Company: MRCY
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001049521-25-000062
Chunk: 106

Company: MERCURY SYSTEMS INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 8
Chunk 106
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(f) under the Exchange Act) that occurred during the quarter ended September 26, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

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PART II. OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

We are subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of our business. Although legal proceedings are inherently unpredictable, we believe that we have valid defenses with respect to those matters currently pending against us and intend to defend ourself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on our cash flows, results of operations, or financial position. Please see Note M to our consolidated financial statements (under the caption "Legal Claims") for a discussion of our legal proceedings.

ITEM 1A.     RISK FACTORS

The following risk factor supplements the risk factors included in our Annual Report on Form 10-K for the fiscal year ended June 27, 2025.

We are subject to risks from the continuation of the ongoing U.S. federal government shutdown.

Our business is exposed to operational and financial disruptions caused by the U.S. federal government shutdown that began on October 1, 2025. The ongoing U.S. federal government shutdown may result in us experiencing delays or decreases in customer orders with the U.S. DoD or with our prime contractor customers or potentially the suspension of work on contacts in progress or in payment delays related to the funding status of different programs. The shutdown has also slowed the processing of export licenses by agencies such as the Department of State’s Directorate of Defense Trade Controls and the Department of Commerce’s Bureau of Industry and Security. These export license delays could hinder our ability to fulfill international orders and potentially subject us to increased costs for liquidated damages or other penalties for late deliveries. Given the indefinite nature of the current shutdown and the absence of a clear resolution timeline, we anticipate continued volatility in the federal contracting environment. If the shutdown persists for an extended timeframe, it could materially and adversely affect our results of operations and financial performance.

ITEM 5.     OTHER INFORMATION

10b5-1 Plans

During the first quarter ended September 26, 2025, none of the Company’s directors or executive officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement as each term is defined in Section 408(a