[8-K] Kratos Defense & Security Solutions, Inc. Reports Material Event

Rhea-AI Filing Summary

Kratos Defense (NASDAQ:KTOS) filed an 8-K announcing an underwritten public offering of 14,935,065 common shares (including the over-allotment option) at $38.50 per share, closing on 27 Jun 2025.

Gross proceeds are roughly $575 million before underwriting discounts. Management plans to deploy the cash to scale high-priority National Security programs, pursue strategic acquisitions, reduce debt and for general corporate purposes. The shares were issued under the S-3ASR shelf registration declared effective on 21 Feb 2024.

The underwriting agreement includes customary representations, indemnities and termination provisions. Press releases covering the launch and pricing of the offering are attached as Exhibits 99.1 and 99.2.

Positive

• Approximately $575 million in gross proceeds strengthens liquidity for strategic growth initiatives and debt reduction.
• Successful full exercise of underwriters’ option indicates robust demand for KTOS shares.

Negative

• Issuance of 14,935,065 new shares is materially dilutive to existing shareholders’ ownership and future EPS.
• Capital deployment risk: proceeds lack specific return targets, exposing investors to execution uncertainty.

Insights

Capital Markets Analyst

TL;DR: $575 M equity raise funds growth; dilution tempers upside.

The completed offering injects material liquidity, lifting pro-forma cash and providing dry powder for classified program ramp-ups and bolt-on buys. Pricing at $38.50—near recent trading levels—signals solid institutional demand, mitigating discount risk. Proceeds earmarked for debt pay-down will improve net leverage and interest coverage. However, issuing ~14.9 M new shares enlarges the float and pressures EPS until cash is efficiently deployed. Near-term share overhang is possible as underwriters stabilize positions. Absent detailed guidance on accretive M&A targets, value creation remains contingent on management execution.

Risk Analyst

TL;DR: Dilution outweighs benefits if capital allocation underperforms.

The share issuance represents a meaningful percentage of existing equity, immediately diluting ownership and future earnings per share. While proceeds target mission-critical programs, execution risk is heightened in defense procurement cycles, and acquisition integration historically carries schedule and cost overruns. Failure to convert cash into margin-accretive growth would leave shareholders with a larger base and lower per-share economics. The underwriting agreement’s customary clauses offer no additional protection against these strategic risks.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 25, 2025

KRATOS DEFENSE & SECURITY SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-34460

13-3818604

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification Number)

1 Chisholm Trail, Suite 300

Round Rock, TX 78681

(Address of Principal Executive Offices) (Zip Code)

(512) 238-9840

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbols(s)			Name of each exchange on which registered
Common Stock, $0.001 par value			KTOS			The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Item 1.01    Entry into a Material Definitive Agreement.

On June 25, 2025, Kratos Defense & Security Solutions, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Robert W. Baird & Co. Incorporated, as representative of the several underwriters named therein (collectively, the “Underwriters”), relating to the sale and issuance by the Company of 12,987,013 shares of the Company's common stock to the Underwriters in a firm commitment underwritten public offering. Pursuant to the Underwriting Agreement, the Company has also granted the Underwriters a 30-day option to purchase up to an additional 1,948,052 shares of the Company’s common stock (together with the 12,987,013 shares referred to above, collectively, the “Shares”). The Underwriters exercised such option in full on June 26, 2025. Subject to the terms and conditions contained in the Underwriting Agreement, the Underwriters purchased the Shares at a public offering price of $38.50 per share, less certain underwriting discounts and commissions, in a transaction that was completed on June 27, 2025 (the “Offering”).

The Shares were offered and sold pursuant to a base prospectus dated February 21, 2024 and a prospectus supplement dated June 25, 2025, pursuant to the Company’s registration statement on Form S-3ASR (File No. 333- 277222), which was filed with the Securities and Exchange Commission (“SEC”) on February 21, 2024 and became immediately effective pursuant to Rule 462(e) of the Securities Act of 1933, as amended (the “Securities Act”).

The Company expects to use the net proceeds of the Offering to (i) fund investments and capital expenditures to scale and successfully execute on large, mission critical National Security priorities related to existing programs, recent program awards and significant high-probability pipeline opportunities; (ii) to finance important customer and program targeted acquisitions; (iii) and for general corporate purposes, including pay-down of debt and to pay fees and expenses in connection with the Offering.

The Underwriters and their affiliates have provided, and in the future may continue to provide, various financial advisory, cash management, investment banking, commercial banking and other financial services to the Company in the ordinary course of business for which they have received and will continue to receive customary compensation.

The foregoing description of the Underwriting Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and the terms of which are incorporated herein by reference. The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement are solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Underwriting Agreement, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.

A copy of the opinion of Sheppard, Mullin, Richter & Hampton LLP relating to the legality of the issuance and sale of the Company’s common stock in the Offering is attached as Exhibit 5.1 hereto.

Forward-Looking Statements

Certain statements in this Current Report on Form 8-K may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including, without limitation, the the Company’s intended use of the expected net proceeds from the Offering and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of the Company and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and the Company

undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise.

Item 8.01    Other Events.

On June 25, 2025, the Company issued a press release announcing the launch of the Offering, and on June 25, 2025, the Company issued a press release announcing the pricing of the Offering. Copies of the press releases are attached hereto as Exhibit 99.1 and 99.2, respectively, and are hereby incorporated by reference herein.

Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits.

1.1						Underwriting Agreement, dated June 25, 2025, by and between Kratos Defense & Security Solutions, Inc. and Robert W. Baird & Co. Incorporated, as representative of the several underwriters named therein.
5.1						Opinion of Sheppard, Mullin, Richter & Hampton LLP.
23.1						Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.1).
99.1						Press release, dated June 25, 2025.
99.2						Press release, dated June 25, 2025.
104						Cover Page Interactive Data File, formatting Inline Extensible Business Reporting Language (iXBRL).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Kratos Defense & Security Solutions, Inc.

By:

/s/ Deanna H. Lund

Deanna H. Lund

Executive Vice President, Chief Financial Officer

Date: June 27, 2025

FAQ

How many shares did KTOS issue in the June 2025 offering?

KTOS issued 14,935,065 common shares, including the full over-allotment option exercised by underwriters.

At what price were KTOS shares sold in the offering?

The public offering price was $38.50 per share.

How much capital did KTOS raise from the share issuance?

Gross proceeds are approximately $575 million before underwriting discounts and expenses.

What will KTOS use the net proceeds for?

Management intends to fund National Security program scale-ups, targeted acquisitions, debt reduction and other general corporate purposes.

Which underwriter led the KTOS offering?

Robert W. Baird & Co. Incorporated acted as representative of the several underwriters under the June 25 2025 underwriting agreement.

When did the equity offering close?

The transaction closed on June 27 2025, as disclosed in the 8-K filing.