, which could cause them to defer or forego purchases of our software or services. Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings. Uncertainty about global and regional economic conditions, including the ongoing conflicts in Ukraine, the Middle East, and Africa, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, lower prices for our software and services, material default rates among our customers, reduced sales of our software or services, and lower or no growth.see in full comparison
“In addition, many U.S. federal, state, and foreign government bodies and agencies have introduced, and are currently considering, additional laws and regulations, including related to the development and integration of AI, ML, and additional emerging data technologies while mitigating or controlling for bias and discrimination in the context of AI and ML. …”see in full comparison
“There continues to be significant uncertainty regarding these recent changes and potential future developments. Increased trade restrictions, tariffs or taxes on imports or exports relating to countries where we manufacture, source, or sell materials or products, could have a material adverse effect on our business and financial results. If we cannot find ways to mitigate the potential impacts from tariffs or trade restrictions successfully or in a timely manner, these additional tariffs and policies could have a significant impact on our business and results of operations. …”see in full comparison
“Since early 2025, the current presidential administration has signed a series of executive orders imposing sweeping tariffs on almost all imports into the United States, with certain tariffs already in effect and some which have been delayed. The administration has also stated plans to impose additional new tariffs or further increase or expand existing tariffs. …”see in full comparison
Full comparison: every changed paragraph (88)
•a significant commercial market for biometrics technology may not develop, and even if it does, there can be no assurance our biometrics technology will be successful;
•our existing debt and our ability to refinance it on more favorable terms;
•concentration of ownership among our existing executive officers, directors and their respective affiliates, which may prevent new investors from influencing significant corporate decisions;
•our internal controls over financial reporting, including our ability to remedy the identified material weakness as well as any potential future material weaknesses;
•our ability to integrate Pangiamacquisitions successfully and realize the estimate cost savings expected from the combined companies; and
•any failure to realize anticipated benefits of the Pangiam acquisition; and
We have incurred operating losses in the past, may incur operating losses in the future, and may not achieve or maintain profitability in the future.
We have incurred operating losses each year since our inception and may continue to incur net losses in the future. Our operating expenses may increase in the future as we optimize and grow our business, including, for example, via our sales and marketing efforts, continuing to invest in research and development, adding content and software features to our platform, expanding into new geographies and developing new products and features. These potential efforts and additional expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses. Our revenue may decline for a number of other reasons, including reduced demand for our products and services, increased competition, a decrease in the growth or reduction in size of our overall market, or if we cannot capitalize on strategic opportunities. If our revenue does not grow at a greater rate than our operating expenses, we will not be able to achieve and maintain profitability.
Although our revenue has increased in recent periods, there can be no assurances that revenue will continue to grow or do so at current rates, and you should not rely on the revenue of any prior quarterly or annual period as an indication of our future performance. Our revenue growth rate may decline in future periods. We may not achieve or maintain profitability in future periods or, if we are profitable, we may not fully achieve our profitability targets. In addition, while we remain focused on operating efficiently, we anticipate that our operating expenses will continue to increase in the future. As we continue to expand our business and the breadth of our operations, upgrade our infrastructure, hire additional employees, expand into new markets, invest in research and development, invest in sales and marketing, and incur costs associated with general administration, including expenses related to being a public company, we expect that our costs of revenue and operating expenses will continue to increase. Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our products and services from existing and new customers, a failure by us to continue capitalizing on growth opportunities including expansion into the commercial marketplace, strategic acquisitions, the wind down of significant contracts, terminations of existing contracts or failure to exercise existing options by our customers, our failure to execute on the existing backlog of customer contracts, the maturation of our business, and a contraction of our overall market, among others. If our revenue growth rate declines, our business, financial condition, and results of operations could be adversely affected.
We derive a significant portion of our revenue from existing customers that expand their relationships with us. Increasing the size and number of the deployments to our existing customers is a major part of our growth strategy. We may not be effective in executing this or any other aspect of our growth strategy. For example, revenue earned from customers contributing in excess of 10% of consolidated revenues werewas derived$65 frommillion fouror customers comprising 52%51% of revenue for the twelve months ended December 31, 2024.2025.
Each of our contracts with these customers includes termination for convenience provisions whereby the customer can unilaterally elect to terminate the contract. In the event of a termination, we may generally recover only our incurred or committed costs and settlement expenses and profit on work completed prior to the termination. Our 20242025 revenues from these significant customers were mainly earned from large multi-year contracts. As of December 31, 2024,2025, about $52$27 million of our approximate $418$248 million of total backlog is attributable to these significant customers. The contracts are estimated completionto datesbe forcompleted these contracts range from 2024 toduring 2026. Of the $52$27 million of backlog related to these significant customers as of December 31, 20242025, we expect to recognize approximately 98%100% of that amount as revenue by the end of 2025, with the remainder to be recognized as revenue by the end of 2027.2026. As a result, the contracts comprising our backlog may not result in actual revenue in any particular period or at all, and the actual revenue from such contracts may differ from our backlog estimates. The timing of receipt of revenues, if any, on projects included in backlog could change because many factors affect the scheduling of missions and adjustments to contracts may also occur. The failure to realize some portion of our backlog could adversely affect our revenues and gross margins. Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.
As of December 31, 2024 and December 31, 2023,2025, the total remaining deal value of the contracts that we had been awarded by, or entered into with, commercial and government customers, including existing contractual obligations and contract options available to those customers was approximately $418$248 million and $168 million, respectively.million.
•changes in the fair value of derivatives, including the convertible features of our 2029 Convertible Notes and our 2026 Convertible Notes, that are remeasured quarterly
We have provided and may continue to provide public guidance on expected results of operations for future periods. This guidance is comprised of forward-looking statements subject to risks and uncertainties, including the risks and uncertainties described in this Annual Report on Form 10-K and in our other public filings and public statements, and is based necessarily on assumptions we make at the time we provide such guidance. Our guidance may not always be accurate. We may also choose to withdraw guidance or lower guidance in future periods. If, in the future, our results of operations for a particular period do not meet guidance or the expectations of investment analysts, if we reduce guidance for future periods, or if we withdraw guidance, the market price of our common stock could decline significantly.
Our ability to compete in the highly competitive technology industry depends upon our ability to attract, motivate, and retain qualified personnel. We are highly dependent on the continued contributions of our management team, including their customer relationships, expertise in science and technology, business development experience, and innovative management in both public and private sectors. These contributions are integral to our growth and would be difficult to replace. Some of ourOur executive officers and key personnel are at-will employees and may terminate their employment relationship with us at any time. The loss of the services of our key personnel and any of our other executive officers, and our inability to find suitable replacements, could result in a decline in sales, delays in product development, and harm to our business and operations.
We have business and customer relationships with certain entities who are stockholders or are affiliated with our directors, or both, and conflicts of interest may arise because of such relationships.
Some of our customers and other business partners are affiliated with certain of our directors or hold shares of our capital stock, or both. For example, in July 2021, we entered into a Memorandum of Understanding (“MOU”) with Edge Autonomy (formerly UAV Factory), a company owned by AE Industrial Partners, whereby BigBear.ai will develop AI/ML capabilities for Edge Autonomy’s unmanned systems and components used in autonomous operations within the commercial and defense markets. We believe that the transactions and agreements that we have entered into with related parties are on terms that are at least as favorable as could reasonably have been obtained at such time from third parties. However, these relationships could create, or appear to create, potential conflicts of interest when our Board is faced with decisions that could have different implications for us and these other parties or their affiliates. In addition, conflicts of interest may arise between us and these other parties and their affiliates. The appearance of conflicts, even if such conflicts do not materialize, might adversely affect the public’s perception of us, as well as our relationship with other companies and our ability to enter into new relationships in the future, including with competitors of such related parties, which could harm our business and results of operations.
In the future, we may seek to raise or borrow additional funds to expand our product or business development efforts, make acquisitions or otherwise fund or grow our business and operations. As of December 31, 2024,2025, we had approximately $200.0$142.3 million of total indebtedness. Although we currently anticipate that our existing cash and cash equivalents will be sufficient to meet our cash needs for the next 12 months, additional funds may be required if our growth strategy does not develop as quickly as planned. If we require additional financing, we may not be able to obtain debt or equity financing on favorable terms, if at all. If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. If adequate funds are not available on acceptable terms, or at all, we may be unable to, among other things:
Our ability to raise additional capital may be significantly affected by general market conditions, the market price of our ordinary shares, our financial condition, uncertainty about the future commercial success of our products, regulatory developments, the status and scope of our intellectual property, any ongoing arbitration or litigation, our compliance with applicable laws and regulations and other factors, many of which are outside our control. Furthermore, the IndentureIndentures governing our 2029 Convertible Notes contain limitations on our ability to incur debt and issue preferred and/or disqualified stock. Accordingly, we cannot be certain that we will be able to obtain additional financing on favorable terms or at all. If we are unable to obtain needed financing on acceptable terms, or otherwise, we may not be able to implement our business plan, which could have a material adverse effect on our business, financial condition and results of operations, including a decline in the trading price of our ordinary shares. Any additional equity financings could result in additional dilution to our then existing stockholders. In addition, we may enter into additional financings that restrict our operations or adversely affect our ability to operate our business and, if we issue equity, debt or other securities to raise additional capital or restructure or refinance our existing indebtedness, the new equity, debt or other securities may have rights, preferences and privileges senior to those of our existing stockholders.
AI is enabled by or integrated into some of our software and is a significant and potentially growing element of our business. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. We have also incorporated AI into certain operations within our business, including by using our platforms for internal functions and have developed internal policies to govern AI use. AI algorithms may be flawed. Datasets may be insufficient, of poor quality, or contain biased information. Inappropriate or controversial data practices by data scientists, engineers, and end-users of our systems could impair the acceptance of AI solutions. The rapid evolution of AI and its evolving regulatory landscape may also require additional resources to develop, test and maintain our platforms and products to help ensure that AI is implemented appropriately in order to minimize unintended or harmful impact, which may be costly and may not produce the benefits and results that we expect. If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm. Some AI scenarios present ethical issues. Though our technologies and business practices are designed to mitigate many of these risks, if we enable or offer AI solutions that are controversial because of their purported or real impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm. We may experience negative consequences from our use of AI and ML within the Company and in our products and services. Our or our customers’ sensitive information could be leaked, disclosed, or revealed as a result or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies. Any sensitive information (including confidential competitive, proprietary, or personal data) that we input into a third-party generative AI/ML platform could be leaked or disclosed to others, including if sensitive information is used to train the third parties’ AI/ML model. Additionally, where an AI/ML model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AT/ML models may create flawed, incomplete or inaccurate outputs, some of which may appear correct. This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI/ML with bad inputs or logic), or if the logic of the AI/ML is flawed (a so-called “hallucination”). We may use AI/ML outputs to make certain decisions. Due to these potential inaccuracies or flaws, the model could be biased and could lead us to make decisions that could bias certain individuals and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits, including exposure to reputational and competitive harm, customer loss, and legal liability.
In addition, many U.S. federal, state, and foreign government bodies and agencies have introduced, and are currently considering, additional laws and regulations, including related to the development and integration of AI, ML, and additional emerging data technologies while mitigating or controlling for bias and discrimination in the context of AI and ML. For example, the California Privacy Protection Agency is currently in the process of finalizing regulations under the California Consumer Privacy Act (as amended by the California Privacy Rights Act) (“CCPA”), regarding the use of automated decision-making, and both California and Colorado have recently passed legislation (with similar legislation pending in Virginia) imposing transparency and disclosure requirements with respect to certain AI systems. Furthermore, in Europe, the Artificial Intelligence Act (“EU AI Act”), which became effective on August 1, 2024, categorizes AI systems based on risk, prohibits certain uses of AI effective February 2, 2025, and introduces strict requirements for high-risk AI applications beginning August 2, 2027. These frameworks, together with existing privacy and data protection requirements, including the GDPR’s restrictions on automated decision-making, continue to evolve. The privacy, data protection, and technology-related legal regimes that apply to our business, including those that govern AI and automated decision-making, are more fully described under the risk factor contained herein entitled “Our business is subject to complex and evolving U.S. and non-U.S. laws and regulations regarding privacy, data protection and security, technology protection, and other matters.” While we strive to minimize any physical bias in our product’s identification of threats because our product’s AI does not process or analyze an individual’s physical characteristics, we may not be able to identify such issues in advance, or if identified, we may not be able to identify mechanisms for effectively mitigating such issues.
With the acquisition of Pangiam, a portion of our growth strategy is the market for biometrics activity. A significant commercial market for biometrics technology may not develop, and, even if it does, there can be no assurance our biometrics technology will be successful.
A component of our strategy to grow our revenue includes expansion into commercial markets. To date, biometrics technology has received only limited acceptance and slow adoption in these markets. Although the recent appearance of biometric readers on popular consumer products, such as smartphones, has increased interest in biometrics as a means of authenticating and/or identifying individuals, commercial markets for biometrics technology are still developing and evolving. Biometrics-based solutions compete with more traditional security methods including keys, cards, personal identification numbers, passwords and security personnel. Acceptance of biometrics as an alternative to such traditional methods depends upon a number of factors including: i) the performance and reliability of biometric solutions; ii) costs involved in adopting and integrating biometric solutions; iii) public concerns regarding privacy; and iv) potential privacy legislation.
A significant number of established companies have developed or are developing and marketing software and hardware for biometrics products and applications that currently compete with or will compete directly with our offerings. We believe that additional competitors will enter the biometrics market and become significant long-term competitors, and that, as a result, competition will increase. Companies competing with us may introduce solutions that are competitively priced, have increased performance or functionality or incorporate technological advances we have not yet developed or implemented.
For these reasons, we are uncertain whether there will be significant demand for biometrics technology from commercial markets. Moreover, even if there is significant demand, there can be no assurance that our biometrics products will achieve market acceptance.
We depend on computing infrastructure operated by Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure, and other third parties and data centers to support some of our customers, and any errors, disruption, performance problems, or failure in their or our operational infrastructure could adversely affect our business, financial condition, and results of operations.
We have $119.1$241.1 million of goodwill assets recorded on our consolidated balance sheet as of December 31, 2024,2025, from previous acquisitions, which represents approximately 35%13% of our total assets as of the end of this period. These goodwill assets are subject to annual impairment testing and more frequent testing upon the occurrence of certain events or significant changes in circumstances that indicate goodwill may be impaired. If we experience changes or factors arise that negatively affect the expected cash flows of a reporting unit, we may be required to write off all or a portion of the reporting unit’s related goodwill. For example, during the first quarter of 2024, we recognized a non-cash goodwill impairment charge of $85.0 million related to the acquisition of Pangiam.Pangiam and 2025 year-to-date impairments of goodwill of $70.6 million. Business deterioration, contract cancellations or terminations, or market pressures could cause our sales, earnings and cash flows to decline below current projections and could cause goodwill and intangible assets to be impaired in the future. For fiscal 2025, our single reporting unit had limited headroom, meaning fair value only narrowly exceeded carrying value; as a result, even modest adverse changes in valuation assumptions, operating results, or market conditions could result in a future goodwill impairment charge.
The term “fundamental change” in our Indentures is limited to certain specified transactions and may not include other events that might adversely affect our financial condition or the market value of the Convertible Notesnotes or our common stock. See Exhibit 4.5 “Description of the Registrant’s Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934”. The delisting of our shares from trading on the NYSE is a fundamental change. Our obligation to offer to redeem the notes upon a fundamental change would not necessarily afford holders of such notes protection in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving us. If a fundamental change occurs, there are no assurances that we will have sufficient funds to redeem the Convertible Notes. See “— Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under the Convertible Notes.”
The covenants in the Indentures that govern the Convertible Notes are subject to important exceptions and qualifications.qualifications, Thesewhich covenantsare maydescribed limitunder ourExhibit ability4.5 “Description of the Registrant’s Securities Registered pursuant to optimallySection operate12 ourof business.the InSecurities addition,Exchange ourAct Creditof Agreement requires that we meet certain financial tests, including a leverage ratio test.1934.”
These covenants may limit our ability to optimally operate our business. In addition, our Credit Agreement requires that we meet certain financial tests, including a leverage ratio test.
If any guarantee is released with respect to the 2026 Convertible Notes or if any guarantee and related security interest with respect to the 2029 Convertible Notes are released, no holder of the 2026 Convertible Notes or the 2029 Convertible Notes, as applicable, will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities (including trade payables and preferred stock, if any), whether secured or unsecured, of that subsidiary will be effectively senior to the claim of any holders of the 2026 Convertible Notes or the 2029 Convertible Notes, as applicable. See Exhibit 4.5 “Description of the Registrant’s Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934.”
Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the Convertible Notes and the incurrence of the guarantees of the Convertible Notes. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the Convertible Notes or the guarantees thereof could be voided as a fraudulent transfer or conveyance if BigBear.ai or a guarantor, as applicable:applicable,
The Convertible Notes are convertible into shares of our Common Stock. Certain important corporate events, such as leveraged recapitalizations, that would increase the level of our indebtedness, would not constitute a “fundamental change” under the Convertible Notes. See Exhibit 4.5 “Description of the Registrant’s Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934.”
We have certain financial instruments, including warrants and the convertible features of our 2029 Convertible Notes and our 2026 Convertible Notes, that are accounted for as derivative liabilities and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock.
We have certain financial instruments, including warrants and the convertible features of our 2029 Convertible Notes and 2026 Convertible Notes, that are accounted for in accordance with the guidance of Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). The financial instruments that are accounted for as derivatives include the 2029 Notes Conversion Option, the 2026 Notes Conversion Option, IPO private warrants, Private Placement (“PIPE”) warrants, and warrants issued under the registered direct offering (“RDO warrants”). These financial instruments do not meet the criteria for equity treatment and are classified as liabilities measured at fair value.
During the years ended December 31, 20242025 and December 31, 20232024 we recognized net losses of $107.7$92.8 million and $7.4$107.7 million respectively, related to changes in the fair value of these financial instruments, with such changes presented in net increase (decrease) in fair value of derivatives on the consolidated statements of operations.operations and comprehensive loss.
The estimated fair value of our derivative liabilities related to our 2029 Convertible Notes was $115.8$98.8 million as of December 31, 2024.2025. As of the date of this filing, approximatelythe $57.7entire millionbalance of the 2029 Convertible Notes have been voluntarily converted by noteholders.
The market price of our Common Stock has historically experienced and may continue to experience significant volatility. From January 1, 20232024 through MarchFebruary 21,6, 2025,2026, the market price of our Common Stock, which is listed on the NYSE, fluctuated from a high of $9.78$10.36 per share in the first quarter of 2025 to a low of $0.73$1.19 in the firstthird quarter of 2023.2024. Additionally, the price of our securities has fluctuated significantly due to general economic conditions and forecasts, our general business condition and the release of our financial reports and other announcements. If our securities become delisted from the NYSE for any reason, and are quoted on the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange) or if an active trading market for our securities is not otherwise sustained, their liquidity and price may be more limited and you may be unable to sell your securities.
Risk Related to the Acquisition of PangiamAsk Sage
BigBear.ai stockholders may not realize a benefit from the PangiamAsk Sage Acquisition commensurate with the ownership dilution they will experience in connection with the PangiamAsk Sage Acquisition.
If we are unable to realize the full strategic and financial benefits currently anticipated from the PangiamAsk Sage Acquisition, BigBear.ai stockholders will have experienced dilution of their ownership interests without receiving a commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the PangiamAsk Sage Acquisition.
BigBear.ai may not achieve the benefits it expects from the PangiamAsk Sage Acquisition, which may have an adverse effect on both BigBear.ai’s and Pangiam’sAsk Sage’s business, financial condition and operating results.
BigBear.ai consummated the PangiamAsk Sage Acquisition with the expectation that the PangiamAsk Sage Acquisition will result in benefits to the combined company. Post-acquisition challenges include, among others, the following:
If the combined company is not successful in addressing these and other challenges, then the benefits of the PangiamAsk Sage Acquisition may not be realized and, as a result, the combined company’s operating results and the market price of BigBear.ai Common Stock may be adversely affected.
The combined company may be unable to integrate successfully the businesses of BigBear.ai and PangiamAsk Sage and realize the anticipated benefits of the PangiamAsk Sage Acquisition.
The PangiamAsk Sage Acquisition involves the combination of two companies which previously operated as independent companies. The combined company will be required to devote significant management attention and resources to integrating its business practices and operations. The combined company may fail to realize some or all of the anticipated benefits of the PangiamAsk Sage Acquisition if the integration process takes longer than expected or is more costly than expected. Some of the potential difficulties the combined company may encounter in the integration process include the following:
•the inability to successfully combine the businesses of BigBear.ai and PangiamAsk Sage in a manner that permits the combined company to achieve the anticipated benefits from the PangiamAsk Sage Acquisition, which would result in those benefits not being realized partly or wholly in the time frame currently anticipated or at all;
Pangiam’sAsk Sage’s potential products and technologies are in early stages of development.
The development of new technology products is a highly risky undertaking. Pangiam’sAsk Sage’s technologies and products will require additional research, development and trials. There can be no assurance that any future research, development or trial efforts will result in viable products. Future results may be negative or insufficient to allow the surviving company to pursue further development or to successfully market its products, if approved. Obtaining needed data and results may take longer than planned or may not be obtained at all. Any such delays or setbacks could have an adverse effect on the ability of the surviving company to achieve its financial goals.
Our business depends on the economic health of our current and prospective customers and overall demand for technology. In addition, the purchase of our software and services is often discretionary and typically involves a significant commitment of capital and other resources. Global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages and supply chain disruptions, inflation, interest rate fluctuations, bank failures and monetary supply shifts, as well as recession risks, which may continue for an extended period and which could result in our customer prospects and our existing customers experiencing slowdowns in their businesses, which in turn may result in reduced demand for our products, lengthening of sales cycles, loss of customers, and difficulties in collections. Our vendors and suppliers may experience, or may continue to experience, disruptions in their supply chains, which may result in service interruptions or additional operating expenses, and may increase the price at which our vendors and suppliers are willing to sell their products to us. Over the past two years, the United States, the EU, and the U.K. have experienced historically high levels of inflation. In response to high levels of inflation and recession fears, the U.S. Federal Reserve, the European Central Bank, and the Bank of England have raised, and may continue to raise, interest rates and implement fiscal policy interventions. Even if these interventions lower inflation, they may also reduce economic growth rates, create a recession, and have other similar effects. A further downturn in economic conditions, global political and economic uncertainty, a lack of availability of credit, a reduction in business confidence and activity, the curtailment of government or corporate spending, public health concerns or emergencies, financial market volatility, and other factors have in the past and may in the future affect the industries to which we sell our software and services. Our customers may suffer from reduced operating budgets, which could cause them to defer or forego purchases of our software or services. Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings. Uncertainty about global and regional economic conditions, including the ongoing conflicts in Ukraine, the Middle East, and Africa, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, lower prices for our software and services, material default rates among our customers, reduced sales of our software or services, and lower or no growth.
Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings. Uncertainty about global and regional economic conditions, including the ongoing conflicts in Ukraine, the Middle East, and Africa, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, lower prices for our software and services, material default rates among our customers, reduced sales of our software or services, and lower or no growth.
Since early 2025, the current presidential administration has signed a series of executive orders imposing sweeping tariffs on almost all imports into the United States, with certain tariffs already in effect and some which have been delayed. The administration has also stated plans to impose additional new tariffs or further increase or expand existing tariffs. In addition to the impacts to our business stemming from the tariffs imposed by the administration, we may also be materially impacted by retaliatory tariffs and other penalties or trade restrictions that may be imposed against the United States.
There continues to be significant uncertainty regarding these recent changes and potential future developments. Increased trade restrictions, tariffs or taxes on imports or exports relating to countries where we manufacture, source, or sell materials or products, could have a material adverse effect on our business and financial results. If we cannot find ways to mitigate the potential impacts from tariffs or trade restrictions successfully or in a timely manner, these additional tariffs and policies could have a significant impact on our business and results of operations. The exact magnitude of any potential impact remains uncertain, as there may be further changes to tariffs and policies and, consequently, potential increased tension between the U.S. and targeted countries. For example, our risk exposure may increase further if any countries levy additional retaliatory tariffs, taxes, or other trade restrictions or penalties against the United States or U.S. companies.
The Company is subject to risks relating to evaluations of internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.
The Company has incurred, and expects to continue to incur, a substantial amount of management time and resources to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. In this Report, the Company’s management has provided an assessment to the effectiveness of the Company’s internal control over financial reporting. In addition, pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2022, management’s assessment of the effectiveness of the Company’s internal control over financial reporting is subject to attestation by the Company’s independent registered public accounting firm. This Report includes such attestation. However, there is no assurance that the Company will continue to timely comply with such requirements nor can there be assurance that significant deficiencies and/or material weaknesses will not be identified by management or the Company’s independent registered public accounting firm (or, if identified, remediated in a timely fashion or at all), any of which may adversely affect the market price of the Company’s common stock. In addition, the Company’s compliance efforts will continue to require significant expenditures and devotion of management time, and may divert management’s attention from the Company’s operations.
In addition, while businesses acquired during the fiscal year covered by the applicable Annual Report on Form 10-K are permitted to be excluded from the scope of management’s report on internal control over financial reporting and the related auditor attestation for such Annual Report on Form 10-K (as is the case with the exclusion of the businesses acquired by the Company in fiscal 2025 from the scope of management’s report on internal control over financial reporting and the related auditor attestation for this Report), the Company will face challenges and be required to incur expenses in connection with, and devote significant management time to, the internal control over financial reporting of acquired businesses. There is no assurance that any issues, deficiencies, significant deficiencies or material weaknesses in internal controls identified at acquired businesses will be remedied in a timely or cost-efficient manner or at all.
Internal control over financial reporting may not prevent or detect misstatements due to inherent limitations in internal control systems. An internal control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met, and the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. See Item 9A (“Controls and Procedures”) of this Report for related discussion.
We have identified a material weakness in our internal control over financial reporting that has resulted in the restatement of the Restated Financial Statements. If we are unable to remediate the material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in future material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
We are required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of us as a privately-held company. As disclosed in Part II, Item 9A. “Controls and Procedures” in this Annual Report on Form 10-K, we have identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements could occur but will not be prevented or detected on a timely basis. In connection with the Company’s evaluation of internal control over financial reporting for the year ended December 31, 2024, the following material weakness has been identified:
•We have not consistently executed our technical accounting review policies, inclusive of the application of certain interpretations subject to significant judgement or differences in interpretation, at a precision level sufficient to achieve complete, accurate and timely financial accounting, reporting and disclosures of certain non-routine, unusual, or complex transactions.
Management's Discussion & Analysis (MD&A)
New heading “Impairment of long-lived assets”
New heading “Interest income”
New heading “Other expense (income), net”
New heading “Impairment of long-lived assets”
New heading “Loss on extinguishment of debt”
New heading “Other expense (income), net”
New heading “Sources of Liquidity”
New heading “Available for Sale (“AFS”) Investments”
Removed heading “Restatements of Previously Issued Consolidated Financial Statements”
Removed heading “U.S. Budget Environment”
Removed heading “Cost of Revenues”
Removed heading “Research and Development”
Removed heading “Transaction Expenses”
Removed heading “Net Increase (Decrease) in Fair Value of Derivatives”
Removed heading “Interest Expense”
Removed heading “Cost of Revenues”
Removed heading “Research and Development”
Removed heading “Transaction Expenses”
Removed heading “Net Increase (Decrease) in Fair Value of Derivatives”
Removed heading “Interest Expense”
Removed heading “Bank of America Senior Revolver”
Removed heading “RDO Warrant Exercise”
Removed heading “PIPE Warrant Exercise”
Removed heading “Emerging Growth Company”
Removed heading “Class B Unit Incentive Plan”
Removed heading “Restricted Stock Units”
Largest changes
“The Company was not in compliance with the Fixed Charge Coverage ratio requirement as of September 30, 2022, and as a result was unable to draw on the facility. On November 8, 2022, the Company entered into a Second Amendment to the Bank of America Credit Agreement (the “Second Amendment”), which modifies key terms of the Senior Revolver. …”see in full comparison
“SG&A expenses as a percentage of total revenues for the year ended December 31, 2023 decreased to 46% as compared to 55% for the year ended December 31, 2022, which was primarily driven by a reduction in personnel costs resulting from the Company’s restructuring actions, as well as reduction in non-recurring integration costs of $7.3 million, capital market advisory fees of $0.7 million, and commercial start-up costs of $6.5 million incurred during the year ended December 31, 2022 that were not repeated in the comparable period. …”see in full comparison
“Restatements of Previously Issued Consolidated Financial Statements”see in full comparison
“We performed our annual goodwill impairment assessment as of the first day of the fourth quarter of 2025 using a qualitative approach to determine if it was more likely than not that the fair value of the reporting unit was less than the carrying value. As part of this evaluation, the Company considered relevant events and circumstances that could affect the estimated fair value of its reporting unit, including macroeconomic conditions, the shut down of the U.S. government, industry and market trends, financial performance, and other entity-specific factors. …”see in full comparison
“At the beginning of December 2025, a triggering event was identified relative to certain revenue contracts with the U.S. government that resulted in downward revisions of short and long-term forecasts. The facts resulting in the triggering event for the Company’s goodwill were also considered a triggering event for the long-lived assets of the Company’s single asset group. As a result, we first assessed the Company’s long-lived assets for impairment. As a result of the long-lived assets impairment, the carrying amount of the Company’s asset group was reduced to it’s fair value. …”see in full comparison
“During the third quarter of fiscal 2024, we reevaluated our long-term forecasts due to changes in our expectations about the timing of forecasted revenues for one of our higher growth products. We concluded that the revision to the Company’s forecasts constituted a triggering event and therefore performed a qualitative impairment analysis as of September 30, 2024. …”see in full comparison
Full comparison: every changed paragraph (156)
Restatements of Previously Issued Consolidated Financial Statements
As described in Note 2—Restatement of Previously Issued Financial Statements, for the period ended December 31, 2024, management identified a material error in the previously reported financial statements related to its convertible notes issued in December 2021 and due in December 2026 (“2026 Notes”). The conversion option embedded within the 2026 Notes was incorrectly deemed to be eligible for a scope exception from the bifurcation requirements of ASC 815-15 and therefore requires bifurcation as a derivative (“2026 Notes Conversion Option”). The 2026 Notes include certain adjustments to the conversion rate that violate the “fixed-for-fixed” criteria described in Accounting Standards Codification (“ASC”) 815-40. As a result, the consolidated financial statements have been restated to reflect the issuance of the 2026 Notes Conversion Option at fair value as of December 7, 2021 and the subsequent remeasurement to fair value at each reporting date.
On December 19, 2024, the Company entered into privately negotiated exchange agreements with a limited number of holders of the Company’s 2026 Convertible Notes, to exchange the 2026 Convertible Notes for new senior secured convertible notes due 2029 (the “2029 Convertible Notes”, together with the 2026 Convertible Notes, the “Convertible Notes”). The Company exchanged approximately $182.3 million principal amount of the 2026 Convertible Notes for $182.3 million in aggregate principal amount of the Company’s 2029 Convertible Notes. The 2029 Convertible Notes bear interest at a rate of (i) 6.0% per annum, if interest is paid in cash and (ii) 7.0% per annum, if the Company elects, subject to certain conditions, to pay interest in kind with shares of its common stock, subject to other adjustments if certain liquidity requirements are not met. The conversion rate is 281.4491 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of $3.55 per share of the Company’s common stock.
PangiamAsk Sage Acquisition
On December 31, 2025, the Company completed the acquisition of Ask Sage, Inc. (“Ask Sage” or the “Ask Sage Acquisition”), a secure, multi-modal generative AI platform designed for government and enterprise use. Of the total purchase consideration of $271.6 million, $267.6 million was paid in cash at or around the time of closing and $4.0 million was held back to cover any post-closing downward adjustments to the purchase price.
ATM Program
The Company completed the “May 2024 Sales Agreement,” the “June 2025 Sales Agreement” and the “August 2025 Sales Agreement” during the year ended December 31, 2025 for total gross proceeds of $637 million and 142 million shares issued.
On December 19, 2024, the Company entered into privately negotiated exchange agreements (the “Exchange Transaction”) with a limited number of holders of the Company’s 2026 Convertible Notes, to exchange the 2026 Convertible Notes for new senior secured convertible notes due 2029 (the “2029 Convertible Notes”, together with the 2026 Convertible Notes, the “Convertible Notes”). The Company exchanged approximately $182.3 million principal amount of the 2026 Convertible Notes for $182.3 million in aggregate principal amount of the Company’s 2029 Convertible Notes. The 2029 Convertible Notes bear interest at a rate of (i) 6.0% per annum, if interest is paid in cash and (ii) 7.0% per annum, if the Company elects, subject to certain conditions, to pay interest in kind with shares of its common stock, subject to other adjustments if certain liquidity requirements are not met. The conversion rate is 281.4491 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of $3.55 per share of the Company’s common stock.
During the three months ended March 31, 2025, $57.7 million of the 2029 Convertible Notes were voluntarily converted by noteholders following the Exchange Transaction. These conversions have resulted in the issuance of approximately 16.7 million shares of common stock in exchange for the retirement of the respective notes.
On January 2, 2026, the Company announced that all 2029 Convertible Notes outstanding as of January 16, 2026 (the “Redemption Date”), would be redeemed for cash at a price equal to the principal amount of such notes plus accrued and unpaid interest, as provided by the terms of the Exchange Agreement. All of the 2029 Convertible Notes, with a par value of $124.6 million, were voluntarily converted by noteholders prior to the Redemption Date. These conversions resulted in the issuance of approximately 38.1 million shares of common stock in exchange for the retirement of the respective notes.
On February 29, 2024, the Company completed the acquisition of Pangiam Intermediate Holdings, LLC (“Pangiam” or the “Pangiam Acquisition”), a leader in vision AI for the global trade, travel and digital identity industries. The combination of BigBear.ai and Pangiam creates one of the industry’s most comprehensive vision and edge AI portfolios, combining facial recognition, image-based anomaly detection and advanced biometrics with BigBear.ai’s computer vision and predictive analytics capabilities, positioning the Company as a foundational leader in how artificial intelligence is operationalized at the edge.
On February 27, 2024, the Company entered into a warrant exercise agreement with an existing accredited investor (the “RDO Investor”) to exercise in full the outstanding Registered Direct Offering to purchase up to an aggregate of 8,886,255 shares of the Company’s common stock for gross proceeds of approximately $20.6 million (the “RDO warrants”). In consideration for the immediate and full exercise of the RDO warrants, the RDO Investor received a new unregistered common stock purchase warrant to purchase up to an aggregate of 5,800,000 shares of the Company’s common stock (the “2024 RDO warrant”) in a private placement. The 2024 RDO warrants became exercisable commencingsix on August 28, 2024, expiringmonths after fiveissuance years,and had a five-year term, with an exercise price per share equal to $3.78. These warrants were fully exercised during the first quarter of 2025.
On February 5, 2025, the Company entered into a warrant exercise agreement with an existing accredited investor to exercise in full an outstanding Common Stock Purchase WarrantWarrant, the 2024 RDO warrant, to purchase up to an aggregate of 5,800,000 shares of the Company’s common stock. InThe considerationgross forproceeds to the immediateCompany andfrom fullthe exercise ofwere the$21.9 existingmillion, warrant for cash, the investor received a new unregistered Common Stock Purchase Warrantprior to purchasededucting upestimated tooffering an aggregate of 3,770,000 shares of the Company’s common stock (the “New Warrant”) in a private placement.expenses.
In consideration for the immediate and full exercise of the existing warrant for cash, the investor received a new unregistered Common Stock Purchase Warrant to purchase up to an aggregate of 3,770,000 shares of the Company’s common stock (the “2025 RDO Warrant”) in a private placement.
The New2025 RDO Warrant will becomebecame exercisable commencing any time on or after August 6, 2025 (the “Exercise Date”) with an expiration date five years after the Exercise Date with an exercise price per share equal to $9.00. The gross proceeds to the Company from the exercise were $21.9 million, prior to deducting estimated offering expenses.
On March 4, 2024, the Company entered into a warrant exercise agreement with an existing accredited investor (the “PIPE Investor”) to exercise in full the outstanding PIPE warrants to purchase up to an aggregate of 13,888,889 shares of the Company’s common stock for gross proceeds of approximately $33.2 million. In consideration for the immediate and full exercise of the PIPE warrants, the PIPE Investor received a new unregistered common stock purchase warrant to purchase up to an aggregate of 9,000,000 shares of the Company’s common stock (the “2024 PIPE warrant”) in a private placement. The 2024 PIPE warrant became exercisable commencingsix on September 5, 2024 (the “Exercise Date”), expiringmonths after fiveissuance years,and had a five-year term, with an exercise price per share equal to $4.75. These warrants were fully exercised during the first quarter of 2025. The gross proceeds to the Company from the exercise were $42.8 million, prior to deducting estimated offering expenses.
U.S. Budget Environment
The majority of our revenue is derived from federal government contracts. U.S. government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term.
On March 22, 2024, the President signed the second Fiscal Year (“FY”) 2024 Consolidated Appropriations package into law, which includes Department of Defense (“DoD”) funding. This legislation reflects the Fiscal Responsibility Act (“FRA”) spending limit of $886 billion for National Defense, of which $842 billion was for the DoD base budget.
The President’s FY 2025 budget request was submitted to Congress on March 11, 2024, initiating the FY 2025 defense authorization and appropriations legislative process. The request included $895 billion for National Defense, of which $850 billion is for the DoD base budget, in keeping with the limit established by the FRA. While compression on overall requirements driven by the FRA limit is evident, the Office of the Secretary of Defense has stated the FY 2025 budget proposal meets their objectives of keeping National Defense Strategy priorities on track.
The House and Senate continue the legislative process on the FY 2025 budget. The National Defense Authorization Act for Fiscal Year 2025, signed by the President on December 24, 2024, is consistent with the FY 2025 President’s Budget Request (PBR) and Congressionally mandated budget caps established by the FRA with a topline of $849.8 billion. The House Appropriations Committee also marked its bill at this same level. The Senate Appropriations Committee, however, did not adhere to the FRA spending caps and marked budgets above the PBR, providing between a $21 billion and $25 billion increase over the PBR level.
Congress still needs to approve or revise the President’s FY 2025 budget proposal through enactment of appropriations bills and other policy legislation, which would then require final approval from the President in order for the FY 2025 budget process to conclude. A second Continuing Resolution (CR) for FY 2025 passed the House and Senate on December 20, 2024, and was signed by the President on December 21, 2024. The bill funds U.S. Government operations through March 14, 2025. In addition to the Continuing Resolution, the President also signed the Disaster Relief Supplemental Appropriations Act on December 21, 2024, which includes more than $100 billion in supplemental funding. Of note, the final version of the bill did not address the debt ceiling, which is set to expire mid-January 2025 and is expected to cause challenges at the start of the 119th Congressional negotiations. Once the debt ceiling is reached, Treasury may have to use extraordinary measures to prevent default. Treasury’s available cash and any extraordinary measures taken should delay the risk of default for at least several months after the end of the first quarter of 2025. In the upcoming months, the new Congress will return to the task of funding the U.S. Government for the balance of FY 2025. Significant differences that must be resolved include the different allocations as noted above and policy matters that arose during consideration of the CR and the underlying bills.
We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, the new Administration and Congress, the global security environment, inflationary pressures, and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly and our programs.
Global Economic and Geopolitical Environment
The majority of our revenue is derived from federal government contracts. Funding for U.S. Government programs is subject to a variety of factors that can affect our business, including the administration’s budget requests and procurement priorities and policies, annual congressional budget authorization and appropriation processes, and other U.S. Government domestic and international priorities. U.S. Government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term.
On September 30, 2025, the continuing resolution (“CR”) allowing U.S. government departments and agencies to operate through the end of the government fiscal year expired and the U.S. government shut down. As a result of the U.S. government shutdown, our business and results of operations were insignificantly impacted by the disruptions to federal government offices, workers and operations, including funding of certain programs, stop work orders, delay in contract awards, new program starts, payments for work performed, and other actions. On November 12, 2025, Congress passed a funding extension through January 30, 2026 for nine of the twelve bills and a full-year appropriations for three bills. On February 3, 2026, the President signed into law a bill to end the partial government shutdown that began on January 31. The bill provides full-year appropriations for several programs, including the Pentagon and State departments. The impact of the January shutdown did not have a meaningful impact on our results.
We anticipate the federal budget, debt ceiling, regulatory environment, and potential tax reform will continue to be subject to debate and compromise shaped by, among other things, the current Administration and Congress, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly and our programs. Additionally, the administration continues to take steps to evaluate government-wide and defense-specific staffing and procurement, which includes assessing mission priorities, procurement methods, program performance, and other factors and then potentially taking action based on those assessments. Those actions remain uncertain and could result in impacts to both our current and future business prospects and financial performance.
Additionally, the President of the United States has issued multiple Executive Orders, including two that are intended to (i) simplify and accelerate the procurement process through a review and restructuring of the Federal Acquisition Regulation (FAR), and its supplements and (ii) modernize defense acquisitions by promoting commercial solutions, innovative acquisition authorities, and other existing streamlined processes. Among the actions directed by the President is a review of major defense acquisition programs that are behind schedule or over budget, including identifying any programs for potential cancellation.
While the impact of these reforms on our business is uncertain, they could potentially lead to changes in the way we interact with the U.S. Government. We will continue to monitor and assess their effects on our business and financial results. Should the U.S. Government review one or more major defense programs in which we provide solutions or services, and this review leads to a full or partial cancellation of one of these programs, this could have an adverse effect on our business, financial condition, results of operations and cash flows.
We operate in a complex and evolving security environment and our business is affected by geopolitical issues. Conflicts in Ukraine, the Middle East. and Africa and heightened tension in the Pacific region have elevated global geopolitical tensions and security concerns. For our government customers, their focus on addressing immediate needs in these regions has slowed the pipeline and pace of contract awards, pushing revenue into subsequent periods. We continue to expect the global economic and geopolitical climateenvironment to drive adoption of our offerings over the long term, as it has heightened the need for advanced AI tools that provide enhanced intelligence and full spectrum cyber operations – areas where we believe we have unmatched capabilities. While these conflictschallenges are still evolving and the eventual outcome remains highly uncertain, we do not believe that these events will have a material impact on our business and results of operations. However, if these conflictschallenges worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.
Cost of Revenues
Cost of revenues primarily includes salaries, stock-based compensation expense, and benefits for personnel involved in performing the services described aboveabove, as well as allocated overhead and other direct costs.
Research and Development
Restructuring charges consist of employee separation costs and impairment of lease right-of-use assets related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services.services as well as employee separation costs associated with strategic changes in certain key leadership roles.
Transaction Expenses
Transaction expenses incurred in 2024 and 2023 consist of diligence, legal and other related expenses associated with the 2025 Ask Sage and 2024 Pangiam Acquisition, which was completed on February 29, 2024. Transaction costs incurred in 2022 are primarily related to our acquisition of ProModel Corporation, which was completed on April 7, 2022,acquisitions, as well as costs associated with evaluating other acquisition opportunities.
Impairment of long-lived assets
Impairment of long-lived assets consists of non-cash impairment of intangible assets.
Net Increase (Decrease) in Fair Value of Derivatives
Net increase (decrease) in fair value of derivatives consists of fair value remeasurements of the 2029 Convertible Notes Conversion Option, 2026 Convertible Notes Conversion Option, PIPE warrants, RDO warrants, and IPO private warrants, and the Written put option.warrants.
Interest Expense
Interest income
Interest income consists primarily of interest income earned on our money market accounts and investments in debt securities.
Other expense (income), net
Other expense (income), net consists primarily of realized gains and losses on the sale of available for sale investments, foreign exchange gains and losses, and other non-operating expenses.
The table below presents our consolidated statements of operations and comprehensive loss for the following periods:
Comparison of the YearYears Ended December 31, 2025, 2024, 2023 and 20222023
Revenues decreased by $30.6 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to lower volume on the Army programs and significant one time contracts during the year ended December 31, 2024, that did not recur during the year ended December 31, 2025.
Cost of revenues as a percentage of total revenues was 78% and 71% for the year ended December 31, 2025 and 2024, respectively. The increase in cost of revenue as a percentage of total revenue was partially driven by a higher mix of higher margin solutions work in the year ended December 31, 2024 as compared to the year ended December 31, 2025. The decrease in total dollars of cost of revenues was primarily due to lower volume on Army programs and significant one time contracts during the year ended December 31, 2024 which did not recur during the year ended December 31, 2025.
Revenues increased by $0.2 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily as a result of increased revenue on certain Army programs as a result of new contract awards and higher volume. These increases were offset by the wind-down of certain Air Force programs in the second quarter of 2023 as well as lower volume from Virgin Orbit as a result of Virgin Orbit’s bankruptcy announcement in the second quarter of 2023.
Cost of Revenues
Cost of revenues as a percentage of total revenues increased to 74% for the year ended December 31, 2023 as compared to 77% for the year ended December 31, 2022. The year ended December 31, 2023 does not include activity from Virgin Orbit after the first quarter of 2023 as a result of Virgin Orbit’s bankruptcy announcement in the second quarter of 2023 which was a primary driver of the decrease in gross margin during the year as compared to the year ended December 31, 2022.
SG&A expenses as a percentage of total revenues for the year ended December 31, 2025 increased to 75% as compared to 51% for the year ended December 31, 2024. The year-over-year increases include Pangiam’s headcount and operating expenses not fully included in the first quarter of 2024 (the Pangiam acquisition was completed on February 29, 2024), significant investments in sales and marketing during the year ended December 31, 2025.
Research and development expenses increased by $5.9 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase in research and development expenses was driven by fewer projects qualifying for software capitalization compared to the year ended December 31, 2024.
SG&A expenses as a percentage of total revenues for the year ended December 31, 2023 decreased to 46% as compared to 55% for the year ended December 31, 2022, which was primarily driven by a reduction in personnel costs resulting from the Company’s restructuring actions, as well as reduction in non-recurring integration costs of $7.3 million, capital market advisory fees of $0.7 million, and commercial start-up costs of $6.5 million incurred during the year ended December 31, 2022 that were not repeated in the comparable period. These decreases were partially offset by $3.0 million of professional fees related to non-recurring strategic initiatives, $2.3 million of non-recurring litigation expenses, and bad debt reserves of $1,425 million related to the settlement of Virgin Orbit’s Chapter 11 bankruptcy proceedings.
Research and Development
Research and development expenses decreased by $3.4 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022. The decrease in research and development expenses was driven by certain software development projects that have reached the technological feasibility stage and for which related costs were capitalized during the year ended December 31, 2023.
Restructuring charges increased by $3.1 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services.services as well as employee separation costs associated with strategic changes in certain key leadership roles.
Restructuring charges increased by $0.5 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services as well as employee separation costs associated with strategic changes in certain key leadership roles
Restructuring charges for the year ended December 31, 2022 includes the impairment of lease right-of-use assets associated with these strategic cost saving initiatives.
What changed in the latest 10-Q
Risk Factors
For a discussion of the material factors that make an investment in the Company risky, please see the risk factors disclosed in “Item 1A, Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025. These risks and uncertainties have the potential to materially affect our business, results of operations, financial condition, cash flows, projected results and future prospects. These risks are not exclusive and additional risks to which we are subject include the factors mentioned under “Forward-Looking Statements” and the risks described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Cost of Revenues”
New heading “Research and Development”
New heading “Transaction Expenses”
New heading “Interest Expense”
New heading “Other expense (income)”
New heading “Income tax expense”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “Restructuring charges”
New heading “Interest income”
New heading “Net increase in fair value of derivatives”
Largest changes
“During the three months ended June 30, 2025, the Company recognized a non-cash goodwill impairment charge of $70.6 million, driven by a change in forecast.”see in full comparison
“During the six months ended June 30, 2025, the Company recognized a non-cash goodwill impairment charge of $70.6 million, driven by a change in forecast.”see in full comparison
“Goodwill impairment consists of non-cash impairments of goodwill.”see in full comparison
Full comparison: every changed paragraph (70)
•Results of Operations: This section provides a discussion of our results of operations for the three and the six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.
On December 31, 2025, the Company completed the acquisition of Ask Sage, Inc. (“Ask Sage” or the “Ask Sage Acquisition”), a secure, multi-modal generative AI platform designed for government and enterprise use. Of the total purchase consideration of $272.1 million, $267.6 million was paid in cash at or around the time of closing and $4.5 million was held back to cover any post-closing downward adjustments to the purchase price.price, which was settled in the three months ended June 30, 2026.
TheHistorically, the majority of our revenue is derived from federal government contracts. Funding for U.S. Government programs is subject to a variety of factors that can affect our business, including the administration’s budget requests and procurement priorities and policies, annual congressional budget authorization and appropriation processes, and other U.S. Government domestic and international priorities. U.S. Government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term.
On September 30, 2025, the continuing resolution (“CR”) allowing U.S. government departments and agencies to operate through the end of the government fiscal year expired and the U.S. government shut down. As a result of the U.S. government shutdown, our business and results of operations were insignificantly impacted by the disruptions to federal government offices, workers and operations, including funding of certain programs, stop work orders, delay in contract awards, new program starts, payments for work performed, and other actions. On November 12, 2025, Congress passed a funding extension through January 30, 2026 for nine of the twelve bills and full-year appropriations for three bills. On February 3, 2026, the President signed into law a bill to end the partial government shutdown that began on January 31. The bill provides full-year appropriations for several programs, including the Pentagon and State departments; however, the Department of Homeland Security continues to remain unfunded. The impact of the January shutdown did not have a meaningful impact on our results.
We continue to expect the global economic and geopolitical environment to drive adoption of our offerings over the long term, as it has heightened the need for advanced AI tools that provide enhanced intelligence and full spectrum cyber operations – areas where we believe we have unmatched capabilities. While these challenges are still evolving and the eventual outcome remains highly uncertain, we do not believe that these events will have a material impact on our business and results of operations. However, if these challenges worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.
However, if these challenges worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.
Goodwill impairment consists of non-cash impairments of goodwill.
Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025
Revenues decreasedincreased by $0.3$4.3 million during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025 primarily due to lower volume on the Army programs and significant one time contracts during the three months ended March 31, 2025, that did not recur during the three months ended March 31, 2026, which was substantially offset by the inclusion of Ask Sage during the three months ended MarchJune 31,30, 2026.
Cost of Revenues
Cost of revenues as a percentage of total revenues wasdecreased 66%to and 79%67% for the three months ended MarchJune 31,30, 2026 andas 2025,compared respectively.to 75% for the three months ended June 30, 2025. The decrease in cost of revenue as a percentage of total revenue was driven by the inclusion of higher margin Ask Sage revenues during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The decrease in total dollars of cost of revenues was primarily due to lower volume on Army programs during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
SG&A expenses as a percentage of total revenues for the three months ended MarchJune 31,30, 2026 increased to 85%87% as compared to 65%66% for the three months ended MarchJune 31,30, 2025. The year-over-year increases include Ask Sage’s headcount and operating expenses not present in thethree firstmonths quarterended ofJune 30, 2025, as well as significant investments in sales, marketing and other initiatives during the three months ended MarchJune 31,30, 2026.
Research and Development
Research and development expenses increased by $1.4$3.2 million during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increase in research and development expenses was driven by higher headcount and fewer projects qualifying for software capitalization compared to three months ended June 30, 2025. During the three months ended MarchJune 31,30, 2025.2025, $1 million of research and development costs were capitalized compared to $0 for the three months ended June 30, 2026.
Restructuring charges decreased by $1.7$1.5 million during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services as well as employee separation costs associated with strategic changes in certain key leadership roles.
Transaction Expenses
Transaction expenses for the three months ended MarchJune 31,30, 2026 consist of diligence, legal and other related expenses associated with the Ask Sage and CargoSeer acquisitions, as well as costs associated with evaluating other acquisition opportunities. There were no transaction expenses for the three months ended March 31, 2025.acquisitions.
During the three months ended June 30, 2025, the Company recognized a non-cash goodwill impairment charge of $70.6 million, driven by a change in forecast.
Interest Expense
Interest expense during the three months ended June 30, 2026 and 2025 consists primarily of interest expense, debt issuance discount amortization, commitment fees and debt issuance cost amortization under our Convertible Notes. See the Liquidity and Capital Resources section below for more information. The change in interest expense during three months ended June 30, 2026 as compared to three months ended June 30, 2025 is primarily due to a lower average principal balance on the 2029 Convertible Notes due to the conversion of the remaining balance during the first quarter of 2026.
The increase in interest income is primarily related to a higher average cash and investment balances during three months ended June 30, 2026 versus comparative periods resulting from cash raised through at-the-money equity issuances, and includes interest earned from our investments in debt securities.
The net increase in fair value of derivatives of $20.1$0.5 million for the three months ended MarchJune 31,30, 2026 includesconsists of fair value remeasurements of the 2026 Notes Conversion Option, IPO private warrants, and the 2025 RDO warrants,warrants. asThe wellnet asincrease in fair value of derivatives of $135.8 million for the remeasurementthree months ended June 30, 2025 consists of fair value remeasurements of the 2029 Notes Conversion OptionOption, immediately2026 priorNotes toConversion conversion.Option, TheIPO decreaseprivate ofwarrants, $13.2 million is due to decrease inand the stock price as of March 31, 2025 andRDO March 31, 2026.warrants.
Other expense (income)
The change in other income during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily driven by foreign exchange losses and management fees on our debt securities portfolio.
Income tax expense
The effective tax rate for the three months ended June 30, 2026 and the three months ended June 30, 2025 are consistent. The effective tax rate for the three months ended June 30, 2026 and June 30, 2025 differs from the U.S. federal income tax rate of 21.0% primarily due to state and local income taxes, permanent differences between book and taxable income, certain discrete items, and the change in valuation allowance. The benefit for three months ended June 30, 2026 and 2025 primarily relates to state minimum taxes offset by income tax benefit derived from our United Kingdom entity.
As of June 30, 2026, the Company has determined that it is not more-likely-than-not that substantially all of its deferred tax assets will be realized in the future, and continues to have a full valuation allowance established against its deferred tax assets.
Refer to Note 13—Income Taxes of the Notes to condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.
Comparison of the Six Months Ended June 30, 2026 and 2025
Revenues increased by $4.0 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to the inclusion of Ask Sage offset by lower volume on the Army programs and significant one time contracts that contributed revenues during the six months ended June 30, 2025, that did not recur during the six months ended June 30, 2026..
Cost of revenues as a percentage of total revenues was 67% and 77% for the six months ended June 30, 2026 and 2025, respectively. The decrease in cost of revenue as a percentage of total revenue was driven by the inclusion of higher margin Ask Sage revenues during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease in total dollars of cost of revenues was primarily due to lower volume on Army programs during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
SG&A
SG&A expenses as a percentage of total revenues for the six months ended June 30, 2026 increased to 86% as compared to 66% for the six months ended June 30, 2025. The year-over-year increase is driven by increased asset amortization from the Ask Sage acquisition, increased legal and proxy expenses related to our special stockholder meeting and establishing our new Retail Voting Program and increased sales and marketing expenses resulting from partnerships and expanding our growth team.
.
Research and development expenses increased by $4.5 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase in research and development expenses was driven by higher headcount and fewer projects qualifying for software capitalization compared to the six months ended June 30, 2025. During the six months ended June 30, 2025, $2.6 million of research and development costs were capitalized compared to $0 for the six months ended June 30, 2026.
Restructuring charges
Restructuring charges decreased by $3.2 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services as well as employee separation costs associated with strategic changes in certain key leadership roles.
Transaction expenses for the six months ended June 30, 2026 consist of diligence, legal and other related expenses associated with the Ask Sage and CargoSeer acquisitions, as well as costs associated with evaluating other acquisition opportunities. There were no transaction expenses for the six months ended June 30, 2025.
During the six months ended June 30, 2025, the Company recognized a non-cash goodwill impairment charge of $70.6 million, driven by a change in forecast.
Interest expense during the six months ended June 30, 2026 and 2025 consists primarily of interest expense, debt issuance discount amortization, commitment fees and debt issuance cost amortization under our Convertible Notes. See the Liquidity and Capital Resources section below for more information. The change in interest expense during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 is primarily due to a lower average principal balance on the 2029 Convertible Notes due to the conversion of the remaining balance during the six months ended June 30, 2026.
Interest income
The increase in interest income is primarily related to a higher average cash and investment balances during the six months ended June 30, 2026 compared to comparative periods resulting from cash raised through at-the-money equity issuances, and includes interest earned from our investments in debt securities.
Net increase in fair value of derivatives
The net increase in fair value of derivatives of $20.6 million for the six months ended June 30, 2026 includes fair value remeasurements of the 2026 Notes Conversion Option, IPO private warrants, and the 2025 RDO warrants, as well as the remeasurement of 2029 Notes Conversion Option immediately prior to conversion. The decrease of $148.5 million is due to a decrease in the stock price between June 30, 2025 and June 30, 2026.
Loss on extinguishment of debt during the threesix months ended MarchJune 31,30, 2026 and 2025 relates to the write-off of the unamortized debt issuance costs and discount on the 2029 Convertible Notes that were voluntarily converted by noteholders.
Interest expense during the three months ended March 31, 2026 and 2025 consists primarily of interest expense, debt issuance discount amortization, commitment fees and debt issuance cost amortization under our Convertible Notes. See the Liquidity and Capital Resources section below for more information. The change in interest expense during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily due to a lower average principal balance on the 2029 Convertible Notes due to the conversion of the remaining balance during the three months ended March 31, 2026.
The increase in interest income is primarily related to a higher average cash and investment balances during the three months ended March 31, 2026 compared to comparative periods resulting from cash raised through at-the-money equity issuances, and includes interest earned from our investments in debt securities.
The change in other expense (income),expense, net during the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025 is primarily driven by foreign exchange losses and management fees on our debt securities portfolio.
The effective tax rate for the threesix months ended MarchJune 31,30, 2026 and 2025 differs from the U.S. federal income tax rate of 21.0% primarily due to state and local income taxes, permanent differences between book and taxable income, certain discrete items and the change in valuation allowance. The benefit for the threesix months ended MarchJune 31,30, 2026 and 2025 primarily relates to state minimum taxes offset by income tax benefit derived from our United Kingdom entity and to the change in valuation allowance as a result of the Ask Sage acquisition.
As of MarchJune 31,30, 2026, the Company has determined that it is not more-likely-than-not that substantially all of its deferred tax assets will be realized in the future and continues to have a full valuation allowance established against its deferred tax assets.
The Company uses Adjusted EBITDA to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Adjusted EBITDA is a financial measure not calculated in accordance with GAAP. Adjusted EBITDA is defined as net loss adjusted for interest expense, interest income, income tax expense, depreciation and amortization, equity-based compensation and associated employer payroll taxes, net increase in fair value of derivatives, restructuring charges, non-recurring strategic initiatives, non-recurring litigation, transaction expenses, non-recurring integration costs, goodwill impairment, and loss on extinguishment of debt. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. This non-GAAP financial measure should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. 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.
While we intend to reduce debt over time using cash provided by operations, we may also attempt to meet long-term debt obligations, if necessary, by obtaining capital from a variety of additional sources or by refinancing existing obligations. These sources include public or private capital markets, bank financings, proceeds from dispositions or other third-party sources.
In April 2023, the Company filed an automatic shelf registration statement on Form S-3 (the “2023 Shelf Registration Statement”) with the SEC registering an indeterminate amount of its common stock, preferred stock, warrants, rights, and units (collectively, “Company securities”), which the SEC declared effective on April 21, 2023. In May 2024, the Company filed a prospectus supplement to the 2023 Shelf Registration Statement which allows the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $150 million including shares of common stock that may be sold pursuantPursuant to the Company’s controlled equity offering agreement, dated as of May 10, 2024agreement (the “Controlled Equity Offering Agreement”), dated as of May 10, 2024, with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, under an “at the market” offering program (the “MayATM 2024 Sales AgreementProgram”). the Company agreed to pay commissions to Cantor as its sales agent for their service with respect to the sales of common stock through the ATM Program.
Pursuant to the Controlled Equity Offering Agreement, the Company may offer and sell common stock having an aggregate offering price of up to $150 million from time to time to or through Cantor, subject to the Company’s compliance with applicable laws and the applicable requirements of the Controlled Equity Offering Agreement. The Controlled Equity Offering Agreement stipulates that the Company will pay Cantor a commission equal toof up to 3.0% of the gross offering proceeds of any shares of common stock sold to or through Cantor pursuant to the Controlled Equity Offering Agreement. The Company intends to use the net proceeds from sales of common stock issued under the ATM Program for general corporate and working capital purposes. The timing of any sales and the number of shares sold will depend on a variety of factors to be determined and considered by the Company. The Company is not obligated to sell any shares under the Controlled Equity Offering Agreement.
DuringIn the years ended December 31, 2025 andMay 2024, the Company filed variousa prospectus supplementssupplement to the 2023 Shelf Registration Statement which allowedallows the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $637.1$150.0 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement (the “Sales Agreements”). During the year ended December 31, 2025, the Company sold 142,253,313 shares of common stock under the Sales Agreements for an aggregate offering price of $637.1 million. Total issuance costs related to the ATM Program were approximately $8.3 million, resulting in aggregate net proceeds of approximately $628.8 million.Agreement.
In June 2025, the Company filed a prospectus supplement to the 2023 Shelf Registration Statement which allows the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $150.0 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement.
During the six months ended June 30, 2025, the Company sold 142,253,313 shares of common stock under the ATM Program for an aggregate offering price of $300.0 million. Total issuance costs related to the ATM Program were approximately $5.2 million, resulting in aggregate net proceeds of approximately $294.8 million during the six months ended June 30, 2025.
In August 2025, the Company filed an additional prospectus supplement to the 2023 Shelf Registration Statement which allowed the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $337.1 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement (the “August 2025 Sales Agreement”). During the remainder of the year ended December 31, 2025, the Company sold 65,000,000 shares of common stock under the August 2025 Sales Agreement for an aggregate offering price of $337.1 million. Total issuance costs related to the ATM Program were approximately $3.1 million, resulting in aggregate net proceeds of approximately $334.0 million.
As of MarchJune 31,30, 2026, there is no remainingcapacity capacityremained available under the 2023ATM Shelf Registration Statement.programs.
Our available liquidity as of MarchJune 31,30, 2026 and December 31, 2025, consisted primarily of available cash and cash equivalents. The following table details our available liquidity:
BBAI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 2 filings (2 insiders, 2 trade dates, 25,000 shares, about $105.0K). Net open-market shares: -25,000 (purchases minus sales); net value about -$105.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Ricker Sean Raymond |
Shares withheld for tax | 6,991 | $2.65 | $18.5K |
| 2026-09-30 | Blankenship Carolyn |
Shares withheld for tax | 9,020 | $2.65 | $23.9K |
| 2026-09-30 | Mcaleenan Kevin |
Shares withheld for tax | 21,523 | $2.65 | $57.0K |
| 2026-08-13 | Gainey Sean Alexander |
Grant/award | 32,776 | — | — |
| 2026-06-30 | Ricker Sean Raymond |
Shares withheld for tax | 10,069 | $3.60 | $36.2K |
| 2026-06-30 | Blankenship Carolyn |
Shares withheld for tax | 9,019 | $3.60 | $32.5K |
| 2026-06-30 | Mcaleenan Kevin |
Shares withheld for tax | 23,562 | $3.60 | $84.8K |
| 2026-06-14 | Ae Industrial Partners Fund Ii-A, Lp |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Hayes Dorothy D |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Evangelista Anthony |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Fulchino Paul E |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Cannito Peter Anthony Jr |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Braden Pamela Joyce |
Grant/award | 36,070 | — | — |
| 2026-06-14 | Battle Sean Bernard |
Grant/award | 36,070 | — | — |
| 2026-06-06 | Ricker Sean Raymond |
Shares withheld for tax | 9,759 | $4.20 | $41.0K |
| 2026-05-22 | Ricker Sean Raymond |
Open-market sale | 10,000 | $4.33 | $43.3K |
| 2026-05-08 | Hayes Dorothy D |
Open-market sale | 15,000 | $4.11 | $61.6K |
Well-known investors holding BBAI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 5,379,946 | $19.7M | 0.01% | Reduced 27% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 830,264 | $2.9M | — | Sold out |
| Two Sigma Investments | 2026-06-30 | 221,613 | $813.3K | 0.0% | Reduced 69% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 33,790 | $124.0K | 0.0% | Reduced 30% |